Logicon Inc.

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Logicon Inc.

3701 Skypark Drive
Torrance, California 90505-4794
(310) 373-0200
Fax: (310) 373-0844

Division of Northrop Grumman Corporation
Employees: 4,896
Sales: $476.1 million (fiscal 1996)
Stock Exchanges: New York
SICs: 7371 Computer Programming Services; 8711 Engineering Services

Logicon Inc. is one of the leaders in the information technology and defense electronics business. Not quite as large as giant competitors Lockheed Martin and Northrop Grumman Corporation, Logicon, with an annual growth rate of about 10 percent, nevertheless managed to carve a niche out for itself in the field, with customers including the U.S. Department of Defense (DoD), the U.S. Federal Aviation Administration, the U.S. Department of Justice, the U.S. Department of Agriculture, the U.S. Postal Service, the U.S. Internal Revenue Service, the U.S. Army, Navy, and Air Force, and the U.S. Defense Nuclear Agency. Incorporated in California on April 10, 1961, and reincorporated in Delaware on July 28, 1978, as a successor to the first company, it eventually merged in 1997 with industry giant Northrop Grumman.

In the late 1960s, Logicon began performing tests and analysis on software and systems for the Minuteman missile, a task continued on into the 1990s, when their Weapons Systems unit also began doing the same thing for the Peacekeeper Intercontinental Ballistic Missiles.

The company was contracted in the mid-1970s by the U.S. Defense Special Weapons Agency (DSWA) for scientific and engineering technical assistance. Over the next 25 years, Logicon would participate in a number of projects vital to national security. One such project developed in the 1990s, especially after the Gulf War, was forLogicons Science & Technology (S&T) division to develop counterforce options for national leaders to use when dealing with nuclear, chemical, or biological weapons. Another project had the S&T unit working on DSWAs Data Archival and Retrieval Enhancement (DARE) system and Project Gray-beard which, together, would preserve and archive precious data on nuclear testing acquired since the mid-1940s.

In the late 1970s, after purchasing International Computation (Cambridge, Massachusetts) for $549,000 in 1974, Logicon began developing sophisticated diagnostic systems to test interoperability of tactical data links for the military, including the Multiple Unit Link Test and Operator Training System (used to test and certify data link systems and train operators) and the LMS-11 and LMS-16 (used to troubleshoot actual operation of Link-11 and Link-16 systems respectively). By the late 1990s, the Command, Control, Communications & Intelligence (C3I) division had developed a digital communications system for the AEGIS Computer Center which enabled the center to network and test its systems over large geographical distances using standard dial-up telephone lines.

Beginning in 1980 and for over a decade, Logicon went through a spate of expansionism, acquiring Operating Systems Inc. (Woodland Hills, California) in a stock exchange; R&D Associates (Marina del Rey, California) in similar fashion in 1983; Chase, Rosen & Wallace Inc. the same way in 1985. Eagle Technology was purchased for $9.3 million in 1989 and became Logicon Eagle Technology. In 1990, Fourth Generation Technology Inc. (La Jolla, California) was bought for $2.7 million. Logicon Ultrasystems Inc. was created in 1991 when the company acquired part of the Ultrasystems Defense unit of Hadson Corporation and, the same year, Logicon established a wholly owned subsidiary called Logicon Canada Ltd. The only break in the expansion of Logicon came in 1982 when the company sold its newspaper text-processing system business and, in 1992, decided to focus on relocating three operating unit headquarters and consolidating administrative support functions in order to tighten up its growing operations.

From 1983, Logicons S&T unit was a key in a number of remote sensing and spectral imagery projects for the DoD, which led to a wide range of commercial applications such as geological surveying, agricultural analysis, and disaster assessment. Logicon would eventually create the Spectral Imagery Training Center, complete with its own publication, the Multi-spectral Imagery Reference Guild, for training people in these commercial applications.

In the late 1980s, Logicon began providing technical support to human performance research at the U.S. Air Forces Armstrong Laboratory at Wright-Patterson Air Force Base in Ohio where engineering and human factors evaluations of crew stations, cockpits, pilot workloads, situation awareness, helmet-mounted displays, and night-vision goggles were performed. Logicon was also the systems integrator in the development of the Synthesized Immersion Research Environment (SIRE) Laboratory, a state-of-the-art virtual reality facility used for developing and evaluating crew-station technologies for future pilots and where experiments are conducted on brain-actuated control (similar to the movie Firefox, where Clint Eastwoods character merely had to think in Russian for the MiG to operate), bioacoustics (adding stereophonic, three-dimensional sound and surround-sound clues to aid pilots in target acquisition), tactile displays, and data gloves.

Logicon became an important player in the U.S. Navys Battle Group Passive Horizon Extension System (BGPHES) in late 1994. BGPHES is a first-of-a-kind tactical surveillance and reconnaissance system that has the demonstrated capability to link U-2 aircraft to a Battle Group Commander embarked on a carrier. In 1995, the company was awarded a five-year contract to continue development support on this system.

In 1995, the defense electronics industry began to rapidly consolidate. The bigger companies in this industry had been going at it since 1992, with such giants as Martin Marietta and Lockheed and Raytheon and Litton Industries buying companies left and right. Logicon seemed to start the ball rolling among the smaller companies when, re-adopting what CS First Boston analysts would call its activist acquisition strategy, Logicon began expanding quickly again. On February 16,1995, Logicon purchased Syscon Corporation (a wholly owned subsidiary of Harnischfeger Industries, Inc. engaged principally in the business of providing systems development, systems integration, and systems services to the U.S. government and commercial enterprises) for $45.3 million. October 1 of the same year saw Logicon acquire the Space and Engineering Group of Applied Technology Associates Inc.

When the government shutdown occurred, analysts wondered if the company would suffer since most of Logicons business (like that of other information technology businesses such as BDM International, CACI International Inc., BTG Inc., Nichols Research Corporation, and Tracor Corporation) derives from contracts for government defense projects. But the shutdown did not affect the company adversely at all. The companys pursuit of new business in the Information Technology field resulted in Logicon being awarded a five-year, $200 million contract from the Internal Revenue Service for software and systems engineering services in support of the IRSs Tax Systems Modernization effort and a two-year, $20 million subcontract for information systems support to the Health Care Financing Administration. The company also continued its key support role at the U.S. Air Forces Phillips Laboratory under a four-year, $22 million contract award for support of laser research and development for high-energy laser applications and advanced imaging technology, giving the company the opportunity to model all aspects of the high-energy laser beam and design and conduct experiments using the artificial laser beacon, which allows for greatly improved imaging of objects in space. At the time, Logicon was the principal contractor for the U.S. Armys Battle Command Training Program (BCTP), which uses the Corps Battle Simulation (CBS) system, a computer-driven training and simulation system Logicon helped develop. In 1995, the Army decided to replace CBS with the next generation of computer-driven Command and Control training simulation environments, called Warfighters Simulation (WARSIM) 2000, which Logicon also would develop.

In March 1996, Logicon acquired Geodynamics Corporationa company specializing in remote sensing, geographic information systems, modeling and simulation, software development, and systems engineering and integration for the Department of Defense and other government agenciesfor $31.7 million. This purchase extended Logicons reach even further for, although Geodynamics headquarters were located in Tor-ranee, California, Geodynamics also had offices in Colorado Springs and Denver, Colorado; Fairfax, Virginia; Sunnyvale, California, and Gaithersburg, Maryland.

The same year saw Logicon developing the Force Level Execution (FLEX) systemspecialized software which presents a time-oriented screen display of the status of all sorties flown in a specific theaterto help U.S. Air Force manage air operations. The C3I units Southwest Border States Anti-Drug Information System achieved full operational capability in 1996 after two years of engineering and development. The system provides an improved collection and sharing of criminal information among federal, regional, state, county, and city law enforcement agencies along the four southwestern states which border with Mexico (California, Arizona, New Mexico, and Texas), allowing rapid identification of law enforcement officials with similar investigative interests and rapid and secure exchange of sensitive intelligence and information between them.

Company Perspectives:

Logicon is a leader in providing advanced technology systems and services, hardware and software, to support national security, civil and industrial needs in the following areas: Command, Control, Communications & Intelligence; Weapons Systems; Information Systems; Science & Technology and Training & Simulation.

In early 1997, the company was awarded a contract for Joint Interoperability and Engineering Organization (JIEO) Systems Engineering (JSE) by the Defense Information Systems Agency. On May 4, 1997, Northrop Grumman Corporation signed a definitive agreement to acquire Logicon in a merger with a $750 million stock swap. Northrop, whose corporate offices are located in Los Angeles, California, is a leading designer, systems integrator, and manufacturer of military surveillance and combat aircraft, defense electronics and systems, airspace management systems, information systems, marine systems, precision weapons, space systems, and commercial and military aerostructures, with sales of $8.1 billion in 1996. Northrop was to merge its information technology division with Logicon to create a Logicon Information Technology Division which, together, had an income of approximately $1 billion. Northrop chairman, president and CEO Kent Kresa said in a May 5, 1997 press release, the merger will give them the technology, skills and business base to play a leading role in the continued development of highly integrated systems essential to meet the future warfighting requirements of our military services. At the time of this writing, sources at Logicon reported that Lockheed Martin, another industry giant, would be purchasing Northrop, continuing the consolidation of the marketplace in this industry.

Further Reading

Cole, Jeff, and Steve Lipin, Northrop Agrees to Acquire Logicon in Stock Deal Valued at $750 Million, Wall Street Journal, May 6, 1997, p. A4(W)/B10(E).

Gilpin, Kenneth H., Northrop to Purchase Logicon in a $750 Million Stock Swap, New York Times, May 6, 1997, p. D7.

Siegel, Morton L., et al, Aerospace/Defense Industry, Value Line Investment Survey, April 4, 1997, p. 551.

Daryl F. Mallett