Northrop Grumman Corporation (NOC) has embarked upon a $2.8 billion deal to provide information technology (IT) solutions to the Social Security Administration (SSA). Northrop will perform a variety of technology services under the seven-year Information Technology Support Services (ITSS) contract. Work on the contract will be conducted in Baltimore.
 
Northrop will provide improved service delivery to SSA stakeholders through IT and business process improvements under this contract. Northrop Grumman will provide support services related to application and business planning, analysis and requirements; data administration, programmatic repository and enterprise architecture; and software engineering management.
 
Northrop will manage the integration, reengineering and enhancement of legacy systems for the federal agency. Under the contract, the company is expected to receive task order awards in three of nine technical areas worth a maximum of $2.8 billion for all awards. The company will also compete for work in new technical areas to be defined by the SSA.
 
Northrop is well-known for its expertise as a leading integrator of advanced technology applications and customized hardware and software solutions. The company’s expertise and contribution are expected to modernize and keep secure the technical environment of the Social Security Administration. Northrop’s partnership with the SSA will transform the way the agency serves the broad range of changing needs of the American public.
 
Los Angeles-based Northrop Grumman Corporation is one of the world’s leading shipbuilders and the second largest defense contractor in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense (DoD), including electronic systems, information technology, submarines and surface ships, aircraft, space technology, and systems integration services.
 
Northrop’s future outlook remains largely secure based on expectations of solid revenue growth across the board, a broad diversification of programs, strong order bookings and an order backlog of more than $66 billion at first half-end 2010.
 
However, apprehensions regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, lower backlog, cost over-runs and substantial exposure to missile defense- related programs keep us on sidelines. We retain our Neutral recommendation for the stock. The company currently has a Zacks #3 Rank (Hold). 
 
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