Last year, Northrop Grumman Corp. shocked the local business community when it announced it was moving its headquarters from Century City to a Virginia suburb.
Now, in a reversal, a former subsidiary is moving more of its operations into Los Angeles County.
TASC Inc., a Chantilly, Va.-based company that provides systems engineering and analytics to the government and defense industry clients, opened a regional headquarters last week in El Segundo.
The company, which was spun off from Northrop in 2009 after nine years of ownership, had several smaller offices in Los Angeles County and consolidated into a single office, where it plans to add 30 employees to its county work force of 100. It also employs 50 in San Bernardino.
The local growth is part of a nationwide expansion that will see the company hire an additional 1,100 employees after adding 900 last year. It currently employs 5,000 employees, a large percentage of whom are scientists and engineers, in 40 locations.
The company expects to grow the $1.6 billion in revenue recorded last year because it has new freedom to pursue defense contracts since an investor group that included Kohlberg Kravis Roberts & Co. and General Atlantic LLC acquired TASC, in partnership with the company’s management, for $1.65 billion.
The 2009 spinoff was a strategic move driven by the federal crackdown on potential conflicts of interest among contractors, said Chief Executive Wood Parker.
For TASC, which counts the Department of Defense as a chief customer, that meant the company could not advise the department on a weapons system that Northrop could build.
“We’re delighted to be separated from Northrop,” he said. “As an independent, nonconflicted company, we can pursue business opportunities in Los Angeles.”
For example, TASC landed a $200 million contract last year and a $9 million contract this year with the Space and Missile Systems Center in Los Angeles, a division of the U.S. Air Force. The company is providing systems engineering and integration support for the Space Based Infrared System program, an early warning system that Northrop is helping build to protect the country against missiles.
“We do all the systems engineering and cost-estimating work, analyzing the trade-offs between the costs, scheduling and risks,” Parker said.
Had TASC still been a subsidiary of Northrop, it would not have been allowed by the government to pursue the contracts. “We were not permitted to even bid on those types of programs,” he said.
Phil Finnegan of Teal Group Corp., a Fairfax, Va.-based defense consultancy, said there is no doubt that the spinoff will allow TASC to pursue more government contracts.
“A company like TASC might recommend going in a certain technical direction that they know Northrop is strong in,” said Finnegan. “As the government tightened this law, it cut the ability of contractors to pursue both elements of business.”
Although the government is looking at deep spending cuts in many areas including defense, Parker said he is confident TASC’s services will still be needed. Among the recent projects the company worked on was a Aegis-class Navy destroyer that launched in June. The Mission Engineering Business Unit worked with shipbuilders to ensure the ship met government specifications and the crew was familiar with its systems.
