Giant IRS Contract for CSC
In what’s being touted as the largest civilian technology contract ever awarded by the federal government, Computer Sciences Corp. has been tapped to overhaul computer systems at the Internal Revenue Service.
The contract will be worth between $5 billion and $7.5 billion over its 10- to 15-year life, according to Paul Cosgrave, chief information officer for the IRS. El Segundo-based CSC beat out bids from Lockheed Martin Corp. and Andersen Consulting.
CSC is charged with upgrading the IRS’s computer system to allow it to offer such services as Internet-based tax returns and personalized customer service. In addition, it will aid the IRS in its efforts to track down non-filers and perpetrators of tax fraud, who are estimated to cost the federal government $195 billion a year.
Northrop Job Cuts
The other shoe dropped last week following Boeing Co.’s announcement that it would slash jet production, with Northrop Grumman Corp. saying it will be forced to cut an additional 1,100 jobs as a result.
Northrop, which makes fuselages for Boeing 747s at its plant in Hawthorne, had already planned to cut 2,600 jobs in 1999. Following Boeing’s announcement that it will sharply curtail 747 production, Northrop decided on the additional layoffs.
Northrop officials say they will lose $150 million because of Boeing’s cuts. About 60 percent of Northrop’s workforce at its Hawthorne plant will be cut next year; additional cuts will be felt at Northrop plants in Dallas, Georgia and Florida.
Hughes Accused of Divulging Secrets
When officials with Hughes Space and Communications helped Chinese engineers figure out how to build better rockets in 1995, they gave China crucial insights into technology that could boost the country’s ability to launch nuclear warheads, according to a secret Pentagon report.
El Segundo-based Hughes helped investigate the failure of a Chinese rocket that was intended to launch a Hughes satellite three years ago. American satellite companies like Hughes favor Chinese rockets because they are cheaper than U.S.-built models, but they have problems with reliability; Hughes engineers helped Chinese engineers solve some of those problems.
Hughes officials insist that the company’s actions at the time were approved by the Commerce Department. But the Pentagon says Hughes did not have proper authorization to divulge information that could be used to improve China’s military capabilities.
Charter Reform Compromise
The two commissions studying charter reform were near an agreement late last week that would put to rest their most divisive issue, bringing the two groups closer to creating a unified charter proposal.
The leaders of the two panels agreed on a compromise over the power of the city’s mayor to fire department heads. The elected panel favors giving the mayor that power, while the commission appointed by the City Council would leave the power in the hands of the council.
Under the compromise proposal, the mayor would be empowered to fire department heads but the general managers would then have the right to appeal their dismissals to the City Council, which could overrule the mayor by a two-thirds vote.
Meanwhile, the elected panel has agreed to add a “living wage” provision to its charter proposal, a controversial move that could prompt an anti-reform campaign from business. The language mirrors the city’s living wage law, which guarantees at least $7.39 an hour with benefits or $8.64 an hour without benefits to city contractors.
Frederick’s Building on Block
The vintage Frederick’s of Hollywood building on Hollywood Boulevard is up for sale, another signal of the rising property values in the area that are tempting owners to sell out.
Frederick’s is asking $4.5 million for the 1930s-era, Art Deco building, which is listed on the National Register of Historic Places. The lingerie retailer plans to keep its flagship store and lingerie museum on the ground floor, though it would rent the space from the building’s new owner.
Company offices would move out of the upper floors of the 28,000-square-foot building.
Hollywood Dome Saved
Facing a fierce protest from preservationists and the threat of a lawsuit, Pacific Theatres has abandoned plans to gut its unique Cinerama Dome movie theater in Hollywood as part of a $60 million development project.
Pacific had planned to replace the curved screen, created in 1963 to accommodate a then-revolutionary Cinerama movie process that never took off. The company also planned to install stadium seating and turn the lobby into a restaurant. Instead, Pacific officials have agreed to simply reconfigure seating along the existing slope and revamp the sound and projection systems.
Preservationists and film buffs strongly objected to the plans, leading City Councilwoman Jackie Goldberg and the Community Redevelopment Agency to pressure Pacific into changing its design. The plans for the retail complex adjacent to the theater have also been altered, with building heights reduced from four stories to three.
Seagram Officially Buys PolyGram
Seagram Co. has finalized its acquisition of PolyGram, creating the world’s largest music company.
The new entity, called Universal Music Group, accounts for about a 25 percent share of all records sold at domestic retail stores. Universal is expected to launch a massive restructuring of the PolyGram operations that will likely involve major job cuts.
Seagram plans to cut a reported 20 percent of PolyGram’s workforce, and artist rosters will also be slashed.
Unocal Opts Out of Pipeline
Unocal Corp. has pulled out of a multinational consortium that planned to build a controversial pipeline in Afghanistan.
Unocal officials blamed low oil prices, rather than the objections to the project from feminist and human-rights activists, for the decision. Unocal was the lead member of a group planning to build a 1,005-mile pipeline from Turkmenistan to Pakistan, and its departure means the effort will likely collapse.
Opponents had been trying to defeat the project because of the human-rights record of Afghanistan’s ruling Taliban militia. The other partners in the consortium include Delta Oil Co. of Saudi Arabia and the Turkmenistan government.
Compiled by Dan Turner
