At AUSA, companies focused on improving old equipment, rather than selling new

October 27, 2013

The buzzword at this year’s Association of the U.S. Army conference was uncertainty — uncertainty about whether sequestration will continue, about when a new budget will be approved and about what programs will move forward.

But companies are finding ways to cope, taking more incremental approaches to growing their businesses.

At QinetiQ North America ’s booth at the Walter E. Washington Convention Center, the McLean-based company was showing off new kinds of armor and sensors that can be bolted on — or even applied with extra-strength magnets — to Army vehicles to make them more resistant to attacks.

Mark S. Hewitt, the contractor’s chief strategy officer, said the company is trying to come up with a variety of different upgrades — recognizing that the military’s ability to buy new equipment is limited.

“There’s no money,” he said. “They’re not going to be making an awful lot of new vehicles for a while.”

On another part of the exhibition floor, Rapiscan Systems , which has an office in Crystal City, was featuring its new software, meant to help customers better integrate their existing security technologies from baggage scanners to metal detectors.

The software tries to leverage other companies’ equipment, said Melissa Odegaard, a Rapiscan spokeswoman.

Despite their efforts to come up with affordable options, contractors said they remain concerned about spending cuts and the lack of information about how those cuts will be executed.

Schott Defense, which has a business development office in Crystal City, makes transparent armor, including the windows of an armored vehicle rushed to Afghanistan in recent years.

“Where do you invest? What do you decide are your priorities?” said Jim Stein, the company’s vice president of government affairs. “The crystal ball’s never been cloudier.”

Saab consolidates defense operations

Swedish defense company Saab has established Saab Defense and Security USA , which will consolidate its U.S.-based defense companies .

The 250-employee business combines Saab Training USA, Saab Barracuda, Saab Support and Services and the defense parts of Saab Sensis, and will be based in Sterling. It also has a small District office.

Lars Borgwing, the former chief executive of Saab Training USA, has been named president and chief executive of the new group.

The Swedish company has been growing its U.S. presence, including buying Sensis, an East Syracuse-based company, in 2011. Saab Defense and Security will operate under a special security agreement with the Pentagon.

Borgwing said last week he will seek to grow the company, even as U.S. defense spending declines.

Hitachi federal unit separates from parent

When Mike Tanner came to Hitachi Data Systems about six years ago, the company had about a dozen employees on its federal team. Within months, he suggested to the company’s leadership that it separate the federal organization, creating the type of firewall many foreign-owned companies use to win classified work with the U.S. government.

“Prove yourself,” Tanner said he was told in response. Over the past five years, Tanner has built up the Reston-based federal group, which now has more than 70 employees. He convinced Hitachi Data Systems’s management, and earlier this year led the company through the separation.

The step has created more bureaucracy — under the rules, executives such as Tanner must log their interactions with the company’s foreign-owned management — but also made contracting officers more comfortable with Hitachi, he said.

Still, he said the federal unit in recent months has not seen some of the awards it expected because of delays. “It is certainly challenging right now,” Tanner said.

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