Defense Contractors’ IT Businesses Under Pressure

July 30, 2012

The largest defense contractors reported last week new challenges to their information technology businesses as the government adapts to shrinking budgets.

In the Washington area, IT contracting is particularly important. Tanks, missiles and aircraft are typically built elsewhere, but IT services happen here, meaning that these declines could take a particularly large toll on the region.

Falls Church-based General Dynamics’s range of work spans private jets, military vehicles and computer programs. But the area under the most pressure is the company’s information systems and technology business, which includes IT services, cybersecurity and battlefield communications equipment.

The unit “was challenged again in the second quarter as customer award activity continued to fall short of expectations,” said Jay L. Johnson, General Dynamics’s chairman and chief executive, in a call with investors last week.



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