Chesterfield Business News

Northrop Grumman

Governor Warner Approves Nation's Most
Sweeping Public/Private Partnership In Technology
— Northrop Grumman To Invest Nearly $270 Million,
Bring 433 Jobs To Southwest And 631 To Chesterfield —

Governor Mark R. Warner today approved an interim agreement with Northrop Grumman Corporation to modernize the state's information technology infrastructure that will result in a $269.6 million capital investment in the Commonwealth. The ten-year, $2 billion contract will create a partnership that will bring 433 new high-tech jobs to Southwest Virginia and 631 jobs to Chesterfield County. Simultaneous announcements were made today by state officials and Northrop Grumman executives in Russell and Chesterfield counties.

"This is a significant step in moving our IT infrastructure into the 21st century so state government can do a better, more cost-effective job serving its citizens," said Governor Warner at today's event in the Russell County town of Lebanon. "This partnership will provide high-tech jobs with good salaries, particularly in Southwest Virginia. The costs of not updating and improving our IT systems made this path obvious, and we have worked to make this as smooth a transition as possible for our state employees. I'm proud this partnership will provide an economic boost to an economically distressed region of the Commonwealth."

Northrop Grumman's capital investment will include:

• A new $22.8 million, 130,000 square foot help desk and backup data center facility in the Russell Regional Business Technology Park at Lebanon in Russell County that will create 433 new jobs. An estimated 90 percent of this labor pool will be drawn from Wise, Russell, Tazewell, Washington, Buchanan and Dickenson counties.
• Support of technology education at the University of Virginia at Wise, including internships, student recruitment efforts, and a satellite office for the Lebanon facility.
• A new $34.6 million, 167,000 square foot operations center in Meadowville Technology Park in Chesterfield County that will house 631 Virginia Information Technologies Agency (VITA) and Northrop Grumman employees.
• A project support in Dinwiddie County housing 34 employees.
• Provisions for work for small, woman and minority-owned businesses.
• Career development opportunities for current VITA employees.

Northrop Grumman's Chairman, Chief Executive Officer and President Ronald D. Sugar said, "Northrop Grumman is proud to partner with the Commonwealth of Virginia to help modernize Virginia's information technology infrastructure. As one of Virginia's largest private employers, we look forward to welcoming the highly skilled and talented VITA workforce and contributing to economic development in Southwest Virginia."

"Virginia is at the forefront with this partnership, which we believe is the largest ever state government-private sector IT venture," said Virginia Secretary of Technology Eugene Huang. "It has the added benefit of being financially sound for the Commonwealth because it does not require additional taxpayer dollars above current funding levels."

The interim agreement signed by Governor Warner permits the state to plan the transition of IT infrastructure services to Northrop Grumman pending continuing reviews by the General Assembly for implementation. When the contract is implemented, more than 900 VITA employees will receive job offers from Northrop Grumman, and may choose to accept those offers or remain state employees.

Employees transitioning to Northrop Grumman will receive immediate four-percent salary increases and signing bonuses, and will be immediately vested in the company's benefits and retirement plans.

In 2002, Governor Warner set a vision for sweeping reform in his Strategic Plan for Technology. Bipartisan support in the General Assembly for the Public Private Educational Facilities and Infrastructure Act made these innovative solutions possible. A report summarizing that process, entitled "Building a Digital Foundation: Reporting Back to the Commonwealth of Virginia," is available on the Secretary of Technology website at www.technology.virginia.gov.

"This is a watershed event for the Commonwealth," said James F. McGuirk II, Chairman of the state's Information Technology Investment Board, which recommended the partnership to the Governor. "I want to extend sincere appreciation on behalf of the board to each and every single person - and there have been many - who provided support for this venture. It has been a tremendous undertaking. It will require diligence and perseverance to see it though."

Commonwealth Chief Information Officer Lemuel C. Stewart Jr. added, "The partnership will bring the Commonwealth's technology environment into the 21st century, improve citizen services across the Commonwealth, provide enhanced career opportunities for our employees and positively impact our economy without spending more than we do today. This model is an example of the benefits that can be realized through a state, local government and private sector partnership.

Northrop Grumman submitted an unsolicited proposal for the partnership under the state's innovative Public Private Educational Facilities and Infrastructure Act of 2002, which brings private sector innovation and investment to state government projects. The partnership is for infrastructure, including the staff, equipment and services for mainframes, servers, desktop and laptop computers, voice and data networks, operating systems, e-mail, security, help desk services, and data center facilities.

Date Posted: 11/14/2005

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