The U.S. Department of Justice announced Wednesday that Arlington County’s Raytheon, a subsidiary of aerospace and defense contractor RTX, has agreed to pay more than $950 million to resolve multiple allegations that include fraud and bribing a Qatari official.
Under Wednesday’s settlement, Raytheon must pay the following penalties:
For two counts of major fraud in allegedly overcharging the U.S. Department of Defense by $111 million, Raytheon will pay a criminal monetary penalty of $146.78 million and $111.2 million in victim compensation.
Under a civil False Claims Act settlement related to the DOD allegations, Raytheon was penalized $428 million, but the $111.2 million in victim compensation will be credited toward that amount.
In the bribery case, filed in the Eastern District of New York, Raytheon will pay a criminal penalty of $230.4 million and pay forfeiture of $36.69 million. In addition, to resolve the Securities and Exchange Commission’s parallel investigation, Raytheon will pay $49.1 million in disgorgement and a civil penalty of $75 million, $22.5 million of which will go toward the criminal penalty.
For allegedly failing to disclose to the U.S. Department of State and the Directorate of Defense Trade Controls the bribes reportedly paid to a Qatari official, Raytheon will pay a financial penalty of $21.9 million.
Raytheon entered into a three-year deferred prosecution agreement Wednesday in the fraud case, which was filed in federal court in Massachusetts, and stems from charges that Raytheon employees allegedly provided false information to the U.S. Department of Defense that inflated costs for purchasing missile systems and operating and maintaining a radar system from 2012 through 2013, and 2017 through 2018. In addition to the financial penalties, Raytheon will have an independent compliance monitor for the next three years.
The bribery charges stem from a reported scheme among Raytheon employees between 2012 and 2016 to bribe a high-level official with the Qatar Emiri Air Force, a branch of the Middle Eastern country’s armed forces, to assist the contractor in obtaining and retaining their business. According to the DOJ, Raytheon made payments to the official by creating “sham subcontracts” for air defense studies, with funds going to the official.
In addition to the financial penalties, Raytheon and RTX have agreed to an independent compliance monitor for the next three years, as well as improvements and enhancements to the company’s compliance programs.
“The department is committed to holding accountable those contractors that knowingly misrepresent their cost and pricing data or otherwise violate their legal obligations when negotiating or performing contracts with the United States,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement.
In 2020, Raytheon merged with United Technologies to form Raytheon Technologies. In 2022, the company relocated its global headquarters from Massachusetts to Arlington. The company rebranded as RTX in 2023.
“These legacy legal matters relate to conduct that occurred at Raytheon Company largely prior to 2020,” noted RTX spokesperson Chris Johnson in a written statement. “RTX is taking responsibility for the misconduct that occurred,” he added in the statement. “We have worked diligently during the investigations to remediate that misconduct and continue to do so.”
RTX noted it had set aside more than $1.2 billion to resolve pending legal matters in a July SEC filing.
Three Virginia CEOs made Fortune’s 2024 list of the world’s 100 Most Powerful Women in business, which the media company released Wednesday.
Kathy J. Warden, chair, president and CEO of Falls Church-based Fortune 500 defense contractor Northrop Grumman ranked highest among the trio of Virginia leaders, taking the No. 25 spot — a drop from 2023 when she ranked as No. 20.
In January, Warden became chair of the Greater Washington Partnership. She also serves on Merck’s board and is board chair of global nonprofit Catalyst.
Northrop Grumman reported $39.3 billion in sales in 2023, an increase of 7% from the previous year. The company employs more than 100,000 workers, including 6,800 in Virginia.
Phebe N. Novakovic, chairman and CEO of Reston-based Fortune 500 defense contractor General Dynamics, immediately followed Warden on the list, ranking No. 26. Novakovic also trailed Warden by one spot on the list last year, when she was ranked No. 21.
A graduate of Smith College and the Wharton School at the University of Pennsylvania, Novakovic has led the world’s sixth largest aerospace and defense company since 2013. General Dynamics employs more than 100,000 people and recorded $42.3 billion in revenue for fiscal 2023, a 7.3% increase from 2022.
Before joining General Dynamics in 2001, Novakovic worked for the CIA, the federal Office of Management and Budget, and under two deputy defense secretaries.
Toni Townes-Whitley, who took the reins at Reston federal contractor Science Applications International Co. (SAIC) a year ago, made the Fortune list for the first time this year, debuting at No. 95. One of only two Black female Fortune 500 CEOs, Townes-Whitley previously served as president of Microsoft’s U.S.-regulated industries, president of CGI Federal and held management roles at Unisys. SAIC has 24,000 employees and reported revenue of $7.7 billion in FY 2023.
Internationally, General Motors CEO Mary Barra topped this year’s list, followed by CVS Health CEO Karen Lynch. Accenture Chair and CEO Julie Sweet, who has worked in the past from the international professional services company’s Arlington County office, was ranked No. 4, after Citigroup CEO Jane Fraser.
Compiled by Fortune’s editors, the list is based on the female leaders’ company size and health, career path, influence beyond their organization and how they wield power. The ranking, global in scope for the second year in a row, has 12 leaders from East Asia, eight apiece from France and the U.K., three each from Australia and Singapore, and two apiece from Spain, Brazil, and Germany.
“Since its inception, the Most Powerful Women in business list has served as a powerful reminder of the tremendous impact women leaders continue to have in shaping business today,” Alyson Shontell, Fortune’s editor-in-chief and chief content officer, stated in a release. “They are not just adapting to change; they are driving meaningful transformation.”
This article has been corrected since publication.
Huntington Ingalls Industries’ McLean-based Mission Technologies division won a $458 million federal defense contract to modernize information technology architecture.
Under the five-year task order, which HII announced Tuesday it had won, the division will use model-based systems engineering to develop, assess and implement technical solutions to improve cybersecurity, add capabilities and enable cloud migration on U.S. Defense Department communication and information technology networks.
“We are honored by the customer’s trust in HII and our approach,” Andy Green, HII executive vice president and Mission Technologies president, said in a statement. “As we advance their IT transformation goals, we are committed to delivering cutting-edge expertise and solutions that will have a direct, positive impact on our frontline warfighters.”
The U.S. Air Force’s 774th Enterprise Sourcing Squadron awarded the contract through the Defense Department’s Information Analysis Center Multiple Award Contract vehicle to develop the Defense Technical Information Center repository and support research and development.
Newport News-based Huntington Ingalls Industries is the nation’s largest military shipbuilder and the largest industrial employer in Virginia. The Fortune 500 company employs more than 44,000 workers. The Mission Technologies division has more than 7,000 employees and more than 100 facilities globally.
In late 2020, the Air Force made headlines when it announced that an artificial intelligence co-pilot, named ARTUµ, helped command and control a U.S. military spy plane for the first time in history.
If the name, pronounced R-2, sounds familiar, it is. Think R2-D2, or “Artoo,” Luke Skywalker’s lovable droid and X-Wing copilot from the “Star Wars” franchise. Except this was not a galaxy far away, but Beale Air Force Base in California.
ARTUµ controlled sensors and tactical navigation of a U-2 Dragon Lady on a reconnaissance training mission out of Beale on Dec. 15, 2020. It was charged with searching for enemy missile launchers while the plane’s human pilot, known only by the call sign “Vudu,” searched for enemy aircraft during a simulated missile strike.
The tech, developed by McLean-based Fortune 500 contractor Booz Allen Hamilton and Air Force researchers, modified an open-source gaming algorithm and ran more than 1 million training simulations in a lab — a “digital Dagobah,” Will Roper, who then served as the service’s assistant secretary for acquisition technology and logistics, wrote in an editorial for Popular Mechanics. ARTUµ was mission-ready in just over a month.
“Failing to realize AI’s full potential will mean ceding decision advantage to our adversaries,” Roper said at the time.
Fast-forward four years and AI’s technological advancements have continued, transforming lives and — controversially — livelihoods as it becomes more entrenched in the workplace. At the same time, the military has continued to cite how critical AI will remain in helping the U.S. outpace its adversaries. Even as the Pentagon faces ongoing tensions in the Middle East amid the conflict between Israel and Hamas, and in Europe with Russia’s ongoing war on Ukraine, military leaders are refocusing for the potential of a wide-ranging battle with China in the Pacific that would most likely unfold across sea, air, land, space and cyberspace.
Virginia’s defense contractors are at the cusp of that work, with a hand in some of the largest and most transformative AI projects on behalf of the military. Those range from warfighting tools like unmanned vehicles to generative AI software to perform mundane business support tasks like military personnel record searches. That’s work that could be game changing for the military at a time when budgets and manpower are tight and harnessing data could be key to maintaining the upper hand against an adversary.
“I think that the eye is on the prize … when it comes to [the Department of Defense] right now, from the perspective of this is something we have to do from a national security point of view based on threats that we see from other nation states,” says Jason Payne, chief technology officer for Arlington County-based Microsoft Federal, which currently has a contract worth as much as $21.9 billion to produce more than 100,000 AI-enhanced goggles for the Army. “We know that near-peer competitors are investing heavily in this technology.”
Crunching data
The Pentagon is also investing heavily in AI technology. Its fiscal 2025 budget request, which totals $850 billion and was released in March, includes $1.8 billion for AI spending as well as an additional $1.4 billion for the department’s Combined Joint All-Domain Command and Control project, an ambitious departmentwide effort to connect “sensors to shooters to targets” globally.
But those dollar figures, the Pentagon admits, don’t likely tell the full story. With AI involved in so many programs, the Pentagon’s comptroller has acknowledged it’s difficult to provide a detailed breakdown of its AI investments. Even pinning down the exact number of AI defense projects is challenging. A 2022 Government Accountability Office report found that the DOD had at least 685 ongoing AI projects spanning the military service — a figure based on procurement and research and development dollars.
While those numbers may not offer a ton of clarity on the scope to which the Pentagon is looking toward AI, they do underscore the importance of it for the military, and Virginia contractors are benefiting from that desire.
Booz Allen Hamilton bills itself as the largest supplier of AI services to the federal government, with more than 300 active projects involving AI, according to Holly Levanto, a vice president overseeing the delivery of AI and digital solutions for Booz Allen’s U.S. defense clients.
“We try to focus on mission meets innovation,” Levanto says.
That work has included some of the Pentagon’s largest AI projects to date, including an $800 million, five-year task order awarded in 2020 to integrate and develop AI for the warfighter in the Alliant 2 Joint Warfighter Task Order, as well as a $885 million, five-year task order awarded in 2018 to help the DOD sift through its enormous amount of reconnaissance data — a project called Enterprise Machine Learning Analytics and Persistent Services, or eMAPS — through the deployment of AI and neural and deep neural networks. Booz Allen won a $1.5 billion recompete for the project in 2022.
Focusing on those mission areas has meant incorporating AI in ways to parse data faster. As an example, the Navy gathers vast amounts of data from its ships, Levanto says. Booz Allen has turned raw naval message traffic into tabular data that can be more easily and quickly analyzed to pinpoint trends.
“We can send AI models to the edge at the point of data collection,” says Levanto, a former naval surface warfare officer. “And so, we have some real-world scenarios where we’ve done that in points on the battlefield.”
Booz Allen also launched a venture capital fund in 2022 to sharpen its tech capabilities. It has now invested in 10 companies, eight of which are AI-focused, Levanto says. That included an investment in Wisconsin-based RAIC Labs, which developed a model- generating platform using unstructured data. In 2023, RAIC made headlines when its tech was used to track a Chinese intelligence balloon that traveled over the U.S. before being shot down by a military jet off the coast of South Carolina.
“Our ultimate goal is to get the Department of Defense to be able to utilize these leading commercial technologies … and so we need to help bridge that,” Levanto says.
Falls Church-based General Dynamics Information Technology, a subsidiary of Reston-based Fortune Global 500 aerospace and defense contractor General Dynamics, is also no stranger to big defense contracts involving AI, or those that involve wrangling large sets of data.
In March, GDIT received a $922 million contract to modernize enterprise IT infrastructure for U.S. Central Command, which directs and enables U.S. and allied military operations across the Middle East and a portion of Africa.
Data is the biggest barrier to AI, says GDIT’s Brandon Bean, the AI and machine learning leader for the company’s defense division. That includes data quality and integrity as well as accessing old, siloed IT architectures. Where it used to be that applications were built to create data as a byproduct, the paradigm has shifted. Now, data “is what the application is built to support,” Bean says. “The data comes first.”
At a September conference hosted by GDIT at Amazon’s HQ2 headquarters, John Hale, chief of cloud services for the Defense Information Systems Agency, discussed how DOD is working with contractors to update antiquated computer code with AI.
“We’re using AI capabilities to … modernize legacy code that all the people who ever wrote it are long gone,” Hale said. “And you know, it’s not perfect, but it gets us like 85 to 90% of the way there, and then we’re able to manually fill in that last 10 to 15% to bring these applications into the 21st century.”
For CENTCOM, GDIT is tasked with creating data analytical services to support decision-making across nearly 20 networks and building data centricity and literacy across the command. By leveraging AI, including incorporating data tagging, what has previously required a more tedious process of manual data sampling of mountains of records can be extrapolated much faster, giving commanders the potential to better evaluate what worked during missions, or develop trainings based on lessons learned. It could also help service members to prove justifications for injuries that may not have been recorded in their medical records, Bean says.
AI in the cockpit
While AI is helping the Defense Department wrangle large amounts of data for higher level decision-making, the Pentagon is also incorporating AI in weapons systems and for operational use by warfighters. And that tech is getting increasingly advanced.
In May, Air Force Secretary Frank Kendall, who has advocated for the military’s use of AI, rode in an F-16 Fighting Falcon that was controlled by AI in a dogfight exercise against another F-16 flown by a human. Relying on sensors, California-based Shield AI developed the program used by the Air Force during the flight. In March, Arlington County-based Boeing announced a collaboration with Shield AI to develop autonomous and AI technologies for defense programs. Boeing declined to comment for this story.
With AI in the cockpit, the technology shows no signs of slowing down, including in a variety of unmanned vehicles, which will be a key component in future battles, with several drone initiatives underway by the Pentagon and military branches.
At Newport News-based Huntington Ingalls Industries, Virginia’s largest industrial employer and the nation’s only builder of nuclear-powered aircraft carriers, computer vision and recognition technologies have improved to the point where autonomous undersea vehicles like the company’s REMUS platform can be used to hunt for targets, gather intelligence and respond to findings without having to report back to the surface, says Andrew Howard, senior director of unmanned surface vehicles and autonomy programs within HII’s Mission Technologies division.
“Based on … customer comfort with things, different use cases, they could either update its survey pattern based on that information, or they could use that as the cue to pass information back to a surface operator to … take action based on that,” Howard says. “So, it’s really kind of made the information a bit more actionable than it used to be.”
The Navy in December 2023 announced that it had successfully launched and recovered a REMUS “Yellow Moray” drone via torpedo tubes on the USS Delaware, a Virginia-class attack submarine commissioned in 2022 and built by HII in partnership with General Dynamics’ Connecticut-based Electric Boat subsidiary. The Navy has said it could field the program for its submarine fleet later this year.
Meanwhile, the Marine Corps has been testing similar surface-level technology for its Long-Range Unmanned Surface Vessel (LRUSV) program using technology developed by HII that uses cameras and machine learning to identify and classify targets for maritime domain awareness, Howard adds. The drone’s tech passes intelligence to an operations center for action. Based on that feedback, the drone can then update its mission and shadow an intended target if called upon to act.
Gathering intelligence with less risk to warfighters can help save lives. Making that information more readily available can make work easier, too.
Reston-based Fortune 1000 contractor CACI International offers the DarkBlue Intelligence Suite, a tool that incorporates various AI techniques, including computer vision and image processing, to help analysts in dark web investigations and tracking. The company received a $239 million six-year task order in August to provide intelligence analysis and operations, including the DarkBlue suite, to the Army’s Europe and Africa command.
AI is also helping the Marines step into the metaverse. In October 2023, Fairfax’s CGI Federal, the U.S.-based arm of the Canadian professional services and consultancy, announced that it successfully completed a $34 million pilot to digitally twin the Florida-based Marine Corps Platform Integration Center’s assets into a virtual world by tagging its inventory and helping the service track its assets in real time. Being able to keep up with equipment like tanks as they travel the world could be of huge importance in a distributed battle across the Pacific, where troops could set up on airfields constructed on austere island chains. It could also help the service track maintenance needs and predict trends across vehicle fleets, says CGI Vice President Stephanie Ackman, who leads the company’s technology practice for defense, space and intelligence clients.
“When the rubber meets the road … [does a taxpayer] care about where the stuff is?” Ackman asks. “Yes, but they care more so about the safety of the individuals that are down range.”
CACI International has entered into a $1.275 billion definitive agreement to acquire Azure Summit Technology, the Reston-based Fortune 1000 government contractor announced Monday.
Based in Fairfax and founded in 2007, Azure Summit develops high-performance radio frequency (RF) hardware and software for the U.S. Department of Defense.
Pending regulatory approval, the all-cash deal is expected to close in the second quarter of FY 2025.
The purchase expands CACI’s offerings in intelligence, surveillance and reconnaissance, electronic warfare and signals intelligence, CACI President and CEO John Mengucci explained in a statement.
“For our shareholders, the acquisition of Azure Summit is compelling both strategically and financially,” Mengucci stated. “It not only enhances our offerings in areas of enduring national security priorities but also brings with it an installed base of fielded, mature technology. And, from a financial standpoint, it will be immediately accretive across multiple financial metrics.”
Founded in 1962, CACI has 24,000 employees and reported $7.7 billion in fiscal 2024 revenue.
Optimum Technologies, a Sterling space flight hardware designer and manufacturer, plans to expand its Loudoun County satellite manufacturing plant, a project expected to create 40 jobs, Gov. Glenn Youngkin announced Monday.
Known as OpTech, the company will invest $999,000 in the expansion, according to the governor’s office. OpTech was founded in Virginia in 2015 and specializes in aerospace products related to satellite, ground and missions systems engineering and includes the U.S. Department of Defense among its customers. The company also holds civil and commercial contracts.
“OpTech continues to expand due to high growth in the space sector,” Timothy Rumford, OpTech’s executive vice president, said in a statement. “We have seen great demand for our hardware and services and have outgrown our original [satellite manufacturing facility] that was opened in 2022. Our new facility will give us approximately five times the capacity and help continue our growth plans and, in turn, help support our nation’s needs for rapid and low-cost access to space.”
OpTech was founded by CEO Jeffrey Gick and Chief Operating Officer John Hildebrand, who both were employed at Orbital Sciences Corp., while Gick worked previously at Hughes Space & Communications, and Hildebrand was at Lockheed Martin and United Space Alliance earlier in his career.
“Optimum Technologies’ decision to expand its manufacturing facility in Loudoun County demonstrates the trust manufacturers have in Virginia,” Youngkin said. “The company is a key component of the Northern Virginia aerospace industry, and we are gratified to see this investment.”
According to the governor’s office, the Virginia Economic Development Partnership worked with Loudoun County to secure the project, and the Virginia Jobs Investment Program will support recruitment and training of the new employees at no cost to OpTech.
Herndon-based technology and management contractor Serco Inc., a subsidiary of United Kingdom-based Serco PLC, has won a contract worth an estimated $323 million for construction work at the U.S. Space Force’s Pituffik Space Base in Greenland.
Under the four-year U.S. Army Corps of Engineers contract, which Serco announced last week, the company will manage facility repairs and upgrades to the backup electrical plant at the base.
Formerly known as Thule Air Base, Pituffik Space Base is locked by ice nine months out of the year, although the airfield is operated year-round. Serco will have a tight schedule to build a temporary backup power plant while a team of experts renovates the current backup plant.
The Pituffik base supports missile warning, missile defense and space surveillance missions. The Defense Department’s northernmost base, it exists because of mutual defense agreements between the U.S. and the Kingdom of Denmark.
“This contract award builds on Serco’s strong capabilities in systems design and installation, as well as our exemplary past performance on defense construction projects,” Tom Watson, Serco’s CEO in North America, said in a statement. “Serco is proud to have the opportunity to support this mission-critical large-scale system upgrade project for the U.S. Army Corps of Engineers and U.S. Space Force.”
Serco has subcontracted with Aarsleff, a Danish construction engineering company. The new alternate power plant will provide greater and more stable electrical capacity to the base, according to a news release.
Serco has more than 50,000 employees in 35 countries, about 9,000 of whom are employed in the Americas.
V2X has received an up to $747 million U.S. Navy contract to maintain F-5 supersonic fighter jets used in military training exercises, the McLean-based Fortune 1000 aerospace and defense contractor announced Monday.
Under the single-award, indefinite-delivery, indefinite-quantity contract, V2X will be responsible for providing critical support and operational readiness of the F-5 aircraft, which the Navy and Marine Corps use to train pilots by simulating air-to-air combat and adversary combat tactics. Falls Church-based Fortune 500 defense contractor Northrop Grumman manufactured the aircraft.
“We are honored to have been selected for this critical endeavor, further solidifying our dedication to providing industry-leading support for our nation’s defense,” V2X President and CEO Jeremy C. Wensinger said in a statement. “We look forward to leveraging our expertise and capabilities to ensure the operational excellence of the F-5 aircraft and, by extension, the readiness of the U.S. Navy and Marine Corps.”
Work is expected to continue through November 2028 on the base contract, although there are three one-year options that could extend the contract through November 2031.
V2X formed in 2022 from the $2.1 billion merger of Colorado-based government contractor Vectrus and Mississippi-based The Vertex Co. The company reported $3.96 billion in 2023 revenue and has about 16,000 employees.
Headquartered in Reston, Fortune 500 contractor Leidos announced last week it has won three government contracts — a $191 million Army contract, an up to $86 million National Geospatial-Intelligence Agency contract and an up to $326.5 million National Institutes of Health contract.
Under the $191 million contract, Leidos will provide integrated lifecycle software and management solutions for the U.S. Army Communications-Electronics Command, Software Engineering Center, C3T Directorate, Fires Division.
Leidos has previously performed mission software development work for the Army customer. The contractor will provide cyber-hardened software and systems engineering, technical services, and software integration, supporting more than seven mission software systems, including the Advanced Field Artillery Tactical Data System.
“For the U.S. Army to deliver precise, longer-range fires to counter continuous innovation from near-peer threats, they need software systems capable of incremental modernization,” Roy Stevens, Leidos’ national security sector president, said in a statement.
The contract has a five-year performance period and a six-month option.
For the National Geospatial-Intelligence Agency, Leidos will provide software development, systems engineering, integration and operations and sustainment services. Named Chinook, the single award, indefinite delivery, indefinite quantity contract has a ceiling value of $86.4 million, if all task orders are exercised over a five-year performance period.
Leidos will provide lifecycle management support for analytics systems including the Commercial-Joint Mapping Toolkit and the Tearline open-source intelligence system.
“Geospatial intelligence analysts use a spectrum of tools and need them to perform to support their missions,” Stevens said in a statement. “Building on our longstanding relationship with NGA, we are committed to sustaining and evolving these analysis systems for ongoing decision advantage.”
Leidos announced a contract award from the NIH on Aug. 15. The eRA Agile Software Development Support contract has a potential $326.5 million value over five years, if all options are exercised.
Under the NIH contract, Leidos will provide software development and design services to support eRA — NIH’s grants management system, which several other federal agencies also use — and other NIH Office of Extramural Research systems. The eRA system is an end-to-end electronic system that applicants and grantees use to apply for and manage grants, and that assists reviewers in the application review process. The system handles more than $40 billion annually in grants at more than 62,000 institutions worldwide.
“As the largest grants management system in the world, eRA requires continuous modernization and maintenance to sustain the work of tens of thousands of researchers and institutions worldwide,” Liz Porter, Leidos’ health and civil sector president, said in a statement. “Since 2008, Leidos has worked with NIH to enhance its modernization efforts, establishing it as a center of excellence in grants management and agile development across the federal government.”
The three contracts come after an $823 million task order from the U.S. Defense Information Systems Agency, which Leidos announced at the end of July.
Leidos provides technology, engineering and science services to defense, intelligence, civil and health market customers. It has about 48,000 employees and reported approximately $15.4 billion in 2023 revenue.
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