ARINC thrives in its niche

Though it's been a backbone of the aviation communications realm for the better part of a century, ARINC's public profile has always lagged behind heavyweights such as Northrop Grumman and Lockheed Martin.

But the Annapolis avionics company has won the right to bid on a federal contract worth a potential $15 billion to help stifle international drug trafficking, solidifying its clout in the aviation world. It also recently landed a $22 million contract with Space and Naval Warfare Systems Center.

"It's a linchpin company," said Hans Weber, president of Tecop International, a San Diego-based technology management consultant serving aviation-focused clients. "It definitely is, with a global reach in some areas. The experts know about them. You couldn't take ARINC out of the fabric (of aviation)."

Founded in 1929 as Aeronautical Radio Inc., the company was responsible for standardizing ground-based aeronautical radio stations just as the airline industry was getting off the ground. However, it has also been a low-profile, but extremely significant, player in the defense market.

Two-thirds of the company's business now comes from government contracts, particularly in the realms of defense and homeland security.

The bid invitation is "really a testimony to the level of experience and knowledge we have as a company," said Linda Hartwig, a company spokesman.

She estimated that if ARINC wins a portion of the $15 billion narcoterrorism contract, 80 percent of the work will be performed outside the country under the supervision of its Oklahoma office.

ARINC, which has 3,300 employees - 1,400 locally - has 100 offices worldwide and annual revenue exceeding $900 million.

ARINC Engineering Services LLC recently beat out 30 other companies for a $22 million contract with the Space and Naval Warfare Systems Center in Charleston, S.C., to provide engineering support for aviation command and control systems.

Under the contract the center can order any amount of service in any given time period. ARINC also will provide software support, training, technical design, installation, maintenance and logistics, among other duties for the specialized systems.

The contract contains four options and two term provisions, which if exercised, would bring the cumulative value of the contract to an estimated nearly $170 million. Work is expected to be completed by September 2008. If all options and award term years are exercised, work could continue until September 2014.

ARINC's public profile is on the upswing after the Washington-based Carlyle Group, whose former advisers include former president George H.W. Bush, announced in July that it would buy the avionics firm. Terms of the deal weren't disclosed.

Carlyle has a portfolio of more than 500 corporate and real estate investments and offices from Beijing to Dubai. The firm currently has $58.5 billion under management and investments in more than 130 countries. It also has some powerful political connections. Mr. Bush, former U.S. secretary of state James Baker and former British prime minister John Major have also worked for Carlyle or Carlyle-associated companies over the years.


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