Raytheon Markets Maritime Defense System

Raytheon software system tracks ships, combs databases for ship history

Dec. 28--PORTSMOUTH, R.I. -- The cargo ship bears the name Osama. It's been registered in Syria. And it's steaming toward Los Angeles.

That's the mock scenario playing out on a bank of giant plasma screens lined up for a demo here at Raytheon Co.'s Naval Integration Center on Narragansett Bay. The vessel has been tagged as suspicious based on data culled from shipping records. Raytheon engineers are using software to track its course. And they're combing databases tracing its history, ownership, and sister ships heading for US waters.

"We're pulling the needles out of the haystack to find people who might represent a threat to the United States," said John C. Rienzo, chief engineer for Project Athena, the maritime defense system Raytheon has begun marketing to Pentagon and port officials.

Athena is part of a larger push by Raytheon, the nation's fifth-largest military contractor, into homeland security. With the growth in spending expected to slow in the second half of this decade at the Department of Defense, its top customer, executives of the Waltham company have set their sights on capturing more business from the Department of Homeland Security and other agencies that fund new programs protecting air and sea ports, borders, railroads, and highways.

But the company's homeland security revenue is still tiny compared to its defense revenue. And Raytheon is playing catch-up to other contractors who have moved faster to retool existing programs to address homeland security requirements. "It's a potentially profitable area for them, and one that won't be shrinking," said Paul Nisbet, analyst for JSA Research in Newport, R.I. "But they need to land a big contract, because the defense budget should be flattening."

Project Athena, which seeks to foil both terrorists and drug traffickers, was deployed for a 45-day field demonstration at the Port of Buffalo this fall. Raytheon is now using feedback from the US Northern Command on the Buffalo trial to refine the system's "anomaly detection and response" capabilities as it prepares for deployments at two other US ports this winter and spring. Thus far, Raytheon has won $8.5 million in contracts from the Pentagon's Counter-Narcoterrorism Technology Program Office for Athena, but it's positioning itself to compete for much larger orders when the opportunity arises.

At the same time, Raytheon is readying a bid next month for a contract estimated to be worth up to $50 million to supply technology for the Homeland Security agency's Advanced Spectroscopic Program that seeks to scan cargo trucks for radioactive materials. The company's homeland security programs, bringing in $67.9 million last year, still represent only a small fraction of the more than $20 billion Raytheon rings up in annual revenue. But expanding the homeland security business has been identified as a priority for the company.

"We see this as a potential game changer," said Dan Smith, president of Raytheon's Integrated Defense Systems unit in Tewksbury, which oversees Project Athena and the truck-scanning program. Smith said the Athena system could be valuable in helping to secure American harbors, like Boston, that are visited by liquified natural gas tankers.

In building a homeland security franchise, Raytheon will be vying with some familiar rivals. Lockheed Martin Corp., the largest US military contractor, jumped to a headstart by modifying its Deepwater program, a joint venture with Northrop Grumman Corp. formed in the 1990s to help modernize Coast Guard ships and aircraft. After the Sept. 11, 2001, terror attacks, Lockheed and Northrop refocused part of their efforts on new homeland security missions like coastal protection.

Tapping the homeland security market has been complicated for all contractors by squabbling among government agencies over funding responsibilities, making it hard to plan their programs.

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