New rules force Lockheed to shed PA&E

WSJ story.

Sad for me to see because I played a small role as outside cheerleader on the purchase (I ended up giving speeches to a couple of the early Lockheed-Pacific Architects & Engineers corporate gatherings.

But CEO Bob Stevens announces he will be putting PA&E up for sale because new federal rules from last year (Weapon System Acquisition Reform Act of 2009) places stricter limits on mil-industrial companies who provide both managerial support and then seek to build on systems that are ultimately slotted in under the same--i.e., it's a conflict of interest to both manage programs on behalf of the government and then seek to bid on subordinate contracts.

PA&E was acquired in 2006 as part of Lockheed's move into soft-power/second-half/SysAdmin activities.  PA&E continues to do well; it's just that the new rules force divestiture.

To me, this is part of the yin-yang struggle within DoD:  it knows it's stuck with a lot of SysAdmin workload for the foreseeable future, but it fears the military-industrial complex getting too used to horning in on these activities--contract-wise--because the Pentagon wants these functions to migrate elsewhere ultimately, and the more the mil-indusrial complex settles in, the harder that becomes.

So it's just hard to have it both ways, as both the Pentagon and Lockheed find out.