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Intelligence Percent of Revenue
Summary
Rankings (Raytheon parent):
''Washington Technology'' Top 100: #5
Raytheon Intelligence and Information Services (Raytheon IIS) is the primary spying unit of defense industry giant Raytheon. In 2007, it earned revenues of $2.7 billion and employed more than 9,000 workers, 80 percent of whom held security clearances of top secret or higher. That made Raytheon IIS one of the nation’s largest intelligence contractors.
According to the Raytheon [www.raytheon.com/businesses/riis/ website], “IIS is a leading provider of intelligence and information solutions that provide the right knowledge at the right time, enabling our customers to make timely and accurate decisions to achieve mission goals of national significance. When you need trusted intelligence solutions, the clear choice is Raytheon.”
On its intelligence unit, Raytheon states: “IIS has established itself as the premier provider of command and control systems capable of transforming data into actionable intelligence. Through its ground integration initiative, IIS is helping to create a more integrated and collaborative intelligence community. Using advanced software technologies, IIS is integrating separate systems into a highly effective enterprise solution—allowing customers to rapidly adapt to their changing needs. IIS is also helping the U.S. Air Force to develop the system design for the next-generation Global Positioning System (GPS) Control Segment for satellite communications. Through this effort, IIS is providing command, control and mission support for current GPS Block II and all future satellites as well as supporting existing and new interfaces.”
Corporate Information
RAYTHEON’S NICHE. The unit provides many of the tools used by the U.S. military and defense intelligence agencies for their global intelligence, surveillance, and reconnaissance (ISR) operations. Its most important clients in the Intelligence Community are the NSA, NGA, and NRO, for which it provides signals and imaging processing, as well as information security software and tools. Raytheon’s IIS operations are closely linked to the company’s Network Centric Systems unit, which designs and operates many of the Pentagon’s high-tech weapons and targeting systems. Raytheon IIS has almost a monopoly hold on the market for command-and-control of U-2 spy planes and Unmanned Aerial Vehicles (UAVs) such as the Predator, which has seen extensive action in Iraq and Afghanistan. These systems were most recently displayed at the “Empire Challenge ‘09” intelligence exercise held annually with the UK.
FINANCES. In the fourth quarter of 2007, with the wars in Iraq and Afghanistan in full swing, Raytheon’s intelligence unit had net sales of $808 million, a 17 percent increase from the same period in 2006, when sales were $690 million. In 2007, Raytheon IIS was the company’s fastest growing unit (by comparison, sales for its Network Centric Warfare unit rose 13 percent, and missile systems rose by 8 percent). The intelligence unit’s increase, the company said was “primarily due to new programs,” including $538 million worth of new classified contracts – and one “major classified contract” worth a whopping $246 million. In 2007, intelligence systems were responsible for about 15 percent of Raytheon’s total revenue.
HUBRIS. Raytheon loves to tout its work. In July 2008, it re-posted a laudatory Slate.com story on its website about its Universal Control System, which directs military drones for the U.S. and British militaries. The article’s title: "Killing Real People Becomes a Video Game".
HISTORY. Raytheon’s record in the area of intelligence and reconnaissance goes back decades, and includes many international projects. During the 1990s, the company (with the assistance of the Clinton administration) won the prime contract to provide the Brazilian government with a $1.4 billion System for the Vigilance of the Amazon (SIVAM). Press reports described it as a “sophisticated web of sensory and communication devices” including satellites, surveillance aircraft and dozens of radar systems, that monitor the 3.1 million square miles of the Amazon. At the time of the contract, it was the largest radar system ever built.
CorpWatch Analysis
NETWORK CENTRIC WARFARE. Raytheon IIS is one of the most important contractors in the Intelligence Industrial Complex. Its role in U.S. intelligence and war-fighting is best symbolized by a massive project the U.S. Air Force launched in 2007: the Distributed Common Ground System (DCGS). Designed and built by Raytheon, DCGS is the Pentagon’s first Internet-based portal to combine tactical intelligence from military units with signals intelligence and imagery from the national collection agencies, the NSA, and NGA. When completed, it will link fighter pilots with intelligence analysts and commanders on the ground, giving them a common platform from which to read, interpret, and act on intelligence data. Similar systems are being developed for the Army and Navy by Raytheon and several of its competitors in the defense industry, including Lockheed Martin, Northrop Grumman, General Dynamics, and SAIC.
The idea behind the DCGS-like systems is to give members of the armed forces and their commanders the ability to import raw sensor feeds from military satellites, U-2 spy planes, and unmanned aerial vehicles (UAVs), and thus see and hear from a single screen the entire panoply of intelligence, including imagery, signals, streaming video, and radio communications. Eventually, the networks will be linked together by a “Global Information Grid,” which will offer U.S. forces a “seamless, secure, and interconnected information environment, meeting real-time and near real-time needs of both the warfighter and the business user,” according to the NSA, which is charged with protecting the grid from outside tampering.
Air Force officers involved in DCGS planning describe their prototype as the military’s equivalent to Travelocity, the Internet site used by consumers to make airline and hotel reservations. “For the first time, on a simple workstation, we’ll be able to guide all our ISR (intelligence, surveillance, and reconnaissance) products,” says Air Force Lieut. Col. Steven G. Zenishek, who is managing DCGS development for the Air Force. By using DCGS to create a common “battlespace awareness,” he says, warfighters will be able to find and track enemy soldiers and insurgents, “making sure we target the bad guys and not the good guys.” The ultimate object is to “compress the kill chain” – the time it takes from identifying a target to launching a strike – from hours into minutes.
GEOINT. Raytheon is one of the founders of the United States Geospatial Foundation, an organization of contractors that work for the National Geospatial-Intelligence Agency. At GEOINT 2006 in Orlando, most of the exhibitors were displaying technologies designed to combat the Iraqi counterinsurgency. Raytheon’s Intelligence and Information Systems was one of them: It was offering a visualization software, Enterprise Modeling and Simulation, that is loaded with data from airborne sensors that provide three-dimensional views of urban centers.
The program, said Raytheon, will “open up substantial new possibilities for mission planning, rehearsal of upcoming battles, and even tactical re-planning during actual combat.” A U.S. commander will use the simulation software “to roam about and see the precise relationships among the various structures, enemy forces, and his own force distribution,” allowing him to search for signs of “incipient terrorist activity” and even “look at the world from the perspective of their enemy.” The Enterprise software is part of the larger Distributed Common Ground System (described in Spies for Hire, Chapter Five), which Raytheon has designed to give Air Force commanders and fighter pilots instant access to imagery, signals intelligence, and measures and signature intelligence.
DCGS. The Distributed Common Ground System is a striking example of how national intelligence collection agencies were incorporated into military operations during the George W. Bush administration and the reign of his Secretary of Defense, Donald Rumsfeld. DCGS was developed under the direct supervision of Stephen Cambone, who served from 2002 to 2007 as the nation’s first undersecretary of defense for intelligence and was the top intelligence advisor to Rumsfeld. During the first few years of the Bush administration, the Pentagon became the dominant force in U.S. intelligence, with vast new powers in human intelligence and domestic counterterrorism. Its new powers were partly a reflection of the fact that 85 percent of the U.S. intelligence budget is allocated to Pentagon agencies.
But they also flowed from a strong desire by Rumsfeld, Cambone, and their allies in the Bush administration – most notably Vice President Dick Cheney – to place intelligence collection under the Pentagon’s command and control system, and to create within the Department of Defense a separate spy network that would provide an alternative source of intelligence to the Central Intelligence Agency, which had been the nation’s primary source of human intelligence since its founding in 1947. Raytheon is therefore a key player in the militarization of U.S. intelligence (for more on DCGS, see Raytheon’s web page on the system).
Recent Contracts/Events
In April 2008, Raytheon added an “information security practice” to its IIS business. According to Washington Technology (5/12/08), the move will “allow the company to focus more intently and bring more resources to bear on a long-standing but still-emerging challenge for its federal customers. The decision was made partly because Raytheon’s defense and intelligence customers, particularly military installations, had an unprecedented number of ever-changing cyber-attacks that are increasingly sophisticated and complex.”
In September 2009, Raytheon acquired BBN Technologies, which it says “has a long history of innovative products and solutions including the ARPANET (forerunner of the Internet).” BBN’s current offerings, the company said, “include the Boomerang acoustic-based shooter detection system currently deployed with U.S. forces, and a broad range of technology development programs, many considered mission-critical by defense and intelligence customers.”
SOURCES
Primary sourcing for this profile came from Tim Shorrock, ''Spies for Hire: The Secret World of Intelligence Outsourcing'' (Simon & Schuster/2008) and from DIA and company press releases.
