Posted on: Monday, June 14, 2004
Linguistics firm wants piece of $2.5 billion deal
By Edmond Lococo
Bloomberg News Service
Bowne & Co. Inc., the world's largest provider of language services, said it is in talks to support defense companies competing for the U.S. Army's worldwide translation contract as the war in Iraq increases demand.
Bowne "has been courted by all the" contractors competing for the award, which could be worth as much as $2.5 billion over five years, said Peter Coddington, Bowne's director of federal business. The Army will announce the winner tomorrow.
The current contract, now valued at $657 million, has been held by Titan Corp. since 1999. The work was originally valued at $10 million. Conflicts in Afghanistan and Iraq and the war on terror have increased the U.S. military's need for skilled interpreters of languages such as Arabic, Hebrew, Pashto and Urdu.
"If somebody says they are going to bomb the U.S., they don't say it in English," Coddington, 42, said in a telephone interview. "The market has exploded since 9/11. The Department of Defense and intelligence community have a huge need."
Titan has said it will compete to keep the award. The San Diego-based company has been troubled by a billing dispute with the Army related to translation work in Iraq, and by an Army report that linked at least one Titan employee to abuse of Iraqi prisoners at Abu Ghraib prison near Baghdad.
Los Angeles-based Northrop Grumman Corp. and New York-based L-3 Communications Holdings Inc. have said they will challenge Titan for the work. Coddington said Bowne's talks were with CACI International Inc. and other companies he declined to identify.
15,000 linguists
Founded in 1775, Bowne specializes in publishing prospectuses and other financial documents for publicly listed companies. The New York-based company, which has a market value of more than $500 million and about 15,000 linguists and interpreters worldwide, is seeking to broaden the scope of its translation work beyond its traditional base of business clients.
Bowne's sales rose to $1.06 billion last year from $1 billion in 2002. Its only current government language contract is one it has held for 18 years, supplying the Justice Department with interpreters for 250 languages at immigration hearings in 156 courts across the United States, Coddington said.
The company didn't lead a team competing for the U.S. Army Intelligence and Security Command language award because it has been reluctant to put its employees in war zones, Coddington said. Even without putting workers at risk, Bowne could still offer the winning contractor support in areas such as language testing, management and payroll systems, Coddington said.
New recruits Titan is supplying 4,200 linguists to the Army under the current contract, Army spokeswoman Deborah Parker said. The new supplier is expected to recruit as many as 6,000 linguists, Coddington said. That would mean screening 30,000 to 40,000 applicants in both English and the target language, he said.
For Titan, the timing of the competition could hardly be worse. In a report sent to Congress last month by Army Maj. Gen. Antonio Taguba, at least one Titan employee was linked to abuse at Abu Ghraib. In March, the United States suspended 10 percent of Titan's pay for the translation work after an audit found inadequate documentation of its bills.
Titan Chief Executive Gene Ray downplayed the significance of the contract in remarks to reporters on June 7. He was speaking after Titan shareholders OK'd the sale of the company to Lockheed Martin Corp. Completion of the transaction depends on the resolution of a Justice Department criminal probe into whether Titan consultants bribed foreign officials.
"It is a big revenue source, but it is not a big income source," Ray told reporters after the vote. "It is not a high-margin contract."
'Pulled to a new need'
Titan had sales of $1.8 billion last year on net income of $29.1 million. The company has denied its employees were involved in any improper behavior in Iraq and the Taguba report didn't directly criticize the company.
Northrop spokesman Frank Moore and L-3 spokesman Evan Goetz both declined to provide details on the members of their teams in the competition. CACI spokeswoman Jody Brown declined to comment "on any aspects of bids that it may or may not be pursuing."
Bowne will enter the government market for language services "carefully" and will need to learn things like dealing with the issue of government security clearances, Coddington said.
"We're being pulled to a new need in the Department of Defense," he said. "We're being pulled in willingly."
