Pemstar wins U.S. Army Land Warrior contract

General Dynamics, Falls Church, Va., was recently awarded a $59.9 million contract to enhance the Land Warrior system — a wearable device that combines high-tech firearms with computer, communications, and navigational gear. Pemstar, Rochester, Minn., is one of a handful of companies that was tapped by General Dynamics to participate in the project. Financial terms of the contract were not disclosed.

The deal comes at a time when communications-dependent EMS companies are eager to diversify their client base with avionics and military programs. Aerospace/military outsourcing represented a $43 billion opportunity in 2001, of which EMS providers captured less than $4 billion in revenue.The market is estimated to grow to $57 billion in 2005, of which EMS companies are expected to grab more than $6 billion, said Jerry Labowitz, an analyst at Merrill Lynch & Co. Inc., in a report.

"EMS providers with strong design and manufacturing capabilities for complex products are best positioned to pursue opportunities in the military market," Labowitz said.

Last week, Sypris Electronics, a Tampa, Fla., EMS subsidiary of Sypris Solutions Inc., Louisville, Ky., won a $6.2 million contract from the U.S. government to design prototypes for the Secure Data Transfer Device 2000 System — a next-generation crytography platform.

"The new contract builds on our long-standing relationship with the government and demonstrates the success of our engineering design capabilities," said James G. Cocke, Sypris Electronics' president and chief executive, in a statement.

Similarly, Pemstar has been pushing into the military field for the past two years. In 2001, the EMS provider acquired Pacific Consultants Inc., a Mountain View, Calif., product engineering company that was already working on the Land Warrior program. As a Pemstar subsidiary, Pemstar Pacific Consultants is continuing its involvement with a consortium that includes General Dynamics to develop components and hardware for the system.

"We believe that one of the reasons the Army selected the General Dynamics team for the Land Warrior program was because Pemstar Pacific Consultants is able to develop rapid prototypes in advanced electronic systems under tight deadlines," said Bret Herscher, Pemstar Pacific Consultants' founder and president, in a statement.

In addition to Pemstar, the Land Warrior team includes Computer Science, Falls Church; Kaiser Electro-Optics, Carlsbad, Calif.; Omega Training Group, Columbus, Ga., and Thales Communications, Clarksburg, Md.