L-3 loses $ 4.6 billion deal to DynCorp

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L-3 Communications, second largest language service provider according to Common Sense Advisory's Top 20 LSP Ranking recently lost a US$ 4.6billion contract to competing DynCorp International.

According to Bloomberg.com L-3, the largest supplier of U.S. Army translators, lost the contract to provide translators in Iraq to a group led by DynCorp.

L-3's shares fell 6% on Monday after the company was forced to to readjusting targets for the lost translation contract.

The defense communications specialist says the U.S. Army did not renew a deal to supply the military with translators and linguists in Iraq, Afghanistan and Guantanamo Bay, Cuba. The current contract with the U.S. Army will expire eaqrly next year. L-3 acquired the translator business when it purchased Titan two years ago.

The contract now was awarded to Global Linguist Solutions LLC, a joint venture of DynCorp and McNeil Technologies. Both companies are controlled by Veritas Capital, the second-largest private equity firm targeting U.S. defense contracts.

Bloomsberg reports that the new team will employ 6,000 locally hired translators and as many as 1,000 U.S. citizens with security clearances who are native speakers of languages spoken in Iraq. The company asecured the deal for a five year period.

L-3 also lost other Army-translator deals, Bloomsberg reports. Contracts for translation services in Afghanistan and Guantanamo Bay, Cuba, had been set aside for small businesses, thus blocking L-3's competition. A US$ 703 million contract for services in Afghanistan was awarded to Thomas Computer Solutions LLC; and a $ 66 million award for work in Guantanamo Bay to Calnet.

Sources: Bloomsberg , TheStreet.com