Another big defense contractor, Northrop Grumman, is moving its headquarters to the Washington, D.C., area, where rivals Lockheed Martin and General Dynamics have shown the advantage of close proximity to the Pentagon, the White House and Capitol Hill. Northrop Grumman HQ to D.C. area

Another big defense contractor, Northrop Grumman, is moving its headquarters to the Washington area, where rivals Lockheed Martin and General Dynamics have shown the advantage of close proximity to the Pentagon, the White House and Capitol Hill.

Northrop Grumman’s announcement that it will relocate from Los Angeles by 2011 comes in the middle of a hard-fought competition with Boeing, another rival, over an Air Force contract for aerial refueling tankers worth $35 billion. The Air Force is expected to issue final bid specifications for the planes sometime this month.


Positioning Northrop close to where decisions about defense are made is critical for the company’s success, according to Loren Thompson, the chief operating officer of the Lexington Institute.

“It’s time for Northrop to put its culture of being an outsider behind it. It still behaves like a company that is alien to Washington a lot of the time,” Thompson said, noting that Lockheed and General Dynamics have both been more successful. “There’s a lesson there.”

As the defense industry has shrunk, all of the contractors began to look more and more alike, and it was only a matter of time, Thompson said, before management sought a geographical edge. “How well are you going to know the Obama team from several thousand miles away?” Thompson said.

Thompson noted that another big contractor, SAIC, recently moved its corporate offices from San Diego to Virginia — a change he said he recommended to Northrop executives years ago.

Northrop has exerted its influence by aggressive lobbying, outspending its larger rivals Lockheed Martin and Boeing by more than $25 million between 1998 and 2008, according to the Center for Responsive Politics.

The move involves only about 300 of the company’s 120,000 employees, according to the company’s statement but bolsters Northrop’s already-large presence in the region. It is one of the top employers in Virginia — putting to work more than 16,000 people, with massive operations in Newport News. Northrop’s Electronic Systems is based in Baltimore, and the company employs more than 10,000 in Maryland.

“As a global security company with a large customer base in the Washington, D.C., region, this move will enable us to better serve our nation and customers,” said Wes Bush, the company’s chief executive officer and president.

Correction:

An earlier version of this story used the wrong figures from the Center for Responsive Politics. Northrop Grumman continues to outspend Boeing and Lockheed Martin on lobbying.