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FORTUNE.COM // JUNE.1.19
Leidos, being built in Gulfport, Miss. Next,
the company will compete for a part in the
2020 medium and large unmanned vessel
programs. It’s likely to partner with other
contractors more expert in the world of
shipbuilding, such as General Dynamics
and Huntington Ingalls. That would be
similar to Leidos’s work building imaging
and sensor instruments for planes and guid-
ance systems for cruise missiles, which are
built by others.
Boeing and Lockheed Martin, for their
part, have concentrated on underwater
unmanned craft, avoiding the complica-
tions of navigating amid other vessels on the
surface. And Rolls-Royce Holdings showed
off renderings of an autonomous naval ves-
sel somewhat like the Sea Hunter in 2017
but never produced a craft. It has since sold
its commercial boating business to Nor-
way’s Kongsberg Gruppen ASA. Kongsberg
has so far focused on developing civilian
unmanned craft. It has a refit ferry that
navigated its way on a journey of a few miles
around Finland’s Turku Archipelago and is
also working with shipbuilder Vard Hold-
ings to build a huge autonomous container
ship that should be ready to sail next year.
Autonomous vessels will save a ton
of money for the Navy. According to a
study produced for the Defense Advanced
Research Projects Agency, or DARPA,
which initially oversaw the autonomous
vessel program, Sea Hunter can operate for
utes 18% of revenue, targets Medicare
fraud and provides disability exams,
but the crown jewel of the business is
the management of the Frederick Na-
tional Laboratory for Cancer Research in
Maryland, which sports a $540 million
annual budget.
The gleaming national lab sits on a
serene hillside at the foot of the Catoctin
Mountains, 45 miles north of Washington,
D.C. Split off from nearby Fort Detrick,
home of the nation’s bioweapons research,
by President Nixon in 1972, the lab’s charge
is to focus on cancer, AIDS, and other areas
that have proved too tough or too uncer-
tain to be profitable for the private sector.
Leidos won a $5 billion contract in 2008 to
run the lab and added a $1.5 billion exten-
sion in 2015.
$20,000 per day, compared with $700,000 to run a fully manned
destroyer performing similar missions. And with no sailors at
risk, an autonomous fleet could serve as “pawns” for tracking
subs, clearing mines, and acting as communications relays while
manned vessels remain the “king” and “queen” pieces for large-
scale battles in the Navy’s ocean-borne chess match against China
and Russia.
For the unmanned Navy project, Leidos engineers ran simula-
tions of more typical single- and twin-hull designs, as well as some
submersible possibilities. But to their surprise, they found that a
main hull with two outriggers was more stable, faster, and cheaper
to maintain. “I think because we weren’t a shipbuilder, we really
came at it with a very fresh look,” says Krone.A
LL THREE LEIDOS DIVISIONS are in healthy shape. Defense
revenue grew a robust 7% in the first quarter of this
year; the civilian unit, which makes up a third of
revenue, was up 2%; and health care was the strongest
segment, posting a 9% revenue gain. This unit, which contrib-