Defense giant Northrop Grumman Corp. will provide an economic boon to Colorado Springs and Aurora.
Northrop Grumman, headquartered in Los Angeles, won a $1 billion Pentagon contract for defense research this week, with much of the money earmarked for Colorado Springs.
The company has not specified how many jobs the contract might generate, said Northrop Grumman spokeswoman Marynoele Benson.
“If all options are exercised and we realize the full potential” of the contract over ten years, it could be worth $2.5 billion, Benson said.
Economist David Bamberger, based in Colorado Springs, said 2,000 jobs could be created over the life of the contract, based on the $2.5 billion figure.
“Colorado Springs already has a significant presence of defense-contractor activity,” he said. “There are 10,000 to 12,000 people working in that industry. This will add a significant amount to a significant part of the economy.”
The so-called Joint National Integration Center (JNIC) Research and Development Contract is based at Schriever Air Force Base, east of Colorado Springs. It currently employs 350 Northrop workers and 600 contractors.
Work on the first phase of the contract, valued at $30 million and ramping up, will start in February.
“The JNIC is the U.S. Department of Defense’s premier missile defense war-gaming center, providing a one-of-a-kind environment for military commanders to develop and confirm operational concepts,” according to Northrop Grumman.
“It is one of the largest contracts ever awarded to the company’s Mission Systems division worldwide and probably the largest government contract ever awarded for work to be done in the Springs,” the Colorado Springs Gazette reported Wednesday.
Separately, Northrop Grumman plans to build a 75,000- square-foot building on its campus in Aurora and add 350 jobs in a $28 million payroll boost.
The jobs, which pay an average of $80,000 a year, are also in the company’s Mission Systems division, which is based in Reston, Va. It develops highly sophisticated hardware and software for government customers in support of homeland security, national defense and intelligence.
“These are extremely high- paying jobs with an excellent benefit package,” said Wendy Mitchell, president of the Aurora Economic Development Council. “Bringing these new jobs into the state is a win for everybody.”
The Aurora deal, announced Wednesday at an economic-development luncheon that drew 1,200 attendees, includes an incentive package worth up to $1.4 million:
A sales- and use-tax waiver of up to $534,000 from the city of Aurora.
A property-tax waiver of $22,000 from Arapahoe County.
An Economic Development Commission grant from the state matching city and county incentives up to $556,000.
A Colorado First job-training grant worth up to $280,000.
“All incentives represent firm offers from jurisdictions pending final approval of agreements between them and the company,” Mitchell said.
Construction of the building in Aurora is expected to start next summer and take about six months. Northrop Grumman is reviewing proposals it has received from contractors, said Dan McClain, the company’s corporate director of media relations.
The company currently employs about 1,000 people in three building on its Aurora campus.
Over the years, Colorado has taken for granted its position as a destination for aerospace and defense companies and started losing expansion opportunities to Southern states, such as Florida, Texas and Alabama, said Tom Clark, executive vice president of the Metro Denver Economic Development Corp.
In recent years, however, the state’s leaders have started to pay more attention to the industry, forming the Colorado Space Coalition.
