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Microsoft, Lockheed eye federal deals

The software maker and the aerospace company team up to tackle technology services projects in the lucrative federal sector.

Microsoft on Thursday said it is teaming up with aerospace giant Lockheed Martin to tackle technology services projects in the lucrative federal sector.

Under the agreement, the two longtime partners intend to work together to pursue new business opportunities with government agencies, helping them upgrade and install new technology and computer systems using Microsoft products. Financial terms of the deal were not disclosed.

Lockheed's services unit will initially focus on providing support to implement certain Microsoft software, including Windows DNA, which is used in building distributed Web applications. Lockheed will also help ensure that the technology complies with federal security standards to safeguard U.S. government communications and data.

In mid-day trading, shares of Microsoft inched 22 cents higher to $69.92. Lockheed fell 95 cents to $38.05.

In recent months, large professional services companies, including Computer Sciences, Electronic Data Systems and IBM Global Services, have nabbed a string of government technology contracts. EDS, for one, is working on a huge government services contract it won last October to help develop and upgrade an intranet for the U.S. Navy and Marine Corps.

Microsoft and Lockheed are already working on several federal deals of their own, including one with the U.S. Air Force that entails a technology upgrade of a large space command and control complex in North America. The two are also part of a team of companies that are vying for a contract with the Navy that calls for developing new products and services to link mail processing and other computer systems.

Microsoft and Lockheed plan to jointly train and certify Lockheed's technical consultants on Microsoft software. Lockheed's four core divisions--aeronautics, space, systems integration and technology services--will have access to the Redmond, Wash., software giant's products under the terms of the agreement.

Lockheed, based in Bethesda, Md., said that nearly $18 billion of its sales last year were a result of U.S. government deals.