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Tech Industry

Military contractor drafts WebMethods for RFID

Beleaguered firm runs Defense Department subcontract up flag pole; investors don't salute.

Software maker WebMethods has won part of a U.S. military contract to develop new logistics technology for delivering supplies to U.S. troops overseas.

The company, which announced the deal Monday, has agreed to supply the Department of Defense with "middleware" software for the agency's radio frequency identification (RFID) project. WebMethods is a subcontractor on the pilot project under Science Applications International Corp., a privately held computer services firm in San Diego, Calif., specializing in government work.

WebMethods, based in Fairfax, Va., declined to disclose the value of the deal. The news did nothing to boost the company's stock price, which was battered by its recent warning that second-quarter revenue would not meet targets. The stock finished Monday at $4.65, 3.5 percent lower than Friday's closing price and pennies from a new 52-week low.

The Department of Defense has been using RFID technology to track combat supplies for years but rekindled the initiative last year in a push toward broader use. The goal is to more closely monitor the distribution and consumption of supplies, such as ammunition and fuel, to reduce loss and waste.

RFID technology has been around since World War II and involves the wireless monitoring of objects via radio signals. Recent advances in RFID systems' design and data standards have sparked a new wave of interest and investment in the technology. In addition to the military, such retail giants as Wal-Mart Stores and Target are incorporating RFID into their distribution centers to streamline the flow of merchandise.

WebMethods builds software programs designed to shuttle data across incompatible computer systems. The company recently released an RFID starter kit that's supposed to automatically collect data from RFID "readers" and route it to logistics and distribution systems.