Harris Corp keen to expand federal health-IT sales

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Wed Nov 18, 2009 4:06pm EST

* Aggressive growth plans cited

* Veterans Affairs business gained with acquisition

ATLANTA Nov 18 (Reuters) - Defense contractor Harris Corp (HRS.N), which has been buoyed by rising orders for its tactical radios for combat troops, is also looking to expand sales to the U.S. government in healthcare information technology, an executive said on Wednesday.

"We've got very aggressive plans for growth, and Harris has given evidence of its commitment to this space," said Jim Traficant, vice president of the Harris Healthcare Solutions business unit.

Earlier this week, Harris said it acquired Patriot Technologies LLC, a private company that supplies healthcare imaging, software and information technology to the Department of Veterans Affairs.

Terms of the purchase weren't disclosed, but Traficant said the acquisition was made to help Harris gain business in the $3.4 billion U.S. government healthcare IT market.

"The VA will spend over a billion dollars outsourcing health information solutions," Traficant told Reuters. "So we now have deep relationships and contracts and expertise familiar with the VA environment."

The healthcare solutions unit is part of Harris Corp's government communications systems segment, which had sales of $2.7 billion in the fiscal year ended July 3 and accounted for 54 percent of the company's total revenue.

In an August filing with the U.S. Securities and Exchange Commission, the communications equipment maker said several contracts in healthcare solutions helped boost its government communications annual revenue, including a multimillion-dollar, 10-year contract with Health First, a Florida healthcare provider.

The company worked with the government to upgrade a software system called CONNECT that allows federal agencies to access and share electronic health records to speed up medical and benefit decisions. The Social Security Administration, for example, is now using that software, Traficant said.

Last month, Harris boosted its full-year forecast on increased U.S. Army orders for its tactical radios, which distribute voice and data in an encrypted form.

Harris shares, which have risen 24 percent this year, closed 35 cents lower at $44.55 on the New York Stock Exchange on Wednesday. (Reporting by Karen Jacobs; Editing by Gary Hill)

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