Defense Secretary Gates spoke today on the future direction of the Pentagon’s weapons programs and specifically how this change of direction will impact military personnel, existing weapons programs and long term planning.  He touched on a large number of specific programs such as the Joint Strike Fighter.

Large government contracting firms Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), SAIC (NYSE:SAI) and others were up on the news. It appears Wall Street has been looking for clarity around what specific plans Gates had, how dramatic the spending changes and what government contracting firms ultimately win or lose.

The proposed shift of the military is away from a large scale confrontation with a traditonally robust military such as China or Russia and geared more for a surgical and strategic approach toward dealing with future threats.

His presentation was comprehensive in its coverage of every major weapons group, personnel, intelligence, satellites, helicopters, UAV’s, lasers, vehicles, troops and very much more.

Secretary Gates outlined his plan in three general areas: 

1) A Home for the War-fighter

2) Conventional and Strategic Modernization

3) Acquisition and Contracting Reform

Secretary Gates had three “Principal Objectives”

1) Reaffirm our commitment to take care of the all-volunteer force

2) Re-balance the Defense Department’s programs toward future scenarios and hedge against today’s risk

3) Overhaul the Pentagon’s approach to procurement, acquisition, and contracting

You can read the the full text of his speech and learn more about the specific and significant components of his presentation. Secretary Gates aim will not focus on fitting his strategy under a top line budget management approach; but rather on what he called a “holistic assessment of capabilities, requirements, risks and needs for the purpose of shifting this department in a different strategic direction.” Gates went on to say “Let me be clear: I would have made virtually all of the decisions and recommendations announced today regardless of the department’s top line budget number.“

Northrop Grumman recently announced it would streamline its sector units from seven to five in order to improve the company’s program performance and enhance its cost competitiveness. The five new sectors will be aerospace systems, electronic systems, information systems, shipbuilding and technical services — and Linda Mills will be a key part of that change. Mills, who currently oversees the company’s $4.5 billion information technology unit in McLean, Va., will lead the Information Technology and Mission Systems sectors combined to form the new Information Systems sector — a $10 billion provider of advanced technologies to defense, intelligence, civil agency and commercial customers.

“Linda Mills’ proven track record, broad customer experience in the areas served by the sector and deep understanding of the systems integration and IT capabilities of the business make her ideally suited to serve as president of the Information Systems sector,” says Ronald D. Sugar, Northrop Grumman chairman and chief executive officer.

Other industry veterans agree.

“Linda Mills is an exceptional leader both within Northrop Grumman as well as in our community,” says Donna Morea, president of CGI. “Her unparalleled commitment to operational excellence, her business savvy, and her integrity help make NGIT a trusted partner to government and business alike.  We also benefit from Linda’s insight and drive here in our greater Northern Virginia community, as a contributor to the Northern Virginia Technology Council as well as other local not-for-profit organizations.”