Now comes Vangent

Name changes haven't stunted BPO provider's ability to win contracts

Vangent Inc. has been providing data management
and business process outsourcing services
through more than half a century of corporate
acquisitions and name changes. Two recent contract
wins keep the company on track as a major
provider of outsourcing services to the federal
government.

Vangent was one of nine government contractors
named in March to the General Services
Administration's $2.5 billion Multichannel
Contact Center Service contract, known as USA
Contact.

Also last month, the Labor Department
awarded Vangent a 12-year contract worth
$94 million to upgrade the agency's paper-based
pension and benefits reporting collection system.

In 1998, the company, then
named National Computer Systems
Inc., won the original contract to
design, build and manage Labor's Employee
Filing Acceptance System, or Efast, to meet the
requirements of the Employee Retirement
Income Security Act (ERISA) that protects
workers' benefits and pension plans.
The two awards came one year after New
York venture capital firm Veritas Capital paid
$600 million for Pearson Government Solutions
Inc. and changed its name to Vangent.

"We're used to going after 'big-game money,'
winning large deals," said Mac Curtis, Vangent's
president and chief executive officer.

Under ERISA, companies with at least 50
employees must report annually on the status of
their retirement plans, including the number of
participants, retirees and beneficiaries. They
must also show fund balances for January and
December of each year to prove to government
auditors that the funds are being managed properly,
Curtis said.

In addition to Labor, the filings are sent to the
Internal Revenue Service, Social Security
Administration and Pension Benefit Guaranty
Corp. for verification.

The system was designed to accept and scan
only approved machine-printed and handprinted
forms using open-systems
architecture and commercial
products, such as
Microsoft Windows, Oracle
and Captiva.

"All of that is still being
done paper-based," Curtis said. He estimated
that the system is used by about 600,000 companies
for pension and employee benefit plans
worth about $6 trillion.

With a development installment of $15 million,
about 60 Vangent employees are designing
the new electronic version, Efast 2,
which will feature a secure Web portal.

"It's a 21-month development
cycle, and then we'll help run the system over the
next 10 years," Curtis said.

"Efast 2 will provide a completely electronic
portal for the receipt of about 1 million annual
reports filed by employee benefits plans," said
Alan Lebowitz, deputy assistant secretary of
program operations at Labor's Employee
Benefits Security Administration.

EBSA estimates that the new system will save
about $10 million annually, he said. The system
is designed to catch errors on forms before the
filings are processed, which is expected to
account for some of the savings.

Vangent is partnering on Efast 2 with IBM
Global Services, Buccaneer Computer Systems
and Services Inc., HeiTech Services Inc., Natek
Inc., and Riojas Enterprises Inc.

USA Contact is a 10-year governmentwide
acquisition contract to improve public services.
Like FirstContact, which it replaced, USA
Contact is part of GSA's USA Services e-government
initiative.

Government agencies, American Indian
tribes and tribal organizations, the District of
Columbia government, wholly owned government
corporations, and qualified nonprofit
agencies will be able to use the contract to
improve communication with the public, especially
during crises or disasters.

Task orders might include setting up a call
center to distribute information on taxes, Social
Security, environmental issues or illnesses.
Much of the contract involves customer relationship
management, which is a Vangent core
capability, Curtis said.

The USA Contact program will put Vangent
in a good position to support other agencies with
call-center operations, responding to people's
inquiries through a variety of communications
channels, including telephone, interactive voice
response, e-mail, fax and Web chats, he said.

Vangent is doing similar work now with the
Centers for Medicare and Medicaid Services and
the Centers for Disease Control and Prevention.
Curtis said he hopes USA Contact will provide
seven or eight large task orders a year. To win
those, the company will compete with
Convergys Corp., CSC-Datatrac, EDS Corp., ICT
Group Inc., L-3 Communications Inc., Lockheed Martin Aspen Systems, TechTeam
Government Solutions Inc. and TeleTech
Government Solutions LLC.

Vangent is in a better position than a lot of
its competitors to win USA Contact awards,
said Tervinderjit Singh, Singapore-based
research director of business process outsourcing
at Gartner's Technology and Service
Provider Research Division. The company is
experienced in providing outsourced customer
management operations, and it has
good Spanish-language capabilities because of
its work and offices in Mexico and Argentina,
he said.

"If they continue to target key government
and key commercial accounts, they are in a
good position to ride out the current economic
uncertainties," he said.

As a midsize company, Vangent also is a
tempting takeover target, Singh said.
But that is nothing new for Vangent. It was
founded as Measurement Research Center, a
private, nonprofit test-scoring company, at the
University of Iowa in 1953.

National Computer Systems acquired MRC
in 1998 and won the first Efast contract. NCS'
Government Services Division relocated to
Arlington in 1999, and Curtis became vice
president and general manager.

Pearson plc, a media conglomerate, bought
NCS in 2000. The government division, led by
Curtis, was renamed NCS Pearson. The name
was changed to Pearson Government
Solutions three years later, and the company
became Vangent in 2007.

The company had $510.1 million in sales in
2007; 79 percent came from the government.

David Hubler (dhubler@1105govinfo.com) is associate
editor at Washington Technology.

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