Carrick steers toward $1B goal

A smooth transition keeps Perot Systems' growth on target

Perot Systems Government Services Fairfax, Va. | Top 100 Rank: 41 | Revenue: $650 million

LEADERSHIP:

Eugene "Lee" Carrick, president
David Joslin, senior vice president of the national
security division

Richard Pineda, senior vice president of consulting
and professional services

Tor Opsahl, senior vice president of civilian
agencies

Donnie Blanks, executive vice president of sales

Susan Nolan, chief information officer

Noel Samuel, senior vice president of finance

LINES OF BUSINESS:

Information Technology Infrastructure Solutions

Systems Development and Integration Solutions

Consulting Services

Business Process Solutions

MAJOR CUSTOMERS:

Homeland Security Department

Coast Guard

Immigration and Customs Enforcement

Customs and Border Protection

Science and Technology Directorate

Transportation Security Administration

National intelligence community

Defense Department

Air Force

Army

Navy

Marine Corps

Civilian agencies

Commerce Department

Education Department

Energy Department

Federal Aviation Administration

General Services Administration

Health and Human Services Department

NASA

Transportation Department

Treasury Department

Veterans Affairs Department

If Eugene "Lee" Carrick's new career as president
of Perot Systems Government Services
were a Broadway musical, it probably would
be "Most Happy Fella." After nearly six months
on the job, Carrick said he relishes the opportunity
to steer the company's strategic course.

"I enjoy that role of being able to look further
out," he said. "I like this strategy role."

Carrick first gained the big-picture perspective
as a space operations engineer with
the Air Force at Cape Canaveral, Fla., and
Vandenberg Air Force Base, Calif. He also
worked on NASA's initial
space shuttle program where,
he said, everyone was oriented toward one
important goal over long periods.

After his retirement from the Air Force,
Carrick joined a small information technology
company and stayed on when it was purchased
by Northrop Grumman Corp. When he
left Northrop Grumman after a dozen years,
he led the enterprise solutions group.
Carrick joined Perot Systems Government
Services as executive vice president for national
security in November 2007. One month
later, he was named to succeed departing president
Jim Ballard.

"We have very similar leadership styles," he
said of the transition. "It was easy for me to
come in and fit into that leadership model.
We're really headed in the same direction. Our
key strategies, the markets we're chasing really
remain unchanged."

SETTING HIGH GOALS

Carrick said the government unit
will bring in $650 million in federal
contracting revenue in 2008.

It is ranked No. 41 on Washington
Technology's 2008 Top 100 list of
the largest government contractors.
The government revenue still trails the
company's health care practice with its $1.2 billion
in annual sales, the biggest division within
Perot Systems Corp.

Carrick's goal is to reach the $1 billion mark in
five years by taking advantage of the parent
company's commercial services, such as business
practices and health
care.

That implies about a 13
percent compound annual
growth rate for government
services, said George Price,
principal at investment
banking firm Stifel, Nicolaus
and Company Inc. "Could it
happen? Sure, it could happen.
But I think it could be
challenging for them."

Price said Carrick will
have to make some major
acquisitions to meet the goal.
Once there, he added, "I
don't think the competitive
landscape for them changes
dramatically." EDS Corp.,
Computer Sciences Corp.
and SRA International
Inc. will remain Perot
Systems' primary competitors,
Price said.

"Acquisitions are always
an option," Carrick said.
"We're looking ahead. It's
definitely part of our fiveyear
plan. No question."

Carrick will also need to
take advantage of Perot
Systems' core competencies,
especially its health
care offerings. It's an area
that will see increased attention in government,
especially if a Democratic administration takes
office in 2009, Price said.

Carrick called the government sector "a very
fertile market for us" no matter who wins the
White House. There will always be uncertainties
about budgets, administrations and agency needs, he said, but the government must continue
to function. And it will have to do so with
fewer employees and a depleted cadre of seniorlevel
expertise.

"They have to cut costs," he said. "I believe
there will be a continuing tightening of the
budgets [and a drive for] more efficiency. That,
to me, leads to things like outsourcing, bringing
capabilities to them that can improve their
business process, and that's what we do."

As an example, he cited a $400 million contract
with the Education Department. Perot
Systems won the Education Department Utility
for Communications, Application and
Technology Environment contract, known as
Educate, in October 2007. It was the fifth
award the government contractor has received
from that department in less than three years.
And Carrick wants to make sure it is not the
last.

The expected wave of experienced government
employees retiring during the next few
years is another reason why Carrick sees government
as a fertile market. "We can help
[with] the infrastructure, the business rules,
the technology that will help them almost regrow
some of that workforce," he said.

Under Ballard's leadership, Perot Systems
made some critical acquisitions, including the
$250 million purchase of QSS Group in
January 2007, nearly doubling the company's
government business. QSS held spots on several
large governmentwide acquisition contracts.

"I don't see any radical changes, so any acquisitions
we do would be in" our normal area,
Carrick said. "We're not looking to go do something
totally different. We'll stay pretty pure."

However, he declined to be more specific about
what types of companies would be of interest.

BUILDING RELATIONSHIPS

For the moment, Carrick is working to more
fully integrate the expanded workforce and
develop a management style that accommodates
current and expected growth. "There is a little
more internal management that I am focusing
on now that the company has grown," he said.
"We need to do that because I want to get to
$1 billion soon. When you get to that level, you
have to have a different infrastructure, a different
style of operating, than when you're at $200
million" in revenue.

Carrick visits the corporate headquarters in
Plano, Texas, at least once a month, sometimes
every other week. "I need to do that being new, to
build those relationships and just learn the culture
and meet the people," he said. "And every
time I go down there, I learn something new,
which is good."

The headquarters in Plano provides human
resources, finance and sales support. "I get the
benefit of the process and the flow, the things I
don't have to worry about day-to-day," he said.

That gives him more time to enjoy the responsibilities
of formulating company strategy. To further
that end, Carrick fosters and encourages collaboration
and the creative thinking of all 3,300
employees at the company, based in Fairfax, Va.

"I'm very people-centric ? it's just the way I've
grown up."
Carrick said, "I keep telling my folks, 'I'm not the
smartest person in the room, let me assure you.
But if we get six or 12 people in the room, we probably
can come up with a pretty decent answer to
whatever problems we face as a company.'"

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

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