The month that was

A roundup of important news and trends

Ticking clock or time bomb?

The April 8 deadline looms for the end of the sixth continuing resolution that has kept the government operating since Oct. 1.

At press time, Republicans were waiting for a White House proposal, and House Speaker John Boehner (R-Ohio)  will attempt to design a deal that all parties can live with.

Already agreed upon are $10 billion in cuts, but there is a push for $20 billion more. Staunch budget hawks on the GOP side still want another $30 billion in fiscal 2011 cuts.

With military operations going in Iraq, Afghanistan and now Libya, a deal specific to the Defense Department likely will be struck, but there is still a serious risk of a partial government shutdown.

In essence, the government is living paycheck to paycheck, with many agencies stopping new projects as contractors and government employees worry about furloughs.

And no one is talking about the debt ceiling — yet.

Protest woes continue

Contract protests continue to shake up even the largest players in the government market.

Northrop Grumman Corp. is back at square one in its pursuit of the Homeland Security Department’s $2.6 billion infrastructure contract for its new headquarters.

The company won the contract in September. But the losing bidders protested, and DHS and the General Services Administration decided to pull the award and start over. That was before the Government Accountability Office had reviewed the protests.

Northrop Grumman called foul and filed its own protest, which GAO denied.

No word yet on when a new award will be made or how the delay in the IT infrastructure contract will affect the construction of the new headquarters campus in Washington.

CACI International also had a victory snatched away when GAO told DHS to revise and recompete a $450 million contract for financial systems modernization.

Science Applications International Corp. dodged the protest bullet involving its $2.5 billion State Department Vanguard II contract for IT consolidation. One of the incumbents, Northrop Grumman, filed a protest but withdrew it after SAIC added the company to its team.

More portfolio shaping ahead

In the earnings call for the end of its fiscal 2011, SAIC announced that it was looking for buyers for its units that worked in the gas and oil IT business.

The company estimated that the units bring in about $200 million in annual revenue, but because they are so different than its core government business, SAIC decided they were no longer a good fit.

In the meantime, the company plans to be a more aggressive acquirer in the government IT space, perhaps going after larger acquisitions than the smaller, business-specific deals that the company has been pursuing.

Finmeccanica, an Italian defense company that acquired DRS Technologies several years ago, also is reshaping its business mix. The company said it is looking to divest some as-yet unnamed portions of DRS.

The moves by both companies are becoming more common among government contractors in this tight economy as they shed units that are not mission critical and try to acquire businesses in faster-growing portions of the market, such as cybersecurity, intelligence and health care.

New hires of note

March will be remembered as a busy month in the executive suites of several companies.

  • TASC Inc. saw its CEO Wood Parker retire. He will be replaced by the company's chairman, David Langstaff. Langstaff gave up the chairman’s spot to another board member, Peter Marino. Parker led TASC through its buyout from Northrop Grumman two years ago. Langstaff is the former CEO of Veridian Corp., a company he sold to General Dynamics in 2003. Parker will remain with TASC as vice chairman.
  • CACI International named Daniel Allen as its chief operating officer. He’ll oversee four business groups: national solutions, transformation solutions, enterprise technologies and services, and mission systems. He joins the company from Northrop Grumman, where he led the intelligence business in Northrop’s information systems unit.
  • FedStore Corp. brought on Skip Trahern as its new president. He most recently was with Cisco Systems Inc. He quickly brought on Jay Jabbari as senior vice president of sales. He comes from Hewlett-Packard Co.
  • ManTech International Corp. named retired Army Gen. Daniel Keefe as the company’s senior vice president for strategic initiatives in its Technical Services Group. The group provides services in global supply chain and logistics; command, control, communications, computers, intelligence, surveillance and reconnaissance; and IT modernization support. Keefe joins the company from L-3 Communications.

Quotable: “When times get tight, you have to be more competitive. You have to write better proposals; you have to have better solutions." Stan Sloane, CEO, SRA International Inc.
 

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