CACI's new leader readies strategy for tough times

Daniel Allen has spent the better part of a year looking over CACI President and CEO Paul Cofoni’s shoulder, preparing for the change of command next month that will put him into Cofoni’s office.

To ensure a smooth and efficient CEO transition, effective July 1, Cofoni will assume the role of chief adviser to Executive Chairman of the Board Dr. J.P. (Jack) London. But he'll be ready also to advise Allen if needed, although as Cofoni told Washington Technology, Allen is “ready. He’s more than ready.”

Allen joined CACI in March 2011 as chief operating officer of U.S. Operations, having established a track record of consistent growth for large operations within the IT and intelligence community.

Before joining CACI, he served as sector vice president and general manager of Northrop Grumman's Intelligence Systems Division. Previously he served as senior vice president and deputy to the president of General Dynamics Information Technology

In January of this year, Allen was named president of CACI’s U.S. Operations, where he led initiatives to expand the company’s existing markets, its business base, program performance, and leadership and employee development.

Although Allen will take the reins during an unsettling time in the federal contracting market, he said he sees opportunities.

“There’s clearly a lot of dynamic issues facing us, and most importantly is understanding what the budgetary environment looks like. But clearly the needs of our government are still very demanding,” he said.

“We’ve spent a lot of time looking at our addressable market,” Allen said. “Paul has talked about our focus on certain clients – the DOD, intell, homeland security, government transformation – and has set a strategy for the company down that path.”

Looking ahead, he said, “I think that those needs and that strategy will continue. As we look at our addressable market, we see the funding that exists in that space is $235 billion.”

For CACI that means potentially $4 billion in contracts, he said.

“We have a lot of room to operate. Our challenge is how do we figure out and focus our energy in the right opportunities there and how do we ensure that we win the strategy component,” he added.

Asked how he plans to deal with the inevitable increase in competition for a smaller government purse, Allen said, “With the overall federal government’s objective of competing more work, that’s something we’re working very hard to ensure we’re prepared for. Price is becoming a more influential part of those decisions.”

Allen said CACI is working hard to meet that challenge with a lean corporate structure designed to keep costs under control.

“We have had a long history of really focusing on continuous management of our costs to maintain a lean organization and that has really helped us in maintaining a competitive price,” he said. “That process continues.”

Nevertheless, as president and CEO he will have to manage the company in the face of budget restraints, possible continuing resolutions instead of firm budgets and other unknowns.

Allen said CACI has plans to deal with such contingencies.

“We have an approach and we’ve made some assumptions,” he said.

“Within our current fiscal year ’13 plan, 70 percent of our revenue and earnings are current activities that are already on contract. So 70 percent of our business is fairly firm, very low risk of any of change tied to the dynamics you mentioned,” he said.

“Fifteen percent of that is recompetes, so that’s work we have close client relationships with, that will be recompeted and we’re putting all of our energy into winning that business and we’re seeing no indication that a client is saying ‘We no longer want to execute that contract,’” he said.

Allen said CACI expects the federal client base will stay in a continuing resolution mode for most if not all of fiscal’13. “That means there will be longer time lines tied to acquisition activities. In some cases the work will be extended,” he said.

Allen said for fiscal 2013 CACI expects to see revenues and earnings from “opportunities that are either in the acquisition process already, or in our pipeline and we’re working our way to the acquisitions.”

Nevertheless, he said, CACI is factoring delays into its planning process ‘so that we’re prepared for continued delays. If they award on time, that’s a positive upside to our plan.”

Allen added that CACI has been careful to remove from its planning what he called “demand creation” items, new technology ideas or programs that clients cannot pay for.

“We see those things as very, very hard sells in this environment so they’re no longer there,” he said.