Cyber drives Booz Allen's growth profile

Even with budget cuts security remains a top priority

Booz Allen Hamilton ended 2011 with several large contracts under its belt and a re-entrance into the commercial and international markets following the expiration of the non-compete agreement with its former commercial business partner spin-off, Booz & Co.

“While we’re selling all of our services, our focus really is primarily on cyber solutions,” said Gary Labovich, senior vice president and technology capability area leader at Booz Allen.

In January, under the leadership of Chairman, President and CEO Ralph Shrader, the company launched the Booz Allen Cyber Solutions Network to leverage its services and technology expertise to government and commercial clients worldwide.

Labovich said the center is one way Booz Allen is attempting to meet the challenges of government funding uncertainty, payment delays and agency budget cuts.

“Booz has done a good job of winning business over the last year,” said Bill Loomis, managing director at Stifel Nicolaus & Co. “As of the last quarter their backlog was up 11 percent year over year.”

He said Booz Allen’s numbers in 2011 were good and the company did very well in IT in a tough market even as it adjusted its revenue expectations downward through the year.

“That reflected the difficult budget environment,” Loomis said.

“Despite those trends we continue to grow our top line and we’ve continued to improve our margins,” Labovich said. “We’re investing strongly in cybersecurity. We still believe that despite the conditions, that’s going to be an area that the government is going to continue to invest in,” he added.

The company reported total revenue of $5.59 billion for fiscal 2011, up from $5 billion the year before. Booz Allen landed at the No. 8 position on the Top 100 this year with $3.8 billion in prime IT contracts.

“We tend to do well when there’s transformation going on. Clients are thinking about how to do business differently," Labovich said. “Even though there may be less business, they’re going to be doing it in a different manner and they’ll need firms like Booz Allen to help them do it.”

Major contract wins in 2011 included:

  • Named one of 14 prime contractors named to the Veterans Affairs Department’s Transformation Twenty-One Total Technology Program (T4) contract, a five-year, $12 billion indefinite delivery, indefinite quantity award.
  • Named one of 20 prime contractors on the Justice Department’s $1.1 billion Information Technology Support Services 4 (ITSS-4) IDIQ contract.
  • A five-year, $500 million IDIQ award from the FBI’s Special Technologies and Applications Office for Technical, Engineering, and Analysis Services.
  • One of three prime contractors on a $490 million IDIQ award from the Army Training Support Center for live virtual constructive gaming domains.
  • A five-year, $100 million IDIQ award from Treasury’s Office of Terrorism and Financial Intelligence/Office of Foreign Assets Control for Sanctions Support and Threat Financial Analysis.
  • A $50 million four-year award from the National Institutes of Health’s National Cancer Institute Center for Biomedical Informatics and Information Technology for scientific management support.
  • A $10 million sole task order from DHS’ National Cybersecurity Division.
  • An $8.1 million, three-year task order for engineering, planning, and region support for FEMA’a Disaster Emergency Communications Division.

Booz Allen operates in what Labovich called a three by four matrix – with three market areas: civil, security and defense; and four capability areas: Labovich’s technology area, strategy and organization led by Jack Mayer, analytics led by Karen Dahut and engineering and operations led by Ron Kadish.

“What we want to do now is help clients deal with the current issues, become more efficient, recognize that there are certain areas that they’re going to have to continue to invest in, like cybersecurity, no matter how tight the budgets get the security challenges continue to grow and become even more complex,” he said.

The company is in a hiring mode seeking to bolster its cybersecurity and big data analytics areas to expand sales within the intelligence community, having hired former director of national intelligence Mike McConnell to lead Booz Allen’s security business.

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