WT Business Beat

TSA lays ground work for next IT infrastructure contract

EDITOR'S NOTE: I updated this blog to correct the value to CSC. Thanks to commenter "Rocky Balboa" whoever you are.

One of the more hotly contested and lucrative contracts of the past decade is coming back for a recompete as the Transportation Security Agency has released a request for information for its IT infrastructure contract.

Currently, the contract is held by Computer Sciences Corp., which won the work in 2009 but then had to fight off multiple protests from Unisys Corp., which held the predecessor contract.

Unisys won the first infrastructure contract in 2002, shortly after TSA was created following the Sept. 11, 2001, terrorist attacks. The contract was worth about $2 billion to Unisys from 2002 to 2010 when CSC took over.

For CSC, the contract has also been lucrative. According to Deltek’s procurement data the contract has brought in $544 million in task orders since 2010.

The RFI indicates that TSA is looking for a managed services contract this time around.

The RFI is scant on details on what TSA wants exactly, but like most of these kinds of notices, it is asking questions about business models, contract structure, performance measures, and incentives for a managed service of an IT enterprise. Each of those different subject areas has a set of questions TSA wants answered in the responses to the RFI.

TSA’s IT infrastructure supports 60,000 employees at wide range of locations including TSA headquarters in Arlington, Va., and 550 airports around the country.

While TSA is just in the beginnings of its contract development and many unknowns are out there, one thing is known: CSC is going to fight to keep this contract.

The company confirmed its interest in an email to me and said that the big change from its current contract is the emphasis on managed services and cloud offerings.

“As agencies continue to explore effective ways to reduce the overall cost of delivering IT services while maintaining a high degree of enterprise agility, there's an added emphasis on managed services, some of which are housed in a variety of cloud environments,” the CSC spokesman wrote. “Managed services also provide a sharp focus on the end-user experience.”

In some ways, the changes TSA is exploring reflect some of the changes CSC has made with its own service offerings. The company has been building out its managed services offerings focusing on the cloud, cyber and big data capabilities while jettisoning other part of its business that aren’t focused in those areas.

In their email to me, they specifically mentioned a new cloud management platform that they announced this week. It builds off of the October acquisition of ServiceMesh, a cloud management company.

The new offering is called ServiceMesh Agility Platform and CSC says it “allows us to manage our clients’ environments more effectively by automating the deployment, management, governance and security of enterprise applications and platforms across private, public and hybrid cloud environments.”

Obviously, other companies have been making similar investments to bolster their own manage services offerings, after all we are at the beginning of the “everything as a service” era.

So I expect CSC will see plenty of competition as this contract rolls forward.

Responses to the RFI are due April 9.

Posted on Apr 04, 2014 at 7:31 PM1 comments

Recent layoffs part of CSC transformation effort

Computer Sciences Corp. is in the midst of layoffs as the company makes another move geared to transforming the company into a leaner enterprise focused on high-end technology services.

A company spokesman declined to disclose a number of people impacted by the layoffs, but the layoffs are occurring “globally” with no single part of CSC bearing the brunt of the cuts.

The company has gone through other rounds of layoffs since Mike Lawrie, the company president and CEO, was brought in February 2012 to save the company. Within weeks of taking the job, Lawrie described CSC as needing a “significant turnaround effort.”

The company has also undertaken several divestitures as Lawrie and the management team he’s put in place have worked to streamline operations and reduce operating costs. CSC also has been trying to change its operating model, which Lawrie said was overly complex and lacked accountability.

The company also has been making moves to increase its focus on next-generation services such as cloud, cybersecurity, big data and applications modernization. These layoffs are part of those efforts, a spokesman said.

“This new business model requires that we remix the skill base around many of our new next-generation offerings,” the spokesman said.

The company also is making efforts to re-energize its consulting business and strengthen sales, he said.

When Lawrie took over he said the effort to turnaround the company would be significant, and he wasn’t kidding.

Between layoffs and divestitures, the company has reduced its headcount from 98,000 as of March 30, 2012, to 80,000 at the end of 2013.

CSC's new business model has included an aggressive pursuit of as-a- service offerings, including application security, cloud brokering, hybrid cloud management solutions, and those are just a couple announcements from the last few weeks.

On many levels, the company seems to be headed in the right direction, and when you consider those being laid off, it’s obvious that change doesn’t come cheap.

Posted on Apr 04, 2014 at 7:53 PM2 comments

4 keys to building your international business

We’re used to companies like Lockheed Martin and Northrop Grumman talk about the importance of growing their international business.

Both companies have made investments around the world as a means to offset contraction and slower growth in the United States.

But going global doesn’t have to be just a play by the big boys. I recently spoke with Neil Albert, vice chairman of MCR LLC, a mid-size company with about 600 employees. International growth will play a critical role in the growth of the company as it looks for new clients for its integrated program management offerings.

Here’s a rundown of how they plan to do it.

Building from their base

For several years, MCR has been helping NATO through contracts with the Defense Department and the Air Force. Now, it is beginning to win work directly with the defense agencies of NATO countries, providing engineering services and cost and financial analysis services.

“We’re helping with a lot of downsizing, so they can analyze where they need to put their people and their resources,” Albert said.

Many of the services they provide to U.S. clients in the area of planning and acquisition support also translate to international customers, in both defense and civilian agencies. “That’s our core competency,” he said.

Some of their early success includes work with the Eurocontrol, which is the European agency focused on safe air navigation, and the European Space Agency. The company also has worked with the U.K. Ministry of Defence Cost Assurance and Analysis Service, the Korean National Defense University and the Japanese Aerospace Exploration Agency.

Building partnerships

Currently, MCR only has about 15 employees based outside of the United States, so the company has a lot of subcontractors. “The NATO component countries like to see companies based in their countries on the team,” Albert said.

But as MCR’s foothold grows, it’ll hire more of its own employees.

Building its reputation

Working with a variety of partners, both as the prime and the subcontractor, is important for building a reputation. MCR has partnered with much larger companies such as QinetiQ.

The company also participates in associations and professional conferences in Europe to raise its profile.
The conferences also are a good way to gather intelligence on upcoming opportunities, Albert said.

Help on the home front

MCR has gets about 8 percent of its revenue from international customers and Albert said he’d like to see that number grow to 20 percent to 30 percent over the next five to 10 years.

The McLean, Va.-based company was recently tapped by Virginia Economic Development Partnership to participate in its two-year Virginia Leaders in Export Trade program.

The program will help MCR in several ways including navigating the myriad banking, legal and regulatory requirements of doing business in other countries. Some of these are U.S. requirements such as International Traffic in Arms Regulations, known as ITAR, and other export regulations. Individual countries also will have their own regulations, Albert said.

“They’ll help on those and provide advice and support,” Albert said.

The program, known as VALET, also will help with business development efforts, and MCR might have the opportunity to participate in trade missions.

“The program should really help with our long-term success,” he said.

Posted on Apr 03, 2014 at 10:04 AM0 comments

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