Contract Watch

Defense-agency spending dominates May contract-award news

Defense work carries the day

Defense agency spending dominated contract news in recent weeks, first with the award of the whopping five-year, $16.4 billion Rapid Response Third Generation (R2-3G) contract going to seven companies, followed by an additional 19 awards totaling $825 million. At the other end of the spectrum, human services specialist Maximus Inc. got a $266 million vote of confidence from the Australian government.

Dividing the lion’s share of Defense Department awards were Computer Sciences Corp. and Raytheon Co., both tapped for the Army’s R2-3G award.

The Army returned to CSC for $226 million in services and support for the Defense Communications and Army Transmission Systems, which maintains satellite, wireless, fiber-optic and microwave technologies for DOD communications transmission systems.

Raytheon also swept up a pair of awards — $138 million from DOD and $54 million from the Navy — to build a secure data-sharing network for the Defense Information Systems Agency and retrofit Super Hornet aircraft with new radars.

Good on Maximus

Australia’s Education, Employment and Workplace Relations Department tapped Reston, Va.-based Maximus to continue and expand its Job Services Australia contract, extending services to a total of 73 sites. Through its MAXNetWork subsidiary, the company serves 37 sites with its model for combining employment, training and health solutions with local community, nonprofit and charitable intervention services. Under the new contract, Maximus will also offer clients assistance and homelessness prevention services and work experience placement.

But this overnight success was more than 10 years in the making and did not begin auspiciously, said Akbar Piloti, president of human services at Maximus. “I think the first story on us in Australia was in the Sydney Times, essentially calling us Maximus, this giant American company getting into our market to get money from us and send all the profits to the United States,” he said.

Piloti, who led the HR effort for the Australian project, was prepared for such suspicions and had a plan to allay them. “You have to consider the local culture, the dynamics of how things are done and start small,” he said.

The first thing the company did was to buy a small Australian human services firm to ensure that a local effort would employ local people, he said. “That’s key to getting a foothold in the market,” he said. That model worked equally well establishing the company in Israel, he said. There, Maximus formed a joint partnership with a local firm.

Maximus has developed a working model, based on best practices from similar efforts around the world. Typically, company representatives head any new effort, such as the Australian one, hiring and training local people in the company’s working model. When the local staff members have gained the knowledge and experience to handle the operation on their own, Piloti said, the U.S. managers depart.

However, simply superimposing what worked in one setting on a different one is nearly always a mistake, he said.

A prominent — and common — model for such a failure was established by Euro Disney in 1992 in France.

“Initially, Disney’s HR department failed in almost all aspects considering the lack of cultural awareness, and misunderstanding of the French laws and the traditions/habits of the French people,” Guergana Karadjova-Stoev and Bahaudin Mujtaba, both of Nova Southeastern University, said in an analysis of that failure. Bolstered by its successful U.S. and Japanese parks, the company’s “human resources management did not consider something very important — cultural differences,” the researchers said.

“Before I even went to Australia, I studied, I read books, articles, everything I could about their culture,” he said.

That kind of continuing cultural awareness is a crucial consideration in Maximus hiring, he said. It’s not merely for show, like having one’s shoes shined for a job interview.

Before heading to Australia, Piloti read much about the Tall Poppy Syndrome, well known in Australia. “If you are successful, that’s OK, but if you’re successful and are seen as bragging about it, people find that offensive,” he said.

During a company meeting, one U.S. manager began extensively praising an Australian manager, he said. “I could see the Australian manager starting to blush and put his head down; he was clearly uncomfortable,” Piloti said. “So I called a break and took [the U.S. manager] aside and told him he shouldn’t do that and explained the Tall Poppy Syndrome.”

Maximus’ new three-year contract has two three-year options and will boost the company’s Aussie revenue from an annual $40 million to nearly $100 million. When Piloti, now in U.S. headquarters, first went to Australia, annual revenue stood at $20 million.

His secret: “Pay attention to quality, customer service and your employees,” he said. “Let people see you’re there to do a good job and be part of the community, not to just come in and try to suck the profits out.”

Talk the talk for success

After more than 20 years in human services, Maximus human services president Akbar Piloti has learned a few things about working with other cultures. “You can’t have one way to respond to everyone,” he said.

Here are some of his suggestions for establishing successful communication:

  • Pay attention to linguistics. It doesn’t matter if it’s a foreign country or a local group such as organized labor or the disadvantaged, Piloti said. “They all have their own lingo, and if you don’t use it, they won’t listen to you.”
  • Shelve the homespeak. “You can’t respond to proposals in American English,” he said. “It just emphasizes your foreignness.”
  • Let your words reflect the local ethos. “In the United States, it’s accepted that you may work on Saturdays,” he said. “But if you suggest it to Australians, they look at you in wonder. They work hard, but come Friday, they ring the bell.”
  • Discover understanding. “Before we assign local managers, we ensure they understand the model, but by showing them how our best practices model works locally, not by saying, ‘we’re the superpower, and we know best,’ ” he said.
  • Talk to include. One reason the company model works is that it’s always growing and adapting, Piloti said. The company learns from each engagement — a fact it’s important to acknowledge, he said. “When you take something [from an engagement], let them see that you’re adding their ideas to your best practices.”

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