Changing market feeds Booz Allen's growth
Company's program management services fit neatly into tight budget climate
- By David Hubler
- Jun 24, 2011
Whether federal agencies expand, contract or remake themselves, the result is contracting opportunities for Booz Allen Hamilton’s program management services.
“Whenever there’s big change in government, that’s usually a good thing for us,” said company Senior Vice President Gary Labovich. “For example, whenever there is either what looks like a downsizing or there are transformational opportunities, we tend to do well.”
Agencies facing reduced budgets or downsizing still must perform their missions so “they look to firms like ours to come in and help them deal with the organizational change – how are they going to do more with less?” he said. “That plays well to us.”
Case in point: During the past four years, contracts with the still maturing Homeland Security Department have grown to more than $244 million, putting Booz Allen among DHS’ top 10 contractors.
“We’ve captured a significant amount of business in the FEMA [Federal Emergency Management Agency] area,” Labovich said, citing program management as well as training and development support. “That’s been a real boon for us.”
That growth was reflected across the company’s revenues. Booz Allen came in at No. 9 on this year’s Top 100 list of the largest federal government contractors, with $3.7 billion in prime contracting revenue.
Booz Allen has a prime spot on DHS’s Enterprise Acquisition Gateway for Leading Edge Solutions (EAGLE) contract and has bid on the new EAGLE II IDIQ procurement.
“We’ve submitted for the recompete [award] and we have high expectations of being selected,” Labovich said. “Outside of that contract, when there are other technology opportunities, we intend to play there as well.”
The consulting company may not be bullish in the economy, he said, but its program management strengths make its top leaders “pretty confident that we’re going to continue to grow in this kind of environment. In fact, this kind of change might be a really good opportunity for Booz Allen.”
The company also is “busting at the seams” with cybersecurity opportunities. “We’re seeing huge returns on our investments. We’re pretty excited about all the opportunities out there; every agency in town has a need for it,” he said.
Among Booz Allen’s current major contracts, Labovich cited four of particular importance:
- The 10-year, $700 million Federal Aviation Administration Nextgen Systems Engineering 2020 IDIQ award to modernize the Air Traffic Control System. “There are elements of program management there [and] change management,” he said. “We’re starting to ramp up in a big way.”
- A National Institutes of Health $85 million prime contract supporting its national study on the environmental effects on children’s growth and development. The contract “really plays well to our FISMA compliance data collection expertise around privacy of information as well as our technology building data management systems to process all of this data,” he said.
- The five-year, $2 billion multiple-award prime contract from the Defense Technical Information Center (DTIC) . “It’s to provide soup-to-nuts software networks, information modeling and simulation support across all DTIC centers throughout the Department of Defense,” Labovich said.
- The five-year, $16.4 billion Rapid Response Third Generation Program from the Army Communications Electronics Life Cycle Management Command. “We’re starting to see task orders roll out of that,” he said.
“If you add all that up, we’re feeling pretty good about our backlog,” Labovich said. And with at least the initial budget crisis resolved, “We should start seeing some spending for these vehicles. And we think we’re in a great position to capture some of that spend,” he added.
“We remain pretty comfortable in the civil and intell[igence] markets. We see good opportunities there,” Labovich said. “But, again, if the budget really starts being impacted, it’s probably going to be impacted in the civilian [side] as much as anywhere besides defense. So we need to keep an eye out on that.”
For the time being, he said, Booz Allen “will stick to its knitting,” doing what it does best. As far as he can tell, the company is not in the market for any acquisitions at this time. As Labovich put it, “We feel pretty comfortable where we are and with what we have.”