TOP 100: No. 10
TOP 100: DynCorp balances change, stability to overcome downturn
- By Zach Noble
- Jun 26, 2014
How does a company that has spent more than a decade heavily invested in supporting the wars in Iraq and Afghanistan deal with a year of sequestration and military drawdowns?
By starting early.
“In fiscal 2013, all the things we thought could happen did happen,” said Steve Gaffney, CEO and president of Dyncorp International, which ranks No. 10 on the 2014 Top 100 with $2.7 billion in prime contracts in fiscal 2013. “In years like this, the question becomes, ‘How do you read the tea leaves early enough to get ahead of the competition?’”
Gaffney’s positive that DynCorp is emerging strong from tough times thanks to years of preparation, some strategic partnerships and the right mix of change and stability.
“We’ve spent the last four years” – Gaffney joined DynCorp in 2010 – “building a values-based culture at Dyncorp,” he said. Those values include a focus on the future, not the moment.
Anticipating the pain of 2013, DynCorp restructured from five groups down to three: DynAviation, DynLogistics and DynGlobal.
The restructuring provides a good balance for the company, Gaffney said, with DynAviation handling the aviation support DynCorp was founded to provide, DynLogistics tackling the military supply and support and DynGlobal seeking to branch out by “leveraging 20 to 30 years of relationships worldwide” and providing DynCorp’s services directly to governments around the world.
Gaffney has been positioning the company to handle the ends of the wars in Iraq and Afghanistan – from which DynCorp gained billions in contracts, including nearly three-quarters of all State Dept. awards – by expanding other opportunities.
“Programs come, programs go,” Gaffney said of the wars ending. “The contingency operations piece of DynLogistics, we do that well but (demand for those services) is going to ebb and flow.”
DynCorp still took a hit – 2013 revenue was down over half a billion dollars compared to 2012 – but DynAviation is poised to pick up the slack, Gaffney said.
The group’s recent wins include 2012’s $54 million task order to support the 160th Special Operations Aviation Regiment at Fort Campbell, Ky., and last year’s $388 million aviation maintenance contract covering Regional Aviation Sustainment Maintenance - West Region (RASM-W).
Those wins and more put DynAviation in charge of two-thirds of all Army aviation projects going forward – and then there are the strategic partnerships.
Gaffney made particular note of DynCorp’s partnership with fellow Top 100 company Sierra Nevada Corp. (No. 41), a partnership that combines the smaller firm’s technical expertise with DynAviation’s vast resources and existing customer base.
“That’s part of the strategy (in tough times),” Gaffney said, “deciding whether to invest in new core capabilities or partner up?”
Gaffney cited joint wins with Sierra Nevada through the Multi Sensor Aerial Intelligence Surveillance Reconnaissance (MAISR) program as evidence of the partnership’s success and future promise.
That’s what’s kept DynCorp strong through a year of tightening budgets, Gaffney said: innovating while staying true to core competencies.
While DynCorp restructured, automated processes and pursued savings avenues – including a consolidation of its Northern Virginia footprint that generated $12 million in savings – one mantra underpinning 2013 was, Gaffney said, “Stay with what works.”
As the lean years continue, striking the right balance between changing it up and staying the course will be a key to contractors’ success.
“Stick with your core offerings and do it in a different manner for different customers,” Gaffney advised. Tweaking core competencies is “better than reinventing yourself” to tackle challenges.