Top 100: No. 5

Top 100: GD's restructuring enters the refinement stage

Company puts focus on new capabilities, cloud computing

The budgetary gloom that manifested itself in multiple ways for government IT contractors in 2013 spurred General Dynamics to throw itself into a restructuring of its Information Systems and Technology (IST) group designed to give it the flexibility to easily gear up or down on specific programs.

“We done a lot of restructuring in the last year,” said David K. Heebner, executive vice president of General Dynamics IST. “The restructuring has been necessary to adapt to the conditions that our marketplace is in. While we’ve had some attention to that in the past, we are laser focused on it right now.”

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The company is ranked No. 5 on the 2014 Top 100 with $4.9 billion in prime contracts.

The restructuring was tailored to the market conditions of each of the three business units that constitute General Dynamics IST, Heebner said. C4 Systems, which is prime contractor for the Army’s high-profile, next- generation Warfighter Information Network-Tactical program, had the most dramatic restructuring of the three units, Heebner said.

Specifically, the Falls Church, Va.-based company reduced C4 Systems’ staff, put in place a more agile organizational structure, and consolidated financial and administrative functions, he said. As for the Advanced Information Systems unit, it was reorganized by agency rather than program, Heebner said. GDIT integrated all of its military work into one line of business rather than multiple business lines, he said.

“Each one of the businesses experienced a significantly different reorganization tact in the last year,” “Heebner said. “Now it is a matter of refinement, not a matter of significant change.”

Steering the company through the major challenges it faced in the government market last year was Chairman and CEO Phebe Novakovic, who ascended to the company’s top position in January 2013.

“General Dynamics performed well in 2013, reflecting our continued focus on operations, cost management, cash generation and our commitment to meeting customers’ requirements,” Novakovic said in a statement accompanying release of the company’s 2013 financial results.

The IST group’s defense portfolio contains a number of key programs, such as the fire and weapons control systems for U.S. Navy and Royal Australian submarines, combat systems for the U.S. Navy’s Littoral Combat Ships, U.S. Army’s WIN-T, U.S. Army’s Handheld, Manpack, Small Form Fit Radio Program, and Common Hardware Systems (CHS-4) in which rugged commercial, off-the-shelf parts are furnished for purpose-built computers and network equipment.

General Dynamics plans to continue to invest heavily in its core capabilities, which Heebner lists as network modernization, open architecture technologies, and tactical communications production, fielding and support.

He acknowledged that the company has experienced a substantial decrease in its work for the Army as a result of the service’s declining budget.

“WIN-T is going to take longer because of the budget constraint that the DOD is dealing with right now, but that just means…we will do it in a longer period of time,” Heebner said.

One of the company’s key accomplishments in 2013 was the fielding of WIN-T to four active Army brigades, Heebner said. One of these was the 4th Brigade, 10th Mountain Division serving in Afghanistan, which benefitted from having Increment 2 on-the-move capability. 

C4 Systems has contracts for increments 1 through 3. In November 2013, the company won an initial $96 million task order for engineering and development services associated with Increment 3, which will ensure that WIN-T systems already fielded keep pace with advances in communications and networking.

GDIT had a number of key contract wins in the healthcare IT vertical in 2013, including a contact center for the Affordable Care Act, contact center for the 1-800-MEDICARE program, MEDICARE claim adjudication and virtual access to CMS data. Other key civilian contract wins were supply chain management for the State Department’s Bureau of Diplomatic Security and support for the Education Department’s Federal Student Aid Information Center.

Also in 2013 the company landed a spot on a number of indefinite-delivery, indefinite-quantity contracts, such as a GSA blanket purchase agreement to furnish cybersecurity services to the Homeland Security Department, Space and Naval Warfare Systems Center Atlantic’s integrated cyber operations support program, SSC Atlantic’s C5ISR support services, and Centers for Medicare and Medicaid’s healthcare quality data collection.

The most promising growth areas for General Dynamics are cloud computing, IT modernization, cybersecurity, homeland security, secure mobile communications and data, and health IT, Heebner said.

Cloud computing offers agencies data-related efficiencies and cost savings they might only have dreamed of before, Heebner said. With its gaze firmly fixed on the future, the company is “in the process of operationalizing cloud usage into the functions we support,” he said.

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