New tools aid govt. contractors

For years, the market for business systems tailored to government contractors has favored large companies that could afford elaborate and pricey systems to help them pursue, win and maintain federal contracts. And choices have been limited to one or two sellers dominating the market.But in recent years, companies such as Wind2 Systems Inc., Adonix Inc. and Map ROI Systems Inc. have been pushing established players such as Deltek Systems Inc. as they target small and midsize companies that need project management, accounting and business development systems.Driving their interest is a robust government IT market that is bringing a multitude of companies to the federal sector, especially in defense and homeland security. These new contractors are discovering that they need to supply hundreds of documents about their business operations to the agencies they deal with, as well as cost data, accounting data, sales, purchasing, payroll and reporting information.Small and midsize companies need government-specific business systems to support their growth, said Predrag Jakovljevic, research director of enterprise applications at Technology Evaluation Center Inc., a software evaluation firm in Montreal.An accounting system for a small company of 10 to 20 employees might run from less than $100,000 up to $200,000. Jakovljevic said that for a midsize company of 50 to 100 employees, the cost could reach $500,000. A large company with several hundred workers could spend several million dollars, he said.Some of the new companies offering support services to government contractors are coming to market with proprietary solutions. Others act as resellers by forming partnerships with big software producers, such as Microsoft Corp., to customize off-the-shelf technologies. Last year, Wind2 Systems of Fort Collins Colo., a provider of project and financial management software for professional services firms, started offering solutions that let contractors meet the stringent contract accounting requirements of federal, state and local government agencies. The firm's solutions, which are Defense Contract Audit Agency compliant, also enable small and midsize government contractors to track and report on indirect cost data and to produce standard government forms. Apex Environmental Inc., a Rockville, Md., environmental services company specializing in consulting and remediation, implemented Wind2's solutions, switching from multiple programs to a single system that integrated financial accounting with project and government contract management. The new system allowed Apex Environmental to reduce its accounts payable staff from six employees to five, and enabled workers to access financial and project status data from one electronic source instead of having to search through hard-copy reports, according to a Wind2 case study.Adonix, a privately held company that provides accounting, budgeting and forecasting, business intelligence and customer relationship management business software, is another small company making headway in the market. The Reston, Va., firm is a reseller of Microsoft Business Solutions, including Solomon and Great Plains accounting applications, which it customizes for small and midsize government contractors. "This is one of the hottest areas for Microsoft at the time, focusing on the mid-market," said Michael Mahoney, founder, president and chief executive of Adonix.[IMGCAP(2)]The solutions have saved time and money for Carney Inc., a professional services company in Alexandria, Va., which develops training and learning solutions for government agencies, according to Mahoney and Microsoft, which recently published a case study about Carney. Carney used Adonix to tailor and implement Microsoft's Solomon for accounting functions and Microsoft Project Server 2002 for project management capabilities. The solutions replaced three systems the company had for project management, cost accounting and time-sheet reporting. The old systems limited its data-sharing capabilities and hindered data storage and productivity. Employees working on projects, for example, could not easily access data to update project timelines and other information, thereby causing problems with project tracking and monitoring, according to Microsoft's report.Whereas Carney once calculated and produced its budget once a year, it can now churn out its budget on a rolling, 12-month basis, producing detailed monthly forecasts, Mahoney said. Carney estimated a cost savings of $40,000 this year and a return on investment within 16 months, according to Mahoney and Microsoft."Before, the accounting people were pulling together separate information, and here we've integrated it to do it all," Mahoney said.Deltek, a Herndon, Va., provider of enterprise software and solutions for project-based businesses and professional services firms, has dominated the market for accounting solutions for government contractors, although it primarily targets large companies. It started out as a small accounting firm that developed solutions for federal government contractors. Today, it competes with the likes of Oracle Corp., PeopleSoft Inc. and SAP AG for larger implementations, and with Microsoft Business Solutions, Epicor Software Corp. and Wind2 Software for smaller projects.Rick Lowrey, Deltek's executive vice president and general manager, said he doesn't consider Adonix a competitor, because Deltek primarily serves a broad range of customers. He also said that although there's more emphasis today on support programs for federal contractors, many new companies coming into the business-systems market often disappear as quickly as they come. "Over the last 20 years, Deltek has continued to see a cycle of businesses churn in and out of government [business] to support contractors," Lowrey said.Map ROI Systems of Sterling, Va., is another young company trying to serve contractors. The company sells a Web solution called G-Force that helps contractors identify and compete for federal, state and local and international government contracts.The company competes with several others, including Federal Sources Inc., Input Inc. and Deltek, which offers a similar product called GovWin.Christopher Stahl, Map ROI's co-founder, president and chief executive, said that compared to GovWin, G-Force is a capture-management process program that offers a more comprehensive solution for government procurements from start to finish. "Our product is the only end-to-end solution ... that will uncover the identities of opportunities through submittal to award," Stahl said. He said G-Force's distinction is that it offers three main functions -- research, proposal management and capture management -- needed to win government procurements, while other systems offer only one or two functions.Deltek's Lowrey, however, said that although GovWin doesn't have a proposal solution as does G-Force, it offers contractors network automation and a government management solution for opportunities in the federal marketplace."Deltek takes it up a level," he said. "We don't deliver research. We're managing business processing around capturing that opportunity."Nevertheless, the efforts of companies such as Wind2, Adonix and Map ROI eventually could propel them into the big league of contractors, one analyst said."Targeting the smaller contractors is a way to get a foot in the door and gain a relationship with a group that may become larger in time," said Scott Tiazkun, research manager of enterprise applications at IDC in Mountain View, Calif. "The smaller contractors often serve as subcontractors to the big contractors. Going through a small contractor is a way to gain access to potentially larger installations." Staff Writer Roseanne Gerin can be reached at rgerin@postnewsweektech.com.