CACI's CEO sets sights on emerging national priorities

CACI International Inc. has held steady to its strategy of working with the government’s toughest and most important problems.

The result has been steady double-digit growth in the areas of defense, intelligence and homeland security. Don’t expect that to change anytime soon, but don’t be surprised if the Arlington, Va., company’s scope expands.

CACI Chief Executive Officer Paul Cofoni spoke recently with Editor-in-Chief Nick Wakeman and described what will drive the company's future opportunities.

WT: What trends in the market are impacting how CACI does business?

Cofoni: Once you get past the economy, it’s hard to see a bigger problem than national security. That’s where we’ve been focused, and it’s an area our people have passion for.

I can’t imagine we’d ever have enough intelligence. The demand is so strong. Whether it’s searching for a leader of an insurgency or a leader of a terrorist cell or searching for a group of enemy combatants, our people are in that fight, working with technology and databases for the collection and analysis of information. We’re also in the field, deploying and maintaining systems. Forty percent of what we do is intelligence related.

We’re not doing intelligence operations, but we do support the intelligence community, provisioning systems that can collect and analyze data and providing people who have analytic backgrounds, who can help in the actual analysis of the data.

WT: There has been some pushback about contractors doing intelligence analysis work. How has that impacted your business?

Cofoni: There has been a reduction of contractors in that area, but our business has managed to grow nonetheless. We’re providing high-level skills. The analysis we do, you could view it as something that the government could do, but I don’t think it is inherently governmental. Sorting through large volumes of data to try to find information, that’s not a uniquely governmental project, but this is a tricky area.

WT: So what is inherently governmental work?

Cofoni: The government has been talking about it for two years, and they haven’t defined it yet. They started off saying that anytime a decision is made, that’s inherently governmental. Well, decisions get made all the time by lots of people doing lots of things. So they still haven’t published any definitions yet.

What contractors to choose, what vendor to choose — that’s an inherently governmental function. The people who help write the request for proposals leading up to that decision, maybe not.

But you can almost take away the inherently governmental thing, if you said: Just avoid conflicts of interest. That means I’m not in a position where I’m making a decision that helps my company. Or I’m not in a position where I can influence a decision that could help my company.

As long as you eliminate that, then what is inherently governmental after that? You might not need a definition anymore.

WT: As a company how do you avoid conflicts of interest?

Cofoni: Whenever an RFP comes in the door, it gets fanned out by our leadership people with the question: Do we have anything going on that would be a conflict of interest related to this scope of work? Based on that process we avoid situations. It works pretty well.

WT: You’ve walked away from bids?

Cofoni: It happens every day. We have some people fire back and say, We can’t do it, because we’re doing X, Y and Z. We don’t want to put a lot of energy into developing a proposal without knowing if we’re heading into a conflict of interest.

WT: As you move beyond your core markets, what areas are you focusing on?

Cofoni: We want to stay focused on our core competencies and stay focused on the big problems our clients have. The big problem still is national security and counterterrism and that is where we are heavily focused. But looking out into the future there are other areas such as health care, energy, cyber and soft power that we are looking at.

Cyber, of course, is a huge threat to national security, and it’s a natural extension for us. We’ve been doing that kind of work, and we want to augment our capabilities.

Soft power, [shoring up the infrastructure of countries vulnerable to terrorism], is another natural extension for us. I see our abilities in areas such as training, consulting, analysis and engineering services. We are not going to build buildings or construct bridges and roads, but we might do project management on that kind of work.

We have some business in health care, health care logistics, health care IT for the federal government, so we’re looking to grow.

Energy is another area that is closely associated with national security interests and the economy. We all experienced the $4 a gallon prices of gasoline and realized what the impact is to our economy. In terms of national security, our military needs access to energy sources in order to accomplish its mission.

And there’s the climatic effect. Whether the world is warming or cooling, I don’t know, but I do know this: It can’t be a good thing to push pollutants into the atmosphere for our people to breathe. It seems to me that we ought to be working at some pace on the climatic issue as well.

If you take those three drivers — the economy, national security and the climate — that makes this a very big problem.

WT: What’s your biggest challenge as a CEO?

Cofoni: If you take all these different needs that the nation has, it’s almost like we’re in a national swirl on these issues. There aren’t what I would consider to be national plans and strategies for these areas.

Three months ago, we would have all said we’re going to have a national health care plan. Now, we don’t know. Similarly, energy is stalled out in terms of a national plan or strategy. Two years ago, $17 billion was set aside to go after cyber. Well, we sit here today without a national strategy.

So I spend a lot of my time trying to figure out exactly where the national priorities are going, where they turn into policy, followed by legislation, followed by funding.

WT: And that guides you on where you invest your resources?

Cofoni: It’s hard to make a big bet right now because it's unclear where we’re going to end up. And it’s not even a matter of the administration. It’s a matter of where the administration wants to go, where Congress will converge toward some compromise and pass legislation and supply the funding to make something happen.

For me, it’s small-bet time, not big-bet time, and I think that’s probably true of most of my peers right now. We’re all doing a little experimentation and probing and poking, waiting for the real plan to come up, whatever the real plan is going to be.

Meanwhile, back at the ranch, we know that the demands on us for intell resources are so high that I’m just staying focused on what’s working well here for us.