DynCorp reorg fuels boom
An inside look at how DynCorp International uses new processes and infrastructure to fuel a boom in its business.
Nearly two years after being acquired by Cerberus Capital Management, DynCorp International has been transformed into an almost totally different contractor, having reengineered its business processes, redesigned its corporate infrastructure and functional back office capabilities, implemented a market-capability focus to its business strategy and bolstered its supply chain function.
As a result, DynCorp has enjoyed seven straight quarters of aggressive growth, reached nearly $4 billion in gross revenues, doubled its new business pipeline and gained the kind of flexibility, solidity and confidence it needs to start bidding as a prime contractor on large, multi-billion dollar vehicles in the near future.
With more than $3.3 billion in prime contractor dollars last year, DynCorp ranks No. 10 on the 2012 Top 100.
“We’re a hungry company now, very agile and incredibly lean,” said DynCorp President Steven Schorer. “We’re still working on our back office, but our infrastructure and the process model are greatly improved.”
The result is the company can be more aggressive in its bidding and can pursue opportunities it couldn’t before, he said.
As an example, DynCorp formed a joint venture called Mission Readiness with OshKosh Defense, Force Protection Industries and McLane Advanced Technologies to pursue a $3 billion, five-year contract issued by the Army TACOM Life Cycle Management Command for support and maintenance of mine resistant ambush protected vehicles.
The company is also competing for the follow-on to the Field and Installation Readiness Support Team program, a $24 billion multiple-award contract for logistics and programmatic support to the warfighter, and the $5 billion Army Intelligence Security Command’s Global Intelligence Service contract.
DynCorp is also interested in participating with Raytheon, as either a prime or a subcontractor, on the Teach, Educate, Coach program, a $6 billion, multi-award follow-on to the Army’s Warfighter Field Operations Customer Support program, currently held by Raytheon.
Although DynCorp is performing at a higher level across all business units, the reorganization in particular has helped the company’s aviation business, Schorer said.
The unit captured several re-competes during the past year, most notably a $490 million contract to continue providing aircraft maintenance and logistics support at the Naval Air Warfare Center Aircraft Division at Patuxent River, Md., and a $400.9 million contract to service and maintain aircraft assigned to the Air Force’s 11th Wing and 89th Wing at Andrews-Naval Air Facility Washington, D.C., including Air Force One and Air Force Two.
The company also captured several Army and Air Force aviation maintenance support programs in 2011 and made good on a strategic goal to leverage its global experience and footprint to win international government business, grabbing new contracts from the air forces of Saudi Arabia and Oman.
And in April, the aviation unit made a successful diversification play, winning a $176.9 million from NASA to provide support for flight operations, maintenance, repairs and alterations to aircraft, spacecraft-readiness training, airborne research and development and other services.
Even with government budget cuts and a more austere environment, Schorer said he expects DynCorp to continue to grow significantly, especially in the areas of training and support logistics for the military and the intelligence community. As a result, he said, the company’s biggest challenges moving forward will be managing growth and hiring more staff.
“We’ve already been dealing with this increased demand, since we’ve grown by over $2 billion in the last four years and have had to build infrastructure that we didn’t have,” Schorer said, adding that the company last year invested in the construction of two quality logistics hubs, one in Texas and one in Dubai, to mechanize and support its supply chain activity.
The steps taken over the past few years to develop new leadership and foster a new culture should help DynCorp excel even in lean times. “We’ve become more aggressive, more thoughtful and have a strong business process and follow-through," Schorer said. "I think it’s made a real difference for us and our customers and it will continue to make a difference.”