TOP 100: The principles behind ECS Federal's push to $1B

ECS Federal has gone through some significant changes in the past year but its core and its goal remain firmly in place.

On the surface, ECS Federal looks a whole lot different now than it did in 2017, but at its core, it’s business as usual. And for ECS, “usual” means a slew of contract wins, including a 98 percent recompete win rate, and a strong acquisition strategy.

The company holds the No. 47 spot on the 2018 Washington Technology Top 100 with $466 million in prime contracts. Last year, the company was ranked No. 62.

Holding company On Assignment, now known as ASGN, acquired ECS at the beginning of the year, making the private company public. But that’s really the only change, said George Wilson, ECS CEO. The management and technical teams are intact. In fact, the employee base is stronger than ever after the company made its own acquisition and gained 400 workers last year.

ECS closed out 2017 with about $586 million in revenue – a new record, thanks to its April 2017 acquisition of InfoReliance, a provider of cybersecurity, cloud computing, software engineering solutions and managed services. Wilson said ECS’ goal is to reach $1 billion in four years.

“We compete with the big companies, the very, very large companies, and we compete successfully with them,” Wilson said.

One reason is because the company holds a spot – as of 2017 – on several major contract vehicles, such as One Acquisition Solution for Integrated Services, the $50 billion Alliant II and the Defense Information Systems Agency’s $17 billion Encore III.

“If the customer’s acquisition organization decides they’re going to use Contract A or B, we need to have that,” he said.

Also crucial is holding onto contracts the company has already won but must recompete. In the past year, ECS has successfully recompeted contracts. For example, it won an indefinite-delivery, indefinite-quantity (IDIQ) award with a ceiling value of $200 million from the Defense Advanced Research Projects Agency’s Strategic Technology Office to continue work that the company has been doing there for 15 years.

Additionally, ECS will continue its relationship with the National Oceanic and Atmospheric Administration, which named it a prime contractor to provide Environmental and Professional Support Services for the Office of Sustainable Fisheries under a $9.1 million contract. NOAA also awarded the company a blanket purchase agreement worth about $68 million to support the Office of Marine and Aviation Operations.

“That’s really important for a company that’s not a behemoth,” Wilson said. “If you’re losing your recompetes, you’re potentially losing a significant portion of your work.”

Of course, plenty of new business helps, too. Among the work ECS won is a contract with the undersecretary of Defense for intelligence doing algorithmic warfare and machine intelligence and a $111 million contract from the Army to develop and run the Secure Unclassified Network.

In April 2017, ECS acquired InfoReliance, a provider of cybersecurity, cloud and managed services solutions. The move added several hundred employees, but more importantly, new capabilities around cloud delivery and cyber in support of the company’s shift from a services organization to a provider one, Wilson said.

About a year later, ASGN, a holding company formerly known as On Assignment that specializes in providing high-end information technology temp services, closed on a $775 million cash acquisition of the newly expanded company.

“What was very interesting about that is when we started the process of looking for a potential buyer, they rose right to the top immediately,” Wilson said. “We’ve got sort of the best of both worlds in terms of we were acquired by a company that understands our industry to some extent, but we are not being totally integrated into ASGN. We operate as a segment of ASGN, report our finances to them, they report them to the Street as an independent segment, so our senior management team and technical talent didn’t change, which is not typical in acquisitions. Had we sold to a very, very large systems integrator, there would have been a good chance that our divisions, or our business units within ECS, would have been broken apart, put in different organizations within the big organization.”

Looking forward, Wilson sees potential for growth in the artificial intelligence and machine learning arena. The company already supports a military group that is applying artificial machine learning to computer visualizations and tactical systems to improve the use of intelligence gathered from multiple sources, including tactical drones, wide-area motion imagery and synthetic-aperture radars.

He also sees applications for AI in supply-chain logistics and management. For example, he said the military could perform targeted maintenance on a single plane rather than make blanket fixes to aircraft based on the number of hours in the air. Sensors could show exactly what’s getting worn down. “That significantly reduces the costs associated with maintaining some of these very complex aircraft,” Wilson said.

One of the biggest trends he’s seen in the industry in the past five years is a move away from what he calls low-price, technically acceptable work toward more engagement with the acquisition workforce. That’s evident in the development of Other Transaction Authorities, the Defense Innovation Unit Experimental and other organizations that ask industry for help in solving specific problems using solutions that push technology edges, he said.

“I’d like to see it continue that direction,” Wilson said. “That’s the area we’re focusing all of our attention. We’ve moved away from the lower-end commoditized services and we’ve moved more and more into delivering the advanced capabilities for some of the smartest people working in a collaborative fashion with their customers and solving some very complex problems. From all that, you’re able to build a much better workforce, a stronger culture and quite frankly, you’re able to attract more talent.”

Success boils down to company culture, he added. Employees who feel empowered to make decisions, work collaboratively and feel passionate about the organization’s performance as a whole, rather than their personal jobs will translate that confidence to customers, Wilson said.

“The government doesn’t need to hire another 1,000 people to come in and do something that the government’s doing,” he said. “They need 20 very talented people to solve a problem that the government bureaucracy can’t solve, and that’s what we tend to do with our customers.”