Reliable Is in Vogue

Reliable Is in Vogue

Steve LeSueur

Everything's relative.

Many of the top-ranked companies on Washington Technology's Top 100 list ? companies such as Lockheed Martin, Northrop Grumman, Computer Sciences Corp., Raytheon, SAIC, EDS and TRW ? have seen their federal IT businesses grow moderately but steadily at rates of 8 percent to 18 percent a year.

In the late 1990s, such modest rates of growth typically left Wall Street investors cold. Investors preferred to place their bets on high-flying tech and Internet stocks. And why not? Revenue at high-tech firms was growing exponentially, and so too were their share prices. (Never mind that net earnings for many of these companies also grew exponentially, but in the wrong direction.)

Fast forward to the present. In the economic wreckage that has produced a struggling technology sector, modest but reliable growth rates look very attractive.

"There's been a rush to safety," said Richard Knop, managing director of the investment bank the Windsor Group LLC, regarding the recent popularity of many traditional government IT companies.

And this is due in part to the reliability of government agencies. "They have cash and they pay on time," said Ray Oleson, chairman and chief executive of SI International Inc.

That's the major theme running through this year's annual ranking of the Top 100 prime contractors in the federal IT services market. You'll see it in the overview to our Top 100 coverage, and also in Staff Writer Patience Wait's front-page story looking at commercial companies making the jump into the government market. It's steady work for those who can get it.

Senior Editor Nick Wakeman directed Washington Technology's effort to put together the Top 100 list and accompanying company profiles and stories. Federal Sources Inc. of McLean, Va., and Eagle Eye Publishers Inc. of Fairfax, Va., provided the analysis of government procurement data that enabled us to compile the list.

We trust that readers will tell us what they think.


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