Government Business Isn't Just Uncle Sam

BDM is one of several federal contractors seeking a future in state and local government markets

A $27.5 million contract BDM Federal won earlier this month with the Dayton, Ohio, public school system represents the kind of deal BDM president Philip Odeen plans to target in the future.

BDM will operate the school district's information services department and develop an information system that brings together financial management, human resources and student information, Odeen said. The contract may be significantly smaller than the $774 million information technology corporation is used to garnering from the Defense Department, but with the Pentagon slimming its budgets, state and local governments are becoming an increasingly hot prospect for many federal contractors.

"The move into state and local governments is picking up steam," said Robert Dornan, senior vice president of McLean, Va.-based Federal Sources Inc., a consulting firm that specializes in federal, state and local infotech markets.

In addition to BDM, companies such as Science Applications International Corp., PRC, Anderson, EDS

and Oracle are all focusing increased efforts on capturing state and local government contracts.

Historically, the commercial groups of large corporations were responsible for winning local and state government business. But that strategy wasn't working too well because commercial groups tended to take "the path of least resistance, the path that brought in the most money," and those deals weren't with local governments, Dornan said.

Now companies are giving their federal divisions a chance to try their hand at winning state and local government business.

The people who are used to dealing with the federal government have an easier time managing the bureaucracies and the frustrating procurement issues that companies face when selling to any government, Dornan said. These individuals need patience to deal with each locality's peculiarities -- patience that workers in the

federal units presumably learned dealing with the federal bureaucracy.

BDM Federal is one such firm that is looking at the 30,000 jurisdictions around the United States as a way to supplement its federal business. BDM Federal, which still earns 60 percent of its revenues from the Department of Defense, is concentrating on providing information technologies to schools. BDM Federal is creating an information system for Prince William County Public Schools in Virginia, Washoe County, Nev., schools, and most recently won the deal for Dayton public schools.

"This contract with the Dayton Public Schools further confirms BDM's position as the nation's leading K-12 information technology systems integrator," said Odeen in announcing the award in April.

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