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Charles Rossotti, IRS


Charles O. Rossotti, chairman of American Management Systems in Fairfax, Va., has been unanimously approved by the Senate to become the next Internal Revenue Service commissioner. The IRS lately has been criticized for everything from its management to its computer technology. Rossotti is hoped to transform the beleaguered agency in part through his high-tech knowledge. Paul Brands, chief executive of AMS, is the front-runner to replace Rossotti as chairman of the company, sources said. AMS' board of directors will pick a successor to Rossotti, who helped found the company in 1970, at its regular meeting Dec. 5. Brands has been with the company for 20 years, the last five as CEO.


Lockheed Martin Corp.'s sale of three businesses to General Electric Co. answers a somewhat nagging question - what will happen to the 29 million shares of preferred Lockheed Martin stock GE owns? By selling the units to GE, Lockheed Martin can retire those shares, the company said. The deal is valued at $2.8 billion. Lockheed Martin is selling Access Graphics in Boulder, Colo., a distributor of Unix-based workstations and other hardware; Lockheed Martin Aerostructures in Middle River, Md., which primarily produces thrust reversers for GE and Pratt & Whitney engines used on large commercial aircraft; and Lockheed Martin's stake in Globalstar, a partnership of telecommunications service providers and equipment manufacturers formed to create a low-earth-orbit, voice and data satellite network. Because GE, Fairfield, Conn., traditionally does not keep partial ownership for the long term, it likely would have sold the shares, said Wolfgang Demisch, an analyst with BT Securities, New York. Lockheed Martin did not like the possibility of an unknown third party owning a significant amount of stock, he said. "This was a reasonably efficient way to remove that overhang," Demisch said. GE has had the stock since Lockheed Martin bought its aerospace unit in 1993.


Blue Water Capital, McLean, Va., handed out part of its $25 million venture capital fund Oct. 31, with an investment in Net2000 Group in Vienna, Va. The placement leaves Blue Water with only one investment to go before finishing placement of its first fund. According to Reid Miles, managing director of the firm, a second fund is currently in the works. Miles said that the new fund is targeted at $100 million - four times the size of the first. Blue Water will go after companies that focus on telecommunications, software, information technology, multimedia and content. And although the firm will look at any investments in the United States, it is giving special attention to companies in the Mid-Atlantic and Midwest regions. Miles anticipates raising money for that fund through the middle of 1998. Miles would not disclose the amount of the investment in Net2000, which is an authorized dealer for local exchange carriers and designs complex communications networks for commercial and government clients. Other investors in this tranche include Mid-Atlantic Venture Fund, Reston, Va., and Societe Generale of France. The first fund for Blue Water was formed in January last year. It has made seven investments to date, three of which are in the Washington area. The final investment should close by the middle of November, Miles said. He would not name the company, but did say that it is also in the Washington area.


Yurie Systems Inc., Landover, Md., will buy Data Labs Inc. of Gaithersburg, Md., for more than 350,000 shares of stock. At Yurie's closing price on Nov. 3, the deal is valued at $11.1 million. Yurie, a manufacturer and seller of wide area network technologies, should complete the acquisition by the end of this month, the company said. Data Labs, a privately held company, makes products that can run voice, video and data traffic through Yurie's WAN systems. A public company since early this year, Yurie is best recognized as Business Week magazine's No. 1 hot growth company in America this year.


America Online chairman and chief executive Steve Case has broken into Entertainment Weekly's Top 101 most powerful people in the entertainment industry. Case was ranked No. 98, beating out the British singing group the Spice Girls, who held the 101.5 spot. Case made the list for "positioning AOL as the common man's door to the Net," the magazine said. Case was one of a handful of information technology entrepreneurs to make the annual list. Bill Gates was ranked No. 32, moving up from 37 last year. And Jeff Bezos, founder and CEO of online bookseller Amazon.com, was ranked 96. Like Case, this is Bezos' first time on the list.


World Wide Technology Inc., St. Louis, one of the top IT 8(a) companies, plans to spend $750,000 over the next year in an attempt to win $50 million worth of single-award contracts, said Joseph Koenig, director of federal sales. To win that backlog, the company, which specializes in imaging and work flow management, networking and telecommunications, will probably bid on about $150 million in contracts, Koenig said. The company is forming a new division to concentrate on pursuing single-award contracts. One of the possible headquarters for the new unit is Northern Virginia. World Wide Technology, which had about $82 million in revenues in 1996, was ranked No. 2 on Washington Technology's list of Top 25 8(a) companies.


The U.S. Senate's version of the patent reform act is likely to be pushed off the packed calendar, delaying a floor debate until early next year. The measure is supported by large companies, but is opposed by some advocates for small business and inventors who say it weakens their patent protections.


A panel of Maryland government officials is looking for ways to close the 20 percent gap between private-sector and state compensation packages offered to information technology experts, said Leslie Hearn, the state's chief information officer. Although the state may not be able to match private-sector pay rates, it may be able to offer some combination of pay and benefits that could stem the loss of IT experts to the private sector, he said.


Republican legislators are using the World Wide Web to petition the people for any blood-curdling tales of abuse and torture inflicted by the Internal Revenue Service. The tactic, a form of reverse lobbying via the Internet, is intended to bolster the GOP's effort to overhaul the IRS and institute a new tax code. In October, media-magnified hearings on IRS "horror stories" prompted the White House to accept a GOP-backed plan that would establish an outside panel to oversee IRS operations.


Worldwide Sales
1997 2000
United States 33.6% 33.7%
Japan 24.1 21.5
Asia Pacific (Singapore, Korea,China, Taiwan) 21.8 24.3
Europe 20.4 20.5
Year Global Sales Annual Growth Rate
1980 $13.1 billion 27.2%
1985 22.1 16.8
1990 50.5 1.6
1995 144.4 41.7
1997 139.1 5.5
1998 162.6 16.8
1999 193.5 19.0
2000 232.3 20.0

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