ATS Gears Up for Swift Growth, Acquisitions

By Nick Wakeman, Staff WriterA small McLean, Va., systems integrator is building a foundation for fast growth with strong past performance, a tradition of customer service, and the use of task order contracts and the General Services Administration schedule.Advanced Technology Systems Inc.'s revenues rose from $32 million in 1996 to $65 million in 1998, a growth spurt triggered by changes in the way the government buys information technology. All of ATS' revenue comes from government work."We've always been very focused on past performance, so as the government has focused more on best value, that has served us very well," said Ellen Glover, president and chief operating officer of ATS. She joined the company in 1983 as a programmer. ATS officials project revenue of $80 million in 1999 and $100 million in 2000, Glover said. The privately held company has 750 employees and a turnover rate of about 18 percent, she said.Founded in 1978, ATS provides consulting and systems integration to the government in areas such as financial management, administrative systems, case management and document management. Its clients include the Defense Department's security policy directorate, the departments of Housing and Urban Development and Labor, and the Federal Deposit Insurance Corp.ATS' approach is to become "very familiar with our clients," which tend to stick with the company "for a long time," Glover said. "They have been very good and very flexible with us," said Ed Barresse, an assistant director for library records and services at FDIC. His unit handles records for failed banks.The library has more than 3 million cubic feet of bank records, and ATS built a document management system for the library to keep track of the records from failed banks, Barresse said. "Only the Treasury and Defense store more records than we do," he said."We conducted a fair and open competition but we were happy to keep them," Barresse said. ATS' work for FDIC is worth about $10 million.According to Glover, keys to more recent growth have been getting on large indefinite delivery, indefinite quantity contracts, such as GSA's $840 million FedSim contract where ATS competes against seven other companies for task orders, and successfully using the GSA schedule."More of our work is being done through task order contracts and the GSA schedule than is being done through the [request for proposals] route," she said.In 1998, ATS did more than $28 million in sales through the GSA schedule, according to GSA.ATS has benefited from government agencies' increasing buying flexibility, but there has been a downside, Glover said. Some contracts — such as the upcoming GSA Millennia contract, a $25 billion multiple-award deal — are now too big for ATS to bid on as a prime, she said. In addition, ATS is not a part of any small business set-aside programs."But procurement reform also has enabled us to go after task orders that we couldn't have in the past," Glover said.The Department of Defense has awarded ATS work under IDIQs to develop systems that track technology transfer requests and inquiries for foreign nationals to visit defense and intelligence sites in the United States, said Ron Larsen, director of policy automation in the Defense Department's Office of Policy."Through our system we processed 219,000 visits to DoD sites last year," he said.ATS also is helping Larsen's office implement the Defense Message System and revamp business processes. "We are just like everyone else. We had old systems up, so we are BPRing those," he said, referring to business process re-engineering.Program management strength has helped ATS compete against larger companies, Larsen said. "They hire good people and they keep them," he said.Continuing to hire good people is a major concern for ATS. The company has boosted training and is participating in the Northern Virginia Community College's Technical Retraining Internship Program, which helps individuals looking to change careers. "You have to look at what you can do to increase the supply [of workers]," Glover said. "We've recognized that we have to be part of the solution as well."The company also is eyeing acquisitions as a way to bolster its growth. Glover expects to close by the end of 1999 one deal worth $10 million to $15 million. "We'll assess after that, but I would expect to make another [deal] in 2000," she said. The company is shopping for software development and networking companies that put a high premium on customer satisfaction, she said. "We want someone with more of an orientation on long-term relationships," Glover said.With internal growth and acquisitions, ATS should reach $200 million by 2004, Glover said. While the company might become a tempting acquisition target itself, the principals don't plan to bite. Co-founders Dell Lewis, ATS' chief executive, and Claude Rumsey, a member of the board, are not interested, she said."We think this is an exciting time for our company," Glover said.