Cap Gemini Grabs Unit<@VM>MAA Awards to AT&T, Bell<@VM>Justice OKs Arizona Web Vote<@VM>SM&A Bulks Up<@VM>Sytel Boosts Consulting Expertise<@VM>Maximus Makes Another Deal<@VM>BTG Flexes Buying Muscle<@VM>Leavitt Books Full Payment<@VM>GSA Awards Service Contracts

Paris-based Cap Gemini's planned purchase of Ernst & Young Consulting will create a global government player with about $525 million in annual public-sector revenue.

Ernst & Young's consulting might coupled with Cap Gemini's systems integration and IT capabilities will create a formidable player in the government market, said Tom Davies, senior vice president of market research company Current Analysis Inc. of Sterling, Va.

The $11 billion deal, announced Feb. 29, will give Cap Gemini $7.5 billion in annual revenue, 7 percent of that coming from the public sector. The deal should close by June after votes by Ernst & Young partners and Cap Gemini shareholders.

Of the Big Five accounting firms, Ernst & Young was the weakest player in the public-sector market, mostly because it could not pursue large systems integration projects, Davies said. But this "will really strengthen both companies in the government market, because it gives them the capability to do end-to-end e-business solutions."
AT&T Corp., Basking Ridge, N.J., and Bell Atlantic Corp., New York, won the long-awaited Metropolitan Area Acquisition (MAA) contract to provide local telecommunications services to federal agencies in the Buffalo, N.Y., area.

The General Services Administration selected the companies Feb. 24 to provide local telecommunications services, including voice, switched data and transmission services. The value of government business is estimated at $40 million over eight years.

GSA's Federal Technology Service is managing the MAA effort, which began in May 1999, when AT&T won three contracts to provide local telecommunications services in Chicago, New York and San Francisco.
The Justice Department approved the Arizona Democratic Party's plan to use Internet voting in its March 11 presidential primary, but warned that it could still face a legal challenge if it does not sufficiently increase access for minority voters.

While Internet voting likely will increase voting access, "it is likely to increase access for non-minority voters to a far greater extent than it does for minority voters," said Joseph Rich, acting chief of the voting section in the department's Civil Rights Division, in a Feb. 24 letter to the Democratic Party.

The Democratic Party's plan allows for early voting by mail and the Internet, and then Election Day voting at 100 polling locations, most of which will have on-site Internet voting as well as paper ballots. Justice Department officials offered to continue working with the Arizona Democrats to expand the outreach to minority communities that have limited access to the Internet.

The Democratic primary, the first legally binding public election over the Internet, is being run by Inc. of Garden City, N.Y.
SM&A Corp. of Newport Beach, Calif., added to its modeling and simulation capabilities by picking up Alexandria, Va.-based Systems Simulation Solutions Inc.

Terms of the Feb. 24 deal were not disclosed, but SM&A is picking up $7.5 million in new revenue and customers among Defense Department agencies and other government contractors.

SM&A is a $100-million-a-year company that provides systems engineering, IT solutions and proposal management services to government and commercial customers. Systems Simulation Solutions has about 50 employees and develops modeling and analysis software.

"Together, we have the technical and marketing power to make major gains throughout the air and space simulation market," said Michael Piraino, SM&A's president and chief operating officer.
Network services company Sytel Inc. of Bethesda, Md., has acquired Creative Networks Inc. to add consulting and market research capabilities.

Terms of the Feb. 29 deal were not disclosed. With Creative Networks, Palo Alto, Calif., on board, Sytel will have more than $50 million in annual revenue.

Sytel provides networking services for the Federal Emergency Management Agency, the State Department and several commercial customers. Creative Networks consulting service specializes in helping organizations create online business processes.
Maximus Inc. of McLean, Va., is preparing for its seventh acquisition in 15 months. The systems integrator announced Feb. 28 that it plans to acquire Cleveland-based Crawford Consulting Inc., a provider of Web-enabled information systems and consulting services to state and local government courts and justice agencies. Maximus, which had $319 million in 1999 revenue, focuses on the state and local market.

Terms of the deal were not disclosed, but Crawford brings about $16 million in annual revenue. The deal is expected to close by the mid-March.

Last November, Maximus picked up Public Systems Inc. of New Castle, Del., and acquired the Center for Health Dispute Resolution of Rochester, N.Y., the previous month.

Fairfax, Va.-based BTG Inc. is acquiring the network solutions division of SSDS Inc. of Denver in a $14 million deal expected to close in April. SSDS has network security expertise and customers among the intelligence agencies.

Chief Financial Officer Todd Stottlemyer said BTG is looking for 5 percent to 8 percent of its annual growth to come from acquisitions, so other deals are in the works. The systems integrator posted $316 million in revenue in 1999.

The latest acquisition brings BTG an additional $31 million in revenue. In January 1999, BTG acquired STAC Inc. of Fairfax, Va., for $5 million.

Even governors pay Internet sales taxes.

After New York Times reporter Thomas Friedman addressed the nation's governors at a Feb. 27 meeting of the National Governors' Association, the association's chairman, Utah Gov. Michael Leavitt (R), announced that he intended to go online and buy each of the governors a copy of Friedman's book, "The Lexus and the Olive Tree: Understanding Globalization."

"I know you're all worried about the sales tax," Leavitt told the governors, who are split over the controversial question of Internet taxation. "But don't worry, I'll take care of it."
The General Services Administration's Federal Technology Service has awarded multiple satellite service contracts to companies to provide fixed, mobile and broadcast satellite services and equipment to federal agencies.

Contract winners are: Colsa Corp., Huntsville, Ala.; Comsat, Bethesda, Md.; Electronic Data Systems, Plano, Texas; Hughes Global Services, El Segundo, Calif.; John Tidrow and Associates, Fayetteville, N.C.; Marshall Associates Inc., Sterling, Va.; and Motorola Worldwide Information Network Services, Chandler, Ariz.

All federal agencies can use the fixed price, indefinite delivery, indefinite quantity contracts that run for one year and contain five one-year options.

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