CTA Sprouts New Entity for Government Work

CTA Sprouts New Entity for Government Work

By Nick Wakeman, Staff Writer

APRIL 26 ? Computer Technology Associates Inc. is spinning off its traditional information technology public-sector work into a separate company, to be called CTA Government Systems Inc.

The new company, based in Bethesda, Md., will assume CTA'S existing public-sector business of providing high-end systems engineering and information technology services to federal and state agencies. It will have about $20 million in revenue this year.

CTA will continue to pursue electronic government and commercial Internet work.

"The basic reason for the spin-off is to sharpen the focus of both businesses," said Tom Velez, chief executive and co-founder of CTA. "The nature of the e-government and e-business markets demands business models that diverge from those associated with the demands of the more stable, rigorous, multidisciplinary needs of agencies, such as the Department of Defense and the Federal Aviation Administration."

Initially, CTA Government Systems will operate as a wholly owned subsidiary of CTA, but plans are under way to complete a tax-free spin-off at the earliest possible time, meeting legal and government requirements.

Ray McMillan is CEO of the new organization. He is a member of CTA's board and former manager of its information technology systems business. McMillan also is a retired Air Force brigadier general.

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