Big contract wins highlight the first quarter

A roundup of revenue and earnings reports from government IT contractors

The first quarter earnings season for 2006 has come to a close, and the results are in for most publicly traded government IT contractors.

L-3 Communications Corp. reported the strongest revenue growth among the group with an increase of 61.1 percent from $1.8 billion in the first quarter of 2005 to $2.9 billion in the first quarter of this year.

Four companies reported lower revenue for the quarter ended March 31, with GTSI Corp. experiencing the biggest drop. The reseller, which is struggling to remake itself as a services provider, saw revenue fall from $160.7 million in the first quarter of 2005 to $143.7 million in this year's first quarter, a 10.7 percent drop.

Companies also reported the capture of new contracts and the completion of acquisitions.

This roundup includes only results from companies that derive the bulk of their revenue from government IT contracting.

Three notable exceptions: Computer Sciences Corp. is scheduled to release its earnings later this month. BearingPoint Inc. is working on restating its 2005 results and won't release 2006 data until that is completed. Anteon International Corp. is expected to file its first-quarter earinings report with the Securities and Exchange Commission by May 10, when Washington Technology was going to print.

Highlights from the first quarter include:

» Accenture Ltd.

The Education Department awarded the company a three-year, $179 million contract extension to continue operating and maintaining the Office of Federal Student Aid's direct loan and Pell Grant origination and disbursement processing system.
»Anteon International Corp.

Stockholders approved the company's proposed acquisition by General Dynamics Corp. The deal likely will close by the end of June but is still undergoing an antitrust review by the Justice Department.

» BearingPoint Inc.

BearingPoint won a $69 million contract from California to implement a new payroll and personnel system. Working with SAP Public Services Inc., the company will replace the state's 30-year-old COBOL-based system. The new system will eliminate many paper forms and let state employees select benefits, check accrued leave and obtain online forms and documents.

» CACI International Inc.

CACI was one of 11 companies that won a spot to compete for task orders on the Army's nine-year, $20 billion IT Enterprise Solutions-2 Services contract program. The contract is for products and services, such as business process re-engineering, information systems security, network support and systems operations and maintenance. CACI also was one of seven companies that won a spot on the Army's multiple-award Strategic Services Sourcing program. The 10-year, $19.3 billion task-order contract has a total estimated ceiling of $19.3 billion.

» Computer Sciences Corp.

CSC won a five-year, $178 million contract for IT services for the John A. Volpe National Transportation Systems Center in Cambridge, Mass. The center is part of the Transportation Department's Research and Innovative Technology Administration. The contract agreement follows a $191 million contract awarded to CSC in August 2000 for IT support services at the Volpe Center.

» Dynamics Research Corp.

The Andover, Mass., company saw both its revenue and net income drop in the first quarter. The company blamed a delayed start on a new task order awarded earlier in the quarter, as well as other delays in contract awards, funding and slower than expected ramp-ups on new contracts.

» General Dynamics Corp.

The acquisition of FC Business Systems Inc. of Fairfax, Va., was completed Jan. 18. FC provides network support and management, software development and systems implementation and integration to the federal government. Terms of the deal, announced in December, were not disclosed. The company's acquisition of Anteon International is still undergoing an antitrust review by the Justice Department.

» GTSI Corp.

The reseller named James Leto as president and CEO, replacing Dendy Young, who remains as chairman. GTSI also laid off about 10 percent of its workforce as part of a realignment strategy to shift to selling more services rather than products.

» Harris Corp.

The company won a five-year, $600 million contract from the Census Bureau for its Field Data Collection Automation program. The company will integrate the multiple automated systems needed to obtain data from field census-takers during the 2010 Census.

» L-3 Communications Corp.

L-3 Communications Titan Group was one of six contractors selected in February for the Homeland Security Department's five-year, $350 million National Exercise Program. Under the contract, L-3's Titan Group will compete for work to offer a variety of terrorism, technological and natural disaster exercises for federal, state and local jurisdictions.

» Lockheed Martin Corp.

The IT unit in Seabrook, Md., won the FBI's six-year, $305 million Sentinel IT contract. Awarded under the National Institutes of Health's Chief Officers Solutions
and Partners II vehicle, the contract calls for an integrated system using off-the-shelf technologies to process, store and manage criminal investigation records that are in printed form.

» ManTech International Corp.

The company won $290 million in new contract awards during the first quarter of 2006, including a two-year, $114 million contract to provide support for Counter Radio-controlled Improvised Explosive Devices to the Army in southwest Asia.

» MTC Technologies Inc.

MTC is acquiring Aerospace Integration Corp., a Crestview, Fla., company that specializes in design and modification services for avionics, flight controls and weapon systems, and integrates upgraded systems and components into aircraft and ground-based vehicles.

» NCI Information Systems Inc.

The Reston, Va., company won a $25.3 million task order from the Army for IT support at Fort Lewis, Wash.

» Northrop Grumman Corp.

The company led a joint venture that won a five-year, $2.5 billion contract from the Energy Department to manage and operate the Nevada Test Site facility, the company's largest technical services-related award to date. Northrop Grumman Technical Services sector, formed in January, leads the joint venture, known as National Security Technologies LLC.

» Raytheon Co.

Raytheon finished its acquisition of Houston Associates Inc. of Arlington, Va., in January. The privately held company develops and operates mission-critical networks and network-centric command and control infrastructure applications and offers enterprise management services.
Terms of the deal were not disclosed.

» SI International Inc.

SI hit record financial results for its first quarter ended April 1. It said that its revenue growth resulted from new task orders, expansion on mission-critical IT and network contracts and projects added from its acquisition of Zen Technology Inc. at the end of February.

» SRA International Inc.

SRA won a place on DHS' National Exercise Program. The company also won a six-year, $108 million task order to provide the Navy Military Sealift Command with IT systems services that support its floating operations.

» Unisys Corp.

During the first quarter, the company suffered a net loss of $27.9 million as it continued to reposition itself for profitable revenue growth in 2007-08. At the end of March, Unisys laid off approximately 3,600 workers as part of its cost reduction plan

Staff Writer Roseanne Gerin can be reached at

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