Be fast, be nimble

Two decades marked by change but keys to success remain consistent

"The qualities associated with success in organizations have stayed remarkably constant; it's really speed and agility," said Linda Gooden, president of Lockheed Martin Corp.'s IT division.

Zaid Hamid

The Internet. Desktop computers. Open standards. Outsourcing. The global IT environment has changed dramatically over the last 20 years.

And yet the prerequisites for success in federal IT contracting have varied little since 1986.

"The qualities associated with success in organizations have stayed remarkably constant; it's really speed and agility," said Linda Gooden, president of Lockheed Martin Corp.'s IT division.

Companies must understand their customers' mission, deliver projects on-time and on-budget and be nimble enough to stay on top of the latest technology, business and government trends.

But in the future, it will take more of the same to succeed in the ever-changing IT contracting landscape. If the lessons of the last 20 years have taught us anything, it's that the role of IT has fundamentally transformed since Washington Technology published its first issue on April 3, 1986, and that it continues to evolve.

"Twenty years ago, IT was a necessity to some agencies and a novelty to others," said Jim Leto, president and CEO of GTSI Corp., Chantilly, Va. "Today it's the lifeblood of every agency ? it's what makes everything work. This whole industry has radically changed in the last 20 years."

Gone are the days when only a handful of high-level employees had computers ? with green screens and flashing white cursors ? that could perform a few simple tasks. Today, even entry-level government workers have robust computers with Internet connections.

The federal government will need to make better and more efficient use of the latest information technologies because American citizens are demanding it, said Renato DiPentima, CEO of SRA International Inc., Fairfax, Va. DiPentima joined SRA in 1997 after serving as deputy commissioner for systems at the Social Security Administration.

People "want their government to be smaller, but they want it to do more," he said. "The only way that can happen is to leverage IT, to make the people who are there more productive. The workloads aren't going away."

Technology is not the only element of the IT contracting equation in constant flux, so, too, is the way that government thinks about and buys IT.

In the 1980s, IT was used to automate paper processes and increase efficiencies in individual applications. In the 1990s, the federal government began looking to IT to link disparate systems into an enterprise and create a holistic view of an organization's systems, data and capabilities.
That, too, is already a dated model, Lockheed Martin's Gooden said.

New implementations must help a government customer meet its stated goals, not just provide a better or cheaper way to do something.

"Customers are looking for more than technology integration, they're looking for business solution aggregation; bringing together fully integrated concepts of operation and sound system architectures that optimize the business process to efficiently deliver a mission outcome," Gooden said.

The federal government spends roughly $60 billion annually on IT for unclassified agencies, Gooden estimated. Factor in the top-secret spending, and total IT spend goes up considerably, she said.

Founded in 1968, ManTech International Corp., Fairfax, Va., grew up in the intelligence and defense fields and has seen the thought processes of its customers evolve considerably over the last 20 years, said Bob Coleman, company president and chief operating officer.

"More and more government customers are looking at return on investment," Coleman said. "If you put this much money into an IT project, what is my return down the road? And which contractor can maximize my value?"

One key development that has helped the federal government to change its approach to IT contracting is the maturation of commercial software, industry officials said.

The acceptance of commercial products has enabled faster, cheaper and more standardized systems implementations, and also has led to far less code writing to customize a full solution. Today, programmers may write custom code to link multiple commercial products to perform as a single solution, ManTech's Coleman said.

Commercial products offer another inherent advantage, said Carl Salzano, vice president of government contracting for Booz Allen Hamilton Inc.

"More and more want to buy the package and not have a lot of customization so that when the next version of that package comes out, they can easily migrate to the latest technology," Salzano said.

Transformers

Moving to a new IT system once required wholesale technology changes. Now, government agencies want to move one function at a time while keeping the system operational.

Use of commercial or open-standard software makes such incremental implementations possible, said Austin Yerks, president of federal sector business development for Computer Sciences Corp. CSC has grown from $838 million in fiscal 1986 revenue to $1.2 billion in 1992 and hit $14.1 billion in fiscal 2005.

Another development in contracting over the last 20 years is the rise of managed services contracts to move operations from government hands to the private sector, industry officials said.

Outsourcing continues to be a tricky political proposition, but the business case of reduced costs, increased efficiencies and removing the burden of daily operations has gained support in federal government, industry officials said.

From 1990 to 2005, services as a percentage of overall federal acquisition rose from 37 percent to 47 percent, an upward trend that Lockheed Martin's Gooden said she expects will continue over the next five years as many federal IT workers retire. Lockheed Martin was formed 1995 with the merger of Lockheed Corp. and Martin Marietta Corp. Together they generated $22.9 billion in annual revenue. In 2005, revenue reached $37.2 billion.

In the 1980s and through much of the 1990s, government agencies relied on their own employees to operate and maintain complex IT systems. But as employees retire, or take higher-paying jobs in the private sector, government agencies have recognized that it costs less to outsource than to try and hire the staff to manage systems internally.

"As the business environment has evolved, there is a greater recognition that organizations should stick to their core competencies and hire specialist firms to fill the niches," Booz Allen's Salzano said.
As government evolves, so does the CIO's role, GTSI's Leto said.

Today's federal CIO is a business person managing a billion-dollar budget, and no longer a technologist managing in-house programmers writing custom code, Leto said.

A shift to services

As the IT contracting market increasingly shifts toward services, companies such as GTSI, which has a product reseller business, are changing to offer more services. The company simply cannot compete with prices the government can get on direct purchases from product manufacturers, Leto said.

Federal direct purchasing initiatives cost GTSI $70 million in business in fiscal 2005, Leto said. The company's total revenue for 2005 was $886 million, down from $1.1 billion in 2004. GTSI needs to be nimble and transform itself to deliver the services the government is looking for, Leto said.

Identifying where the business opportunities are and building capabilities to meet those needs is crucial to success, said SRA's DiPentima.

SRA had $134 million in fiscal 1995 revenue. But the company saw legislation in the 1990s that created an opening for governmentwide acquisition contracts run by the General Services Administration and worked to get on GSA schedules.

SRA in 1999 won the right to bid on task orders under GSA's 10-year, $25 billion Millennia contract, as well as several other large contracts. The company's growth then took off, shooting up from $250 million in fiscal 1999 revenue to $1.18 billion in fiscal 2006.

"The most important sign of success is to see that wave coming and get in front of it," DiPentima said.

Staff Writer Ethan Butterfield can be reached at ebutterfield@postnewsweektech.com.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Our databases track awards back to 2013. Read More

  • Navigating the trends and issues of 2016 Nick Wakeman

    In our latest WT Insider Report, we pull together our best advice, insights and reporting on the trends and issues that will shape the market in 2016 and beyond. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

I agree to this site's Privacy Policy.