No. 11: CSC, Experience that counts

Commercial strength feeds CSC's government business

Computer Sciences Corp.

Top 100 revenue: $2.4 billion

78,000 Employees

2006 revenue: $14.6 billion

2006 net earnings: $634 million

2005 revenue: $14.1 billion

2005 net earnings: $810 million

"We've been working with these customers a very long time and understand their business well." Jim Sheaffer

Rick Steele

Computer Sciences Corp. is capitalizing on its global presence and its success in the commercial market to boost its business helping government agencies in areas such as health services and logistics, said Jim Sheaffer, president of the company's North American Public Sector division. That strategy was a success last year and will continue to benefit the company in the coming year, he said.
CSC's government prowess brings it to the No. 11 spot on the Top 100 list with $2.4 billion in prime government services revenue in fiscal 2006.

"Among our strong advantages in the marketplace is our ability to leverage our global and commercial expertise," Sheaffer said. "We're a little different from many of our competitors [in the government market] because the majority of CSC's business is commercial and a substantial portion is global."

"We're focusing on about a half-dozen high-growth market segments that we believe have the opportunity for increased growth" in the next three to five years, Sheaffer said. Those segments include health care, logistics and infrastructure services, all areas that can benefit from the company's commercial information technology expertise, he said.

In addition to organic growth, "we will continue to be looking for acquisitions that strengthen our capabilities, in particular in these areas we see as having high growth potential," Sheaffer said.

CSC's public-sector business employs more than 27,000 of the company's 78,000 employees and contributed $5.1 billion to corporate revenue in the fiscal year that ended in March, Sheaffer said.

In the past year, CSC continued to see "some trends that have been apparent for a while," Sheaffer said, adding that those trends point to increased demand for services in the health care, logistics and homeland security sectors.

Demographic changes and budgetary pressures pose challenges for government agencies while presenting opportunities for CSC, Sheaffer said.

"We've seen the clear continuation of the impact of an aging workforce in the federal government," he said. A spate of retirements among experienced workers is forcing agencies to adjust, and CSC can help them help manage the shift, he said. That's one area in which the company is using its commercial expertise to its advantage in the federal market, he said.

CSC's status as a global company is another strength, Sheaffer said. For instance, the company is involved in a project to develop an integrated information system for the National Health Service in the United Kingdom.

CSC is one of four companies working on a prototype health data-management system
for the U.S. Health and Human Services Department.

"We believe the technologies around information are really an area that will continue to be very significant in the future," Sheaffer said. "It's the technologies that will contribute to faster, secure, accurate transmission of health information."

Long-term contracts also helped CSC in the past year, Sheaffer added. An ongoing logistics modernization contract with the Army has come into its own, reducing supply-chain costs and "delivering clear business value to the Army," he said. "It's the largest implementation of SAP supply-chain software in the world. It's a difficult project but one that is now viewed as a success." That success helped CSC land a similar contract with the Air Force, he said.

Sheaffer said he sees an increasing trend toward task-order contracts. "CSC is the leading user of governmentwide contracts, so we have a very effective organization" that can win additional orders on top of a basic contract, he said.
CSC has a significant presence in the federal market, Sheaffer added.

"There's no sizable agency in the government with whom we don't have business today," he said. "We've been working with these customers a very long time and understand their business well."

CSC recently announced that its federal sector business unit had signed 62 new contracts in the fourth fiscal quarter with a potential value of $1.3 billion. Defense Department agencies accounted for 34 of the contracts, which the company said cover a range of IT services, from analysis and systems integration to maintenance and logistics support.

In all, "we believe it was a very good year for us," Sheaffer said. "We are well-positioned. We have a very broad footprint in the government market. We understand the mission of almost every agency of the government."

Profiles of the Top 20 companies in the 2007 Top 100

No. 1: Lockheed Martin's reinvention

No. 2: With SBInet, Boeing IDS takes flight

No. 3: Northrop Grumman rises to new challenges

No. 4: KBR gets down to business

No. 5: IPO catapults SAIC into a new era

No. 6: Raytheon strives for balance

No. 7: General Dynamics in full sprint

No. 8: Fluor's ready in a pinch

No. 9: L-3 leadership stays the course

No. 10 EDS, Hard-learned lesson

No. 11 CSC, Experience that counts

No. 12: Battelle seeks new frontiers

No. 13: Booz Allen, Quality over quantity

No. 14: Bechtel telecom makes a splash

No. 15: For BAE, persistence pays off

No. 16: ITT makes a push into new markets

No. 17: Dell, Talking about evolution

No. 18: Technology and service fuel IBM

No. 19: Verizon caps off a busy year with a big win

No. 20: United Technologies gains altitude

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