No. 13: Booz Allen, Quality over quantity

To counter scrutiny, Booz Allen puts ethics first

Booz Allen Hamilton Inc.

Top 100 revenue: $2 billion

19,000 Employees

2006 revenue: $4 billion

2005 revenue: $3.6 billion

Booz Allen is a privately held company and does not report net earnings.

"Whenever the competition is based on a best value judgment we tend to do very well." Marc Gerencser

Rick Steele

Contractors prefer not to be called to Capitol Hill to answer questions about their business ethics. For Booz Allen Hamilton Inc., nearing its 100th birthday, a reputation for honesty is crucial.

As managing director of global government markets at Booz Allen, Marc Gerencser meets frequently with senior officers. In one such meeting, he recalled how a senior officer at the Army Materiel Command spoke favorably of the company.

"When I met with [him], one of the things that he emphasized was not just our service but that we adhere to our core values so strongly," said Gerencser, adding that, "having a strong ethics program has been a big plus for us."

The privately held company ranks No. 13 on Washington Technology's Top 100 list with $2 billion in prime contracting revenue.

So, earlier this year, when House Oversight and Government Reform Committee Chairman Rep. Henry Waxman (D-Calif.) questioned the firm's role in the Homeland Security Department's high-profile SBInet project, it could have been a blow to Booz Allen's reputation. Waxman suggested the company might have a conflict of interest working on that project because of its role as a subcontractor to Boeing on other projects. Boeing is the prime contractor on SBInet.

Gerencser, however, said the scrutiny will not hurt the company's good standing. "We follow all of the guidelines around ethics," he said. "In all of the actions we do, we can stand any test of scrutiny."

The company won't have much time to worry about congressional attention, however, considering how much new and existing government work it has on its plate.

Booz Allen ranked No. 4 among companies with GSA schedule sales in fiscal 2006, said Ray Bjorklund, senior vice president and chief knowledge officer at FedSources Inc., which compiles the Top 100 list. "That's impressive for a services firm," he said.

"I believe Booz Allen has mastered many of the contract vehicles, enabling customers to be able to hire [the company] quickly and efficiently," Bjorklund said.

This strong competitive drive is one of the company's hallmarks, Gerencser said. "Whenever the competition is based on a best-value judgment we tend to do very well," he said.

The company continued its task-order winning streak this year when it was selected in March by the Agency for International Development as one of nine prime contractors for the Global Business, Trade and Investment II contract. Under GBTI II, Booz Allen will compete with the other prime contractors for as much as $3 billion worth of tasks to assist the agency with putting in place strategies for economic growth and institutional reform in qualified countries.

That award followed on the heels of another key win announced in January. The company was one of six prime contractors selected to compete for tasks through the Defense Information Systems Agency's Encore II contract, which has a $12.2 billion ceiling. The 10-year contracting vehicle is designed to enable the agency to receive technical and consulting support for its Net-Centric Enterprise Services initiative.

Booz Allen is privately held, which allows it to consider long-range investments that companies beholden to shareholders might not be able to make, Gerencser said. With private ownership, the company can make investment decisions that pay off farther down the road than some of its competitors.

"As a managing director, I can put investments in place that may provide a return in four or five or six years," Gerencser said, adding that, "we can often place long-term and even risky bets."

Meanwhile, the company is positioning itself for key changes in the government market as the military services and civilian agencies struggle to do more with less during the next several years, Gerencser said.

On the defense and intelligence fronts, these changes are driven by the Iraq war, the need to modernize the country's military forces, and ongoing improvements to global intelligence and security capabilities.

"We have excelled in private industry in reducing overhead cost and capital for a lot of private enterprises," Gerencser said.

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

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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