CACI makes good news in bad times

Company continues to win large contracts, expand its reach

The United States is experiencing one of its worst economic downturns in decades, but someone forgot to give the memo to CACI International Inc.

While many companies are laying off workers, CACI has hundreds of open requisitions, said Paul Cofoni, the company’s president and chief executive officer. CACI brought in $2.4 billion in fiscal 2008 revenue, 24.9 percent more than it made in fiscal 2007.

Some major contracts, totaling $2.9 billion, helped CACI’s bottom line last year. In December, the company announced that it had won a recompete of Genesis III, a prime contract with a $452 million ceiling, to continue supporting the Army Intelligence and Security Command’s ground- and air-based intelligence, surveillance and reconnaissance systems.

In May 2008, CACI won new work from the Defense Information Systems Agency when it landed a spot on the Encore II multiple-award contract, worth as much as $12 billion. The contract covers hardware, software, licenses and services for the Defense Department and other government agencies. “This was important to us because we didn’t have a seat on the previous vehicle, Encore I, so we actually won a position, and we’ve started winning task orders in 2009 against that,” Cofoni said.

The company also continues to benefit from four acquisitions it made in 2007, including Athena Innovative Solutions Inc. and Dragon Development Corp.Those successes earned CACI the No. 20 spot on this year’s Top 100 contractors list.

To maintain that momentum, CACI has identified two areas with growth potential, cyber defense and health information technology.

Cyber defense is “a natural extension of our security services offering, and it is a big problem for our nation as well,” Cofoni said. “It is in fact potentially the next battleground for terrorism.”

CACI has already begun establishing itself in health IT. “We have a good participation in federal IT health care that ranges all the way from IT systems that support [DOD] medical systems,” he said. “We are responsible for warehousing and supplying remote mobile hospitals that go into theaters of war.”

One of the company’s biggest challenges is having enough employees to meet customers’ demands, Cofoni said. “We have always got, it seems, 250 to 300 open [requisitions], and so getting enough people to meet the clients’ needs is a constant challenge — it’s a good challenge to have,” he said.

However, William Loomis, managing director at Stifel Nicolaus and Co. Inc. and a Washington Technology columnist, said CACI also has other concerns. Although the company met Stifel’s earnings estimates and beat its revenue estimates last year, “the contract awards were a bit lighter than we thought,” he said. In 2007, contract awards were up 38 percent, but in 2008, they were up 3 percent.

“From a federal standpoint, they already have a very strong contract portfolio, having won pretty much most of the major IT service and special service contract vehicles, so they’re in a great position” to improve, Loomis said.

As the Obama administration settles in and shakes up defense and contracting strategies, CACI will need to remain alert, he added.

“With the change in the administration, there’s obviously a lot of change going on, a lot of which we don’t know the specifics about,” Loomis said. “So, CACI, like others, are going to have to be flexible to changes. On the defense side, money’s going to get tougher, so being able to work with customers on allowing them to do more with the same or maybe even less through efficiency improvements, more innovative strategies.”

The company is ready, Cofoni said. “We are only in business to provide the best deals, the best value to the taxpayer, who’s the ultimate beneficiary of the work we do,” he said. “Better value means not just better price, but better results.”

More stats on CACI.

About the Author

Stephanie Kanowitz is a freelance writer based in northern Virginia.

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