Now, less than two months into the integration of Anteon, General Dynamics appears to have a tier-one government services operation to its name, with the ability to compete against top federal integrators such as Lockheed Martin, Northrop Grumman, SAIC and CSC. The company has combined Anteon and its roughly 9,500 employees with the legacy General Dynamics Network Solutions to form a new 16,000-employee operating group, General Dynamics Information Technology, headquartered in Fairfax, Virginia.
Computer Business Review spoke with Dan Johnson, executive vice president of this new group, about the integration of Anteon and its strategy for the federal market. He said Anteon brings a different set up capabilities and federal experience than what General Dynamics had with its Network Solutions group. Johnson said General Dynamics’ service strengths were primarily in network projects, telecommunication, and IT infrastructure. The company works on lots of large programs, such as the networking for the Pentagon renovation.
A decent portion, approximately 30%, of General Dynamics Information Technology’s business is for clients other than the Pentagon, Johnson said. About half of this non-defense work is for civilian agencies, and the other half is for the company’s commercial clients. Commercially, General Dynamics focuses on wireless and large-scale infrastructure work, areas in which it can leverage some of its horizontal capabilities from the defense sector.
Anteon is similarly versed in the defense services market, with 90% of its expected $1.7bn in revenue last year coming from defense, intelligence and homeland security agencies. It does a little of the networking that General Dynamics specializes in, but the company is focused primarily on mission-critical systems, including weapons systems, logistical support for defense projects, and actual mission support for agencies and defense programs, Johnson said. So while Anteon had its eyes on the larger federal deals, it didn’t have the scale for the big engagements; their expertise lay in smaller, multiple delivery orders, many in the $5m-to-$15m range, for its clients. The merger now gives General Dynamics a good entry point into these types of defense orders, as well as some cross-selling opportunities.
Competitively, Johnson said there’s a mostly level playing field among the top defense contractors in terms of services capabilities and expertise. One area in which General Dynamics lacks capabilities and mostly shies away from is the major ERP implementation market, Johnson said. Fellow defense giants Lockheed and Northrop, which, like General Dynamics, are probably best known for their weapons business, mostly sit these deals out too, Johnson said. Instead, firms such as CSC, IBM, and Accenture, which all have plenty of large-scale integration experience from their commercial businesses, tend to receive the major federal awards for big enterprise projects such as financial and HR system installs.
But Johnson noted that there’s still plenty of systems modernization work that General Dynamics can compete for, including infrastructure services, networking, and now, with the Anteon merger, some of the mission support components of these systems projects.
Overall, the federal services market keeps chugging along steadily, especially for the large amount of General Dynamics’ work in the operations and maintenance phase of the US current military campaigns, Johnson said. He explained that these sorts of programs are a priority in the budget, and that despite the headaches of the late passage of both the last budget and the last emergency spending bill for the military, the bulk of this work won’t disappear anytime soon.
In addition, the Department of Homeland Security recently selected General Dynamics, along with every other major systems integrator on the market, to compete for work under its Eagle acquisition program for IT services, which covers about $6bn of future contract awards, or 75% of the department’s total IT budget.
Another development in the federal market that Anteon has cashed in on is the Homeland Security Presidential Directive 12, which was signed in 2004 and requires all civilian agencies to implement both physical and cyber security systems for their employees by October of this year. Credential card systems was one of the many attractions of Anteon’s portfolio, Johnson said. The company also brings a strong simulation and training offering, both in terms of the necessary IT components and functional subject expertise for different programs, he added.
Looking further ahead, Johnson mentioned the upcoming round of military base closures and realignments over the next few years. The infrastructure component of realignment suits General Dynamics’ legacy capabilities, and the workforce augmentation involved in moving an activity or program from one base to another (since all relevant military personnel don’t always move with their program) is a good opportunity for Anteon’s mission-based services, Johnson said.
