As the government services market reshapes, Kenneth Asbury, chief executive of CACI International, said he is reforming the contractor to match. Asbury took over in February from Daniel D. Allen, who had only held the job briefly. Company officials said they wanted a greater focus on business development in a more competitive market.
For Asbury, that’s meant refocusing CACI not just on how many contracts it wins, but the size and scale of those contracts. “We’ve always been good at winning,” Asbury said from a penthouse conference room in the company’s Arlington headquarters. “Now, we’re winning larger deals.”
Asbury has made business development a key focus of his first year, including two new hires: Donald Fulop, a former Lockheed Martin executive, and Suzan F. Zimmerman, who previously worked at Qinetiq North America and Science Applications International Corp.
He also roped CACI’s largest acquisition to date in Six3 Systems, an intelligence contractor. For a price of $820 million, CACI has gained about 1,600 new employees and an estimated $470 million in 2013 revenue. CACI, founded in 1963, has grown over the years through 57 acquisitions.
In the coming year, Asbury said CACI will still be looking out for acquisitions but, unlike some companies, won’t be moving into different sectors. As other contractors consider commercial or international work to cope with shrinking government budgets, Asbury said he’s convinced there’s enough money in CACI’s core markets.
In Iraq and Afghanistan, for instance, the contractor has provided intelligence and reconnaissance services.
That need is much reduced, Asbury acknowledged, but CACI won’t “abandon those markets,” he said. Instead, it’s looking to other parts of the world, such as Africa, where these services might be needed.
“It’s a smaller budget, but not that much smaller,” he said of government spending.
Still, Asbury said the company is acting aggressively to cut its costs. Additionally, CACI is pursuing what Asbury described as campaigns, or a targeted group of large contracts that CACI wants to win to help it raise its profile and act as something of an “insurance policy” if it loses some smaller programs.
“We want to go after larger jobs,” said Asbury, who added that he’s told his staff that contracts within this effort should be worth at least $1 billion. He said the first result of this iniative should come to fruition in 2014.
And while the shutdown proved disruptive in the early months of Asbury’s tenure, he said the company managed to avoid furloughing anyone.
George A. Price Jr., senior equity research analyst for aerospace, defense and government services at BB&T Capital Markets, said it’s too soon to evaluate how well Asbury’s strategy is working.
“With the government shutdown and the uncertainty … it’s kind of early to expect that you’re going to see some dramatic results,” he said. “Certainly, I would expect in 2014, they’d want to be able to point to some solid progress and tangible results.” Story By: www.washingtonpost.com
At least one in every six dollars of U.S. spending for contracts and grants in Iraq and Afghanistan over the past decade, or more than $30 billion, has been wasted. And at least that much could again turn into waste if the host governments are unable or unwilling to sustain U.S.-funded projects after our involvement ends.
