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FCW : June 30, 2015
28 June 30, 2015 FCW.COM How the biggest contractors have adapted Acquisitions, reorganizations and investments are everywhere as key companies prepare for a return to growth in federal IT BY NICK WAKEMAN T he 2015 Washington Tech- nology Top 100 is populated with the largest government contractors in the market, and nearly all are running their businesses on two intertwined tracks. One track has companies position- ing themselves for future growth by making acquisitions, pursuing new markets, restructuring operations and investing in new technologies. At the same time, they are weathering a mar- ket that continues to contract. The total number of prime contracts measured by the Top 100 fell for the fourth straight year. That continued decline has not been totally unexpect- ed, and many executives are predicting a tight 2015 while looking forward to overall growth returning in 2016. The market peaked with the 2011 Top 100, when the aggregate prime contracts totaled $132 billion. For the 2015 Top 100, the aggregate is $98.5 billion — a 25 percent drop. The lack of growth mirrors what agencies are experiencing as they continue to face constrained budgets. After several consecutive years of belt tightening, government custom- ers remain focused on reducing costs, increasing efficiency and using new technologies as a way of boosting effectiveness. Many executives see that focus on cost, efficiency and effectiveness as a long-term shift in how government buyers view their relationship with con- tractors, which will continue even when overall spending starts to increase. Much of the repositioning companies have undertaken in the past year or so has been in response to that shift, and some of the moves have been dramatic. ACQUISITIONS AND SPLITS A leading example is the recent announcement by Computer Sciences Corp., No. 10 on this year’s list, that it 0630fcw_028-031.indd 28 6/10/15 9:05 AM
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July 15, 2015