ACS seeks higher profile

ACS hasn't been a well-known acronym in the federal technology market.

The Dallas-based company made its mark in corporate outsourcing, running data centers and managing back-office operations. But the mention of Affiliated Computer Services Inc. often draws blank looks from government officials.

At least that was the case 16 months ago, when Harvey Braswell came to Washington, D.C. As the newly appointed president of ACS Government Services Group, Braswell said he "spent a lot of time talking to a lot of people outside of the company." He found that ACS had virtually no name recognition in the area. "We were not on their radar here."

ACS jumped into the federal market in 1998, with its purchase of veteran contractor Computer Data Systems Inc. And in purchasing CDSI, ACS inherited two other acquisitions: Analytical Systems Engineering Corp. and Betac Corp. Braswell said his first goal was to "reorganize the business and go to market as 'One ACS.'"

The strategy appears to be working. The unified company catapulted into sixth place among federal information technology services contractors, according to data compiled by Eagle Eye Publishers Inc. The rise in ACS' profile has prompted other contractors to call the company about teaming arrangements, Braswell said.

ACS now offers federal and state health agencies a range of services, including systems integration, network design and help-desk services. But one particular emphasis is business process outsourcing, in which ACS assumes responsibility for entire back-office processes, not just the underlying technology.

"We're beginning to see quite a number of business process outsourcing opportunities on the federal side," Braswell said, adding that government customers are seeking best practices that have been honed in the commercial sector.

For ACS, the emphasis on outsourcing may be a case of offering the right service at the right time. Paul Murphy, president of Eagle Eye Publishers, cites outsourcing as one factor driving the growth of the federal IT services market. That sector has grown to $14.9 billion in fiscal 2001, from $11.1 billion in fiscal 2000, according to Murphy.

For example, ACS was awarded a contract last September to provide payroll-processing services for Defense Department retirees and annuitants. The Defense Finance and Accounting Service made the award, which could run up to 10 years with a total estimated value of more than $354 million.

ACS' work with the Education Department provides another example. ACS operates the Direct Loan Servicing System, which handles loan applications, payment collection and accounting/reconciliation for loans to college students. The contract was originally awarded to CDSI, but ACS last fall was granted a four-year extension.

Candace Hardesty, director of acquisition and contract performance in the Office of Student Financial Assistance Programs at Education, said ACS also operates the Pell Grant program, which offers financial aid to students with the greatest need. Hardesty said the Pell Grant system's reliability requirements are particularly strict, because funds disbursed to the students' schools must arrive on time. "If the money is not there, these kids don't attend class," she said.

Defense is another focus at ACS. Frank Cardile, president of ACS Defense Inc., said the company has a long-standing emphasis on command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR). The company has held DOD's Command Information Superiority Architectures (CISA) contract since 1985. The contract assists unified military commands with C4ISR planning.

Truman Parmele, DOD's program manager for CISA, said ACS and its military counterparts have built several hundred enterprise architectures over the years. Recent initiatives include the Pentagon's Global Information Grid, a blueprint for DOD's IT infrastructure.

ACS also pursues cybersecurity opportunities. Services include vulnerability assessments, incident response and cyber forensics, the discovery and analysis of evidence obtained from computer systems and networks. Cardile said the fastest-growing markets for cybersecurity are non-DOD agencies and the commercial sector. As for the latter, ACS' defense operation serves as a resource for the commercial side of the company.

Moving forward, ACS' government division has set its sights on bigger projects. "We're competing for larger deals than we ever had in the past," Braswell said. While contracts with annual revenue of $5 million to $10 million have been common, the company now targets deals with annual revenue in the $50 million to $100 million-plus range.

Braswell has assembled "mega-deal teams" to focus on specific agencies with growth potential in business process outsourcing. He said the company plans to bid on two or three large deals each year. In the meantime, the word is out on ACS, according to Braswell. "We're getting recognized now."