CSC's winning summer
By Margret Johnston
Officials at the federal business unit of Computer Sciences Corp. might someday look back at June 1998 and realize it was a pivotal month in the organization's evolution in the new government procurement environment.
CSC landed several contracts during the month, including the Outsourcing Desktop Initiative for NASA (ODIN), the Immigration and Naturalization Service's Service Technology Alliance Resources (Stars) program and a U.S. Agency for International Development contract.
The contracts should help boost CSC's federal division revenue in the coming quarters, following a 10 percent increase for the first quarter of fiscal 1999. The unit posted $443.5 million in revenue in the April through May period, up from $403.6 million in the same period last year.
Contracts landed in the quarter totaled about $2.8 billion, including the "impressive federal contract wins we achieved during the month of June," said Pat Ways, senior vice president of business development for the civilian group. "As we look forward, our pipeline of federal opportunities continues to be robust at approximately $14 billion over the next 32 months."
The June contract awards follow a major reorganization of the Falls Church, Va.-based federal division of CSC, which generated about 25 percent of the company's overall revenue of $6.6 billion in the last fiscal year.
The reorganization, which went into effect June 1, is a simple concept aimed at eliminating competition among the four operating units of the previous structure, said Milt Cooper, president of CSC's federal division.
The business is now split into defense and civilian groups. Before the reorganization, CSC's strengths were "diffused" among the four organizations and were not focused sharply on the customer as they could have been, Cooper said
"Our reorganization was principally designed to make sure that we do focus all of our capabilities in a very structured way to our clients' needs," Cooper said in an interview before the official launch of the reorganization.
Dan Young, chief executive officer of Federal Data Corp., which has worked with CSC on several projects, said dividing the business along defense and civilian lines was a smart move.
"Milt Cooper was struggling with finding the best way to focus on the new market environment we are in," Young said. "Everyone is struggling for the best configuration in order to focus on [their] customers."
The reorganization also enabled CSC to bring in some talented people, such as Austin Yerks, Ways' counterpart who heads up the defense group, Young added. Yerks is a former executive at Litton/PRC Inc. who joined CSC earlier this year.
A key change was the conversion of the business development sector from a centralized unit into a component of each of group that is much closer to operations, Ways said. "Although all of business development reports to me, [the business development managers] are co-aligned and co-located with the vice presidents [of each vertical operation] and measured and compensated for based on their success in the operation."
Another change split the civilian group into five vertical operations that reflect different functions of the government, Ways said.
The citizens services operation, for example, is responsible for business with the Social Security Administration, the Department of Veterans Affairs and other similar organizations that serve the public. The government enterprise services operation handles agencies such as the Commerce and Treasury departments. The other three vertical operations are split among transportation, the environment and NASA, Ways said.
A third accomplishment of the restructuring, Ways said, was establishing horizontal operations within each of the two pillar groups. Outsourcing and telecommunications are horizontal operations within the civilian group, and on the defense side, logistics operations reach across the group. Except for the award of the USAID contract, Ways said the contracts CSC won in June cannot be attributed directly to the reorganization because most of the work on bidding them was accomplished under the old structure.
The restructuring also did not figure in the pursuit of a contract under the General Services Administration's Seat Management program, which CSC did not win despite having more depth and experience on outsourcing jobs than most of the companies that were chosen, the company said.
Cooper highlighted that advantage, saying CSC would "encourage the [Defense Department] and the rest of the federal government to avail themselves of the enormous benefits of the private sector doing billions of dollars' worth [of business] and basically trusting noncore functions to people who are experts in those noncore functions."
But on Seat Management, CSC failed to get the nod. At this time, CSC does not plan to protest the Seat Management award and will try to make up for losing it by driving business on ODIN.
"The issue is to get the customer to run the competition under ODIN instead of [under] Seat Management," Cooper said.
CSC already is working on two task orders that have come out on ODIN, and there will be more before the end of the year, he said, adding that he feels confident CSC's federal division will meet its goal of high single-digit growth in the current fiscal year.