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May 8, 2008
 
 
 

GOV’T CONTRACTORS
SEE ELECTION IMPACT


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For our first roundtable discussion of hot issues in the governmental contracts world, we lured federal IT bigwigs Stan Sloane, CEO of SRA; Shiv Krishnan, CEO of Indus; and Paul Leslie, President of Apptis to lunch at Tysons McCormick and Schmick’s.  We like to believe it was the conversation, but they might have come for the King Salmon or Ecuadorian Tilapia.

 

Paul (left), Shiv and Stan (right) are joined by our beloved sponsors: tenant rep guru Harry Klaff of commercial real estate giant Jones Lang and M&A expert Ed Schiff of law firm Sheppard Mullin.

Bisnow:

What effect if any will the election have on your businesses?

   
Stan: It certainly sets a kind of direction. There are other macro effects, though, that are probably far more influential from a business standpoint than the outcome of the presidential election, such as what happens in Congress, what happens with the war in Iraq and what happens with Iran.
   
Bisnow:

Suppose a Democratic Congress and President are elected—what will change?

   
Stan: I think you’ll see more of an emphasis on social spending, social programs, healthcare and probably a little less emphasis on defense.
   
Bisnow: How would that affect SRA?
   
Stan: Well, defense is a piece of our business. We all ride the tide of the overall defense spending trends. But we’re not a platform. We don’t build fighters and we don’t build tanks and ships. We tend to look where IT spending is going, command and control, those kinds of things, which I think are in reasonably good shape.
 

Stan took over as CEO at SRA just last year. The company provides $1.5 billion in  services to the government in the healthcare, defense, intel, and technology areas.

 
Bisnow:

Many perceive Maryland as the social services side of the region. Will it benefit more than NoVa in the case of a Democratic sweep?

   
Stan: Most of the people who provide those services are located in multiple locations, so you tend not to get too buffeted by that. 
   
Paul:

I think the companies impacted will be the big program type, because the funding for that might get held up until the election gets through and they determine what direction the new presidency is going in. Some of the big weapons systems, shipbuilding, you know, the Lockheed Martins, the Northrops. I think the impact is greater for them during an election year.

   
Shiv:

I’d agree. In 2005 we were primarily a federal civilian contractor without any defense work. And then I decided that we needed to get into DoD and intel because by not focusing on that we’re ignoring about 60% of the market. So we made two acquisitions in 2005. Today our mix is 60-65% federal civilian and 35-40% DoD and intel. 

 

Paul must be saying something powerful to divert Harry and  Shiv from eating.  He took over as Apptis president last November and oversees their $300 million IT services division.

 
Bisnow:

So you’ve tried to diversify and be prudent, but are you also taking steps based on your reading of the tea leaves?

   
Paul: No. I mean really what we’re doing is just good business strategy. You know, we’re focused on keeping a balanced portfolio of business going.
   
Bisnow:

So you are not a market timer?

   
Paul:

No. But we’re going to stay aggressive and look to acquire new capabilities and new customers for growth where it makes sense. Healthcare is a good example of a growing area. Look where all the trends are pointing to, with all of the baby boomers growing up and retiring and with the big bubble of funds moving there.

 

David Stegon is Bisnow's tech guru. He loves to hear compliments, complaints (not really), and story ideas, so call him with any of the above at 703-674-7718 or shoot an email to David@Bisnow.com

 

 

 
 
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