Page 20 - FCW, June 2017

THE 2017 WASHINGTON TECHNOLOGY
TOP 100
What changes on the leaderboard suggest about the state of federal IT
BY NICK WAKEMAN
More than most years, the 2017 Washington Technol- ogy Top 100 shows how much change and disrup- tion are going on in the market.
The first and most obvious dif- ference is that after more than two decades at the top of WT’s rankings of the largest prime IT contractors in the federal market, Lockheed Martin has slipped a notch to No. 2.
The firm didn’t lose multiple large contracts; instead, it sold off the bulk of its Information Systems and Global Services business to Leidos, the new No. 1 with $6.89 billion in prime con- tracts in fiscal 2016.
But Lockheed Martin remains a very close second, with $6.87 billion in prime contracts. Its continued high ranking is a testament to the important role IT plays as an enabler.
When the company sold its IT ser- vices unit, it kept nearly all its cyber business and all other IT business that serves the federal market. So if an IT system delivers command and control data to the F-35 or a satellite platform, Lockheed Martin kept it. If a system delivers better health care data, it went to Leidos.
Adapting to a changing market
Moving down through the rankings, there are plenty of signs that funda- mental changes are happening in the market. Leading companies are adjust- ing to customer demands, emerging technologies, and a continuing tight and uncertain budget environment.
We see companies making acquisi- tions and divestitures. Partnerships with commercial technology vendors
have become more important, and many companies are using strategic hires to stake their place in a rapidly evolving market.
The cloud is reaching critical mass as the Federal Risk and Authorization Management Program and other efforts ease security concerns. Moreover, the cloud has become the tool agencies are using to modernize their infrastructure and adopt new ways of doing business. And many firms in the Top 100 are driv- ing that trend with offerings targeted to the cloud, agile development, mobile technology and DevOps.
These are positive signs for an indus- try that has weathered years of shrink- ing budgets and customers focused on low price above all else.
The rise and near-dominance of lowest price, technically acceptable (LPTA) contracting was one of the deciding factors in Lockheed Mar- tin’s divesture of its IT services divi- sion. Because so much of its business was focused on platforms, the com-
14 June 2017 FCW.COM