How 25 Small Federal Contractors Beat the Odds

To say the odds are stacked against small businesses that target federal government with IT products and services is a major understatement. Standard challenges that plague all contractors--long sales cycles, procurement red tape--are magnified, and "fair competition" suddenly seems more like a page out of David vs. Goliath. So when small businesses manage to succeed despite this, they deserve accolades.

GovernmentVAR's inaugural list of leading minority solution providers highlights 25 small businesses from across the various set-aside categories: women-owned businesses, service-disabled veteran-owned businesses (SDVOBs), businesses located in designated historically underutilized business zones (HUBZones), and Small Disadvantaged Businesses (SDBs) or 8(a) companies. While they range in size and focus, each of these companies understands how to compete for a slice of the federal contracting pie and win. Each holds its own GSA contract (except Arlington, Va.-based By Light, which expects to be awarded one by midyear) and all tout references with both federal agencies and the megasystems integrators. In short, these are 25 small businesses that act like anything but. And that may very well be the secret to their success.

Slide Show: Meet 5 VARs Who Are Beating the Odds

1. Commercial Data Systems
Location: Honolulu, Hawaii
References: Army, Air Force, Departments of Agriculture, Health and Human Services (HHS), Transportation (DoT)
Categories: 8(a), HUBZone
Top exec: Mark Wong, President/CEO
Partners: Sun, IBM, Foundry Networks, Network Appliance, Oracle
Employees: 65
Year founded: 1986

CDS started out as a developer of Unix software. Now, two decades later, CDS is the largest computer-consulting firm in the state of Hawaii, has regional headquarters in Albuquerque, a satellite office in the Washington, D.C., area, and reported $60 million in revenue in 2005--roughly $1 million per employee. The company has long embraced the concept of complete solutions, from inception and design to procurement, installation, testing and employee training. Currently, CDS holds a basic ordering agreement (BOA) with the Army's White Sands Missile Range through June 2007.

2. Digital Consulting Services
Location: Newbury Park, Calif.
References: Air Force, Navy, Department of Commerce (DoC)
Category: 8(a) Top exec: Joel Oropesa, President/CEO
Partners: Cisco, HP, IBM, Sun Microsystems, Veritas
Employees: 43
Year founded: 1994

DCS promises what primes and customers want most of all: solutions that solve a problem, delivered on time and within budget. As a result, the systems integrator counts the biggest defense contractors among its references. Those include Lockheed Martin and Northrop Grumman, to name just a couple. The solution provider is listed on mega-procurement vehicles, including AFWay and the 8(a) Streamlined Technology Acquisition Resources for Services (STARS) contract. That success hasn't gone unnoticed. DCS was awarded the 2006 U.S. Small Business Administration Administrator's Award for Excellence, the 2004 Small Business Person of the Year from the Los Angeles District Office of the SBA to president and CEO Joel Oropesa, the 2005 Hispanic Business Top 100 Recognition Award and a range of awards from DiversityBusiness.com. In 2005, the solution provider ranked 469 on the VARBusiness 500 and earned the Fastest Growing Companies of the Year Recognition Award from VARBusiness in the same year.

NEXT: VAR on the fast track

3. Carrillo Business Technologies (CB Technologies)
Location: Westminster, Calif.
References: Air Force, NASA Categories: 8(a), Women-Owned
Top exec: Debra Turturo, President
Partner: HP
Employees: About 30
Year founded: 2001

It's not easy for any company to get noticed after only five years in government contracting, but CB Technologies has certainly done that--earning top ranks on DiversityBusiness.com's lists of Top Women-Owned Businesses, Top Hispanic American-Owned Businesses and Top Diversity-Owned Businesses, earning the Business of the Year Award from the Latin Business Association and ranking 320 on the VARBusiness 500. Young as it is, the company was built on experience. Turturo and CFO Kelly Ireland have 35 years of combined experience in the IT industry. The company philosophy is to "take ownership" to create personalized service and long-term partnerships.

4. EMW
Location: Herndon, Va.
References: Air Force, North Atlantic Treaty Organization (NATO)
Category: 8(a)
Top exec: Tony Bui, President
Partners: AT&T, Avaya, Cisco, Ericsson, Foundry, Microsoft, Net.com, Nokia, Nortel, Oracle, 3Com
Employees: N/A
Year founded: 1995

A look at the partner vendors that make up EMW's portfolio reveals one major area of focus for the solution provider, as does the procurement vehicles it participates in. The Air Force Network-Centric Solutions (NETCENTS) contract, for example, is the primary source of networking equipment and services for the Air Force, Department of Defense and other federal agencies. Of course, this showcases something else about EMW as well: The company isn't afraid to go after the mega-opportunities. The small business was awarded contracts under the Army CECOM Rapid Response, Installation Modernization II and Strategic Services Sourcing (S3) programs for lifecycle-management capabilities, to name a few. Beyond networking, EMW specializes in areas of planning, engineering and implementation, project and program management, systems integration, operations and maintenance, and training.

5. Pacific Crossing
Location: Irvine, Calif.
Reference: DoD
Categories: 8(a), Women-Owned, HUBZone
Top exec: Phyllis Johnson, CEO
Partners: ATG, BEA, EMC, HP, IBM, Microsoft, Oracle, PeopleSoft, SAP, Siebel, Sun Microsystems
Employees: 90
Year founded: 1994

As federal agencies start to warm up to the idea of outsourcing and managed services, Pacific Crossing stands poised to respond with expertise across most of the software companies' product lines to offer supplemental IT staffing and services, and help-desk support. The company was awarded a $1.6 million contract in 2005 with the Navy, touts past experience with leading defense contractors Northrop Grumman, SAIC and Raytheon, and earned kudos from DiversityBusiness.com as a Top Woman-owned Business in 2004. One of its more recent initiatives? Installing a communication system for the DoD at the Presidential Palace in Baghdad, a former residence of Saddam Hussein.

6. Thomas and Herbert Consulting (T&H)
Location: Silver Spring, Md.
References: GSA, Navy, departments of Homeland Security (DHS), Housing and Urban Development (HUD), Treasury
Categories: HUBZone, SDB
Top exec: Rodney Thomas, President/CEO
Partner: Microsoft
Employees: 55
Year founded: 1996

Proving that small businesses don't have to play second fiddle to the mega-contractors, T&H acts as a prime for a number of large federal-procurement vehicles, including the GSA Mission Oriented Business Integrated Services (MOBIS) program, the Navy SeaPort Enhanced (Seaport-e) program and the DHS blanket purchasing agreement for watch-list technical integration support. The company averaged 769 percent sales growth in the past three year, touts more than $60 million in contract dollars and maintains access to a line of credit exceeding $3 million. T&H also offers an Enterprise Architecture Center of Excellence (CoE), which acts as a best-practice "collaboratory" to facilitate and resolve platform issues and bridge the gap between business managers, enterprise architects and IT specialists.

NEXT: Answering the call for business intelligence

7. Thomas Exceptional Software Strategies
Location: Linthicum Heights, Md.
References: Department of Justice (DoJ), GSA, Navy, Smithsonian, FBI, DoE
Category: 8(a)
Top exec: Raymond C. Bowen, President
Partners: Adobe, Autonomy, BEA, Microsoft, Veritas
Employees: 114
Year founded: 1996

To Exceptional Software Strategies, success in government contracting comes from leaving a positive impression--and, subsequently, earning repeat business with customer agencies. With expertise in most of the leading software applications, Exceptional Software Strategies helps agencies streamline processes and comply with the Lines of Business requirements set forth by the Office of Management and Budget. From the Army, which awarded the solution provider a contract worth nearly $2 million for support of the Defense Acquisition Regulation System, to programs associated with the Defense Finance and Accounting Services, the Nuclear Regulatory Commission and the Naval Sea Systems Command (NAVSEA) Warfare Centers, Exceptional Software Strategies is driving consistent growth in revenue with its specialty in system development and integration.

8. Master Key Consulting
Location: Bethesda, Md.
References: Department of Education, HHS, DoJ, DHS
Categories: 8(a), Native American-Owned
Top exec: Jonathan Wilber, CEO
Partners: Microsoft, Oracle
Employees: 112
Year founded: 1996

Government agencies' need for data storage has made way for business intelligence, and Master Key Consulting is filling that need. The solution provider is currently providing the Department of Education technical and analytical support in policy analyses, statistical analyses and evaluations, and in March 2006 was awarded a contract under the MOBIS program. Another major success for the company in 2006 involved its own internal systems, enhancing the corporate infrastructure to better serve its customers and partners.

9. Lucille Maud
Location: Trenton, N.J.
References: Air Force, Navy, GSA, DHS, HHS, DoJ, departments of Interior and Agriculture
Category: 8(a)
Top exec: Louis Muirhead, President/CEO
Partners: Cisco, HP, IBM, Imation, Intel, Microsoft, Novell, 3Com, Verio, ViewSonic, Xerox
Employees: 19
Year founded: 1985

According to Lucille Maud, the secret to its success revolves around a consistently growing customer base, double-digit growth within each of its divisions and world-class customer service. While some may say that's easier said than done, Lucille Maud is pulling it off. The company's contract obligations grew from a modest $124,000 in 2000 to nearly $1 million in 2005. Offering computers and peripherals, as well as office products, furniture and supplies, Lucille Maud has diversified its offerings to accommodate the needs of its customer base.

10. Akimeka
Location: Honolulu, Hawaii
References: Army, Navy, Defense Information Systems Agency (DISA)
Categories: 8(a), Service-Disabled Veteran-Owned, Native American-owned, HUBZone
Top exec: Vaughn Vasconcellos, President/CEO
Partners: N/A
Employees: 85
Year founded: 1997

While most might say that it doesn't get much bigger than the Department of Defense in terms of customers, Akimeka's long-term goal is much more focused at home. Serving the needs of such agencies as the Joint Staff, Office of Naval Research and DISA with network, software and Web-driven solutions drives growth and expertise that the Hawaii-based company can use to promote increased IT innovation in its own community, as well as other regions in the Pacific. That consideration earned Akimeka a long list of awards in business leadership and entrepreneurship from both diversity organizations and as the federal government itself.

11. Melador Technologies
Location: Carson, Calif.
Reference: HUD
Categories: 8(a), Women-Owned
Top exec: Angela Walton, CEO/President
Partners: Cisco, IBM, Microsoft, Oracle, PeopleSoft, SAP
Employees: Less than 50
Year founded: 1996

As agencies try to improve processes and save costs, Melador offers programming and analysis, database administration, architecture and systems design, interface development and end-user training to help them get there. The key, according to the company, is to identify the mission-critical business needs of the individual customer and develop a full IT package that meets those needs. In other words, no two customers or customer requirements are alike. Melador uses what it calls a balanced scorecard to evaluate alternatives, presenting a "case-for-action" that identifies the benefits of a chosen solution. That solution goes beyond IT to consider schedules, budget constraints and planning.

NEXT: Proof of capability

12. P3I
Location: Hopkinton, Mass.
References: Air Force, Navy, DoT
Categories: 8(a), Women-Owned
Top exec: Janice Guy, President
Partners: N/A
Employees: 95
Year founded: 2000

Nothing proves capability more than a repeat customer, which P3I touts in the Air Force and the Navy, to name a few. That kind of proven track record led to a $5 million contract with the DoT, as well as some big money contracts, including the Information Technology Services Program (ITSP) II blanket-purchase agreement and the Navy Seaport-e vehicle for weapon-systems acquisition and lifecycle management. The company offers hardware and software IT support and Web development, as well as a range of services to ease the headache of procurement processes, including program management and systems-acquisition services, and test- and evaluation-earned value analysis.

13. Acolyst
Location: Fredericksburg, Va.
References: Navy, National Institutes of Health (NIH), Federal Aviation Administration (FAA)
Categories: 8(a), Women-Owned, HUBZone
Top exec: Ellie Nazemoff, President/CEO
Partners: Business Objects, CA, IBM, Lenovo, Novell, ViewSonic
Employees: 10
Year founded: 1989

Acolyst has had a very busy year. In addition to its participation in the NAVSEA Seaport-e contract and MOBIS Schedule contract as a prime, the integrator recently opened a solution center to help clients get up close and personal with emerging technologies--an innovative initiative for a channel company that targets the federal government. Beyond that, the company has earned accolades for its success in technical engineering, security and program/project management. In 2005, Acolyst was awarded for being the second-fastest growing solution-integration company nationwide by VARBusiness sister publication CRN, and in 2006, Nazemoff was recognized as one of the Top 50 Women Executives in the IT Channel by VARBusiness.

14 Networking Technologies and Support (NTS)
Location: Midlothian, Va.
Reference: DoD
Category: 8(a)
Top exec: Bernard Robinson
Partners: Cisco, HP, IBM, Microsoft, Symantec, Xerox
Employees: 76
Year founded: 1997

Currently, NTS provides the Defense Information Technology Contracting Organization with on-site, predictive, remedial and preventive computer-hardware maintenance services. The company is listed on the 8(a) STARS contract and supports federal sites in more than 15 states with customized solutions, technology-assets management, staff augmentation, performance analysis and training. Robinson touts 27 years of marketing and management with such vendors as IBM, CMS Automation and Xerox.

15 Wildflower International
Location: Santa Fe, N.M.
Reference: DoE, Department of the Interior
Categories: Women-Owned, HUBZone
Top exec: Kimberly DeCastro, President/CEO
Partners: Cisco, Dell, F5, Gateway, HP, MPC
Employees: 25
Year founded: 1991

Nothing is more top-of-mind to the government than security, which makes Wildflower International a solution provider more and more federal agencies want to get to know. The company provides synchronization of systems and personnel, infrastructure services and support, targeting security and scientific research communities. Wildflower has received New Mexico's Top 25 Women-Owned Businesses Award for seven years in a row, and in a recent Dun and Bradstreet Past Performance Evaluation, exceeded expectations in all of the areas reviewed: supplier performance, timeliness of delivery, responsiveness to problems, quality of purchased product, total cost, technical support, quantity of deliveries and attitude toward customers.

NEXT: Goverment veteran on the VAr payroll

16 Ideal System Solutions Inc. (ISSI)
Location: Osseo, Minn.
References: Air Force, Department of Agriculture
Categories: Women-Owned, 8(a), HUBZone
Top exec: Elise Hernandez, President
Partners: Cisco, Dell, Epson, HP, IBM, Juniper, Sun
Employees: 15
Year founded: 1996

In addition to offering the full spectrum of IT solutions, ISSI supports government agencies with procurement services typically associated with much larger systems integrators. Financing options, product leasing and rental, and trade and consignment are a few options available to enable flexibility in purchasing by federal customers. Similarly, the company's huge portfolio of products means more options to meet customer requirements, and the ability to respond to requests for proposals with competitively priced, cutting-edge solutions.

17 Global Technology Resources Inc. (GTRI)
Location: Denver, Colo.
References: Veterans Affairs (VA), NASA, Navy
Categories: 8(a), HUBZone
Top exec: Lance Vierra, CEO
Partners: Cisco, HP, Network Appliance, NetScout, Proxim
Employees: 22
Year founded: 1998

A huge victory for GTRI came in July 2006, when the VA awarded the solution provider a $39 million contract for Cisco SmartNet maintenance services. That came thanks to a proven record of network consulting, addressing everything from IT strategy planning and operating systems and directory services to storage systems and services, security, wireless, convergence and project management. The company reported annual sales growth of of up to 55 percent for the first five years in business, which, in turn, landed GTRI at No. 365 on the 2006 VARBusiness 500 and No. 38 on the VARBusiness list of fastest-growing resellers.

18 By Light
Location: Arlington, Va.
References: DoD, DHS, intelligence agencies
Category: SDVOB
Top exec: Bob Donahue, President
Partners: Cisco, Marconi, SafeNet
Employees: N/A
Year founded: 2002

If you ask federal agencies what qualities make for a good industry partner, many will tell you a government veteran on the payroll. By Light, for one, was founded by a group of retired senior military officials and telecommunications industry veterans, and the company perfectly leverages its knowledge of network design, integration and implementation. Currently, By Light is providing engineering, implementation, test and support services for the Global Information Grid Bandwidth Expansion (GIG-BE), the DoD's backbone optical network, and project management and IT services for the SCAMPI Optimization and Modernization project. In addition, the By Light Integration Center provides communications services to the DoD's Special Operations Community and DHS, as well as other federal and state government agencies.

19 Millennium Systems Services Inc. (MSSI)
Location: Huntsville, Ala.
References: Army, Air Force, U.S. National Guard
Categories: SDVOB, 8(a)
Top exec: Francis Gordon
Partners: N/A
Employees: 53
Year founded: 2001

It's hard to question the abilities of a company that reported triple-digit growth in revenue for three years in a row--reaching 348 percent in 2004 alone. Certainly, MSSI's wins keep rolling in. It's scheduled to wrap a five-year contract with the U.S. Army Space and Missile Defense Command later this year, and was awarded a $1.1 million contract with the Air Force for pro- fessional and communications services in 2005. Other customers include the Army Aviation and Missile Command (AMCOM), Integrated Material Management Center (IMMC) and the Army Materiel Systems Analysis Activity (AMSAA), to name a few.

NEXT: Beyond product peddling

20 Hoffman Technologies Inc. (HTI)
Location: Roseville, Calif.
References: GSA, VA
Category: SDVOB
Top exec: Gary Hoffman, President/CEO
Partners: Cisco, Compaq, HP, IBM, Sun
Employees: N/A
Year founded: 1997

HTI started to see real growth in the past few years, when president and CEO Hoffman made the choice to de-emphasize straight product peddling. The company's services department, originally formed in 1998 to support the equipment sold, was transformed, providing solution design, implementation and integration. The result? As other resellers struggled to meet the changing demands of agencies, Hoffman is experiencing growth and winning key contracts with a focus on network integration, disaster recovery and enterprisewide storage solutions. Most recently, HTI was named among the award recipients of the $5 billion, 10-year Veterans Technology Services GWAC contract for systems operations and maintenance, and information-systems engineering. The IDIQ contract was open only to businesses owned by service-disabled veterans.

21 Automated Systems Consulting
Location: Tampa, Fla.
References: Army, Navy, NASA, DoT, Department of Education
Categories: 8(a), HUBZone
Top exec: Rodia Numa, CEO
Partners: CA, Cisco, HP, IBM, Lexmark, NEC, Symantec, Sony, ViewSonic
Employees: N/A
Year founded: 1993

One key to mastering federal contracting--particularly as a small business--is through industry partnerships. ASC has managed to forge valuable alliances with heavyweight systems integrators, such as Lockheed Martin, CSC and SAIC, as well as dominant direct-marketer CDW Government. As a result, the company experienced more than 200 percent growth in 2006, providing procurement, professional IT and project-management services. ASC currently holds a basic ordering agreement for products and services with Schriever Air Force Base and a blanket purchasing agreement with the U.S. Patent and Trademark Office.

22 Blue Tech
Location: San Diego, Calif.
References: Navy, Corp of Engineers
Categories: 8(a), HUBZone, Women-Owned
Top exec: Susan Stone, CEO
Partners: APC, Check Point, Cisco, Dell, Fujitsu, Gateway, HP, IBM, Oracle, Panasonic, Sony, Sun, Toshiba
Employees: 30
Year founded: 1984

Easier than listing the vendors Blue Tech does partner with is listing those that it doesn't. The solution provider has a portfolio that would make a distributor green with envy. That said, the company does far more than peddle products; it maintains a perfect balance between leveraging its status as a small disadvantaged business and not relying solely on that to drive success and growth. The company takes advantage of set-aside opportunities, such as the Streamlined Technology Acquisition Resources for Services (STARS) GWAC, which provides the full range of IT solutions through 8(a) firms specifically, and GovWorks, an acquisition center intended to help set-aside companies to be more competitive. On the other hand, Blue Tech goes after the mega- opportunities and wins--serving as a prime contractor for the $8 billion, 10-year Seaport-e Navy GWAC and was awarded a piece of the Department of the Navy Enterprise Solutions (DoN ES) contract, which helps create network-centric, battle-management capabilities.

23 Ross Technologies (RTGX)
Location: Columbia, Md.
References: Securities and Exchange Commission (SEC), DoD, DHS
Categories: 8(a), Women-Owned
Top Exec: Kathlyn Adams, President/CEO
Partners: Business Objects, CA, IBM
Employees: 85
Year founded: 1997

RTGX focuses on a diverse set of skillsets that cover information security, auditing and analysis, e-government, network/systems integration, project-management and software engineering. That strategy--of being a one-stop shop for customers--has led the company to a significant number of contract wins, including the Program Management Support Services IDIQ with the SEC, the Encore Information Technology Solutions contract with the DoD and other federal agencies, and the DHS Eagle program as a subcontractor providing infrastructure engineering, services and support, operations and maintenance, and software development. In recognition of its many successes, RTGX was named among the nation's Top 500 Women-Owned businesses in the United States by DiversityBusiness.com.

NEXT: Time for philanthropy

24 USfalcon
Location: Morrisville, N.C.
References: DoD, DHS, GSA
Categories: SDVOB, 8(a)
Top exec: Peter von Jess, President/CEO
Partners: Cisco, Microsoft
Employees: 75
Year founded: 1999

From network installations to system- administration, hardware and software procurement to battle-command automation, USfalcon has the skillsets that are in high demand by the military. That's led to $2.5 million in prime-contract obligations for 2005 alone and a string of DoD awards, including the Army S3 contract. The solution provider also acts as a subcontractor on the Total Engineering and Integration Services (TEIS) II, Engineering, Technical and Operational Support Services (ETOSS), and Aviation and Missile Command (AMCOM) EXPRESS Army contracts; and the Commercial Enterprise Omnibus Support Services and Seaport-e Navy contracts.

25 1 Source Consulting
Location: Seabrook, Md.
References: DHS, SEC, DoE, DoC, DoJ
Category: 8(a)
Top exec: William Teel, CEO
Partners: Quest, Verizon
Employees: 52
Year founded: 1999

This VAR focuses on providing management and technical consulting for its federal customers. The company reported 60 percent growth annually for the past five years, growing prime contract obligations from $2 million in 2003 to $5.4 million in 2004 and $9.1 million in 2005. Recently awarded the 8(a) STARS GWAC, 1 Source is on tap to provide custom computer programming, computer-systems design and computer-facilities management. The company also supported DHS on a number of contracts, including one that involved a business process re-engineering solution for implementation of a management framework, and another to provide the full scope of IT support and services to the Department's Enterprise Solutions Office. The company even finds time for philanthropy, supporting recovery efforts in the Gulf Coast and local outreach.