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Intelligence Work Comes to CACI Via Acquisitions


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A string of later purchases, including those of N.E.T. Federal Inc. of Vienna (a subsidiary of Network Equipment Technologies Inc.), Acton Burnell Inc. of Alexandria and the government solutions division of Baltimore-based Condor Technology Solutions Inc., added employees with security clearances to CACI's payroll and expanded its offerings.

In March 2003, CACI bought Applied Technology Solutions Inc., a McLean company focused on the intelligence community, and last July it acquired Premier Technology Group Inc., a Fairfax firm that specialized in intelligence analysis services.

The company also began in the late 1990s to fill its executive offices with seasoned insiders. CACI named Gail E. Phipps, a National Security Agency veteran who worked in the intelligence divisions of Computer Sciences Corp. and TRW Inc., as an executive vice president in June 1999. The following month, Anthony J. Tether, a former director of the strategic technology office of the Defense Advanced Research Planning Agency and director of national intelligence for the Office of the Secretary of Defense, was named CACI's senior technology adviser and charged with guiding the company's growth.

By August of that year CACI had recruited L. Kenneth Johnson, a West Point graduate with two decades of defense contracting experience, to be its new president and soon issued a statement declaring that it had the management team in place to execute its ambitious growth strategy.

The company also began to recruit veterans of intelligence world to its boardroom. Richard L. Armitage was elected a director in 1999 but stepped down in 2001 when he was appointed deputy secretary of state. Over the past five years the company's board has included Barbara A. McNamara, former deputy director of the NSA; Arthur L. Money, former assistant secretary of defense for command, control, communications and intelligence; and former Air Force Gen. Larry D. Welch, a fellow at the Institute for Defense Analysis.

Such board members often act as liaisons between industry and government, said Elizabeth Bancroft, acting executive director of the Association of Former Intelligence Officers.

"The assumption is that they can make introductions, that they are arriving with a certain amount of built-in knowledge on projects that are going to be coming in the future," Bancroft said.

CACI's strategy paid off. In December 2000, it won a contract worth as much as $500 million to help modernize the Army intelligence systems. Last September, it won a $154.7 million contract to provide information technology support to the Army Intelligence and Security Command.

And the purchase of Premier Technology gave CACI one of its most high-profile intelligence deals: a large umbrella contract for information technology services. The military asked CACI to use that contract to supply interrogators, which CACI did, employing among others Steven A. Stefanowicz, who was implicated in an Army report on prisoner abuse at the U.S.-run prison near Baghdad. Stefanowicz , who has denied wrongdoing, is under investigation by the government. The General Services Administration also investigated to determine whether CACI should be banned from future government work, but decided that a ban is not warranted.

Despite the scrutiny resulting from intelligence work, London said he has no plans to change the company's strategy. In May it completed a $550 million acquisition of American Management Systems Inc.'s defense and intelligence group.

"I'm still enthusiastic about how well CACI has been able to respond in the intelligence community market and the defense and homeland security arenas," London said. "It seems to me there are a lot of challenges out there and it's a market that we feel we're very attuned to."

Ellen McCarthy writes about the local tech scene every other Thursday. Her e-mail address is

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