Boom Times For Federal Contractors

The government "needs someone to come in and tell them how to do the job, how to solve the problem," Bjorklund said. "If you've got a great solution, that's one thing. But if you've just got a great technology, it may be hard for you to get any traction."

The largest defense contractors, meanwhile, are facing their own problems, with legacy weapons programs threatened by cuts in deference to futuristic communications devices or immediate demands for bullets and bombs in Iraq.

For instance, Lockheed Martin Corp. and Boeing Co. said last week that they would merge their struggling rocket businesses, a recognition that with ebbing demand, neither business could be profitable on its own.

Bethesda-based Lockheed, one of the government's largest suppliers of IT, still managed to record a 27 percent profit increase for the quarter. Boeing's quarterly profits were dragged down by its commercial airline business, but its defense earnings remained robust.

The companies doing the best, Bjorklund said, are the ones that can meld technology with high-end human services and have employees with the clearances to perform sensitive jobs in defense and intelligence.

San Diego-based Titan Corp., which has about 2,500 employees in the Washington area, logged more growth in intelligence work last quarter than in any other area, according to chief executive Gene W. Ray. The company's revenue hit $559 million, a record for the first quarter and a 23 percent increase over last year, when the company struggled during a failed merger with Lockheed. Profit was $19 million, also up sharply from last year.

Ray said he expected the growth to continue.

"We're seeing a lot of opportunities," he said. "We're expecting May to be the busiest month we've seen in the history of Titan in terms of writing new proposals."

Last year, Titan pursued 18 contracts valued at $100 million or more. This month alone, Ray said, the company plans to go after nine.

The company is also getting considerably more work from Homeland Security, a department that had been considered a disappointment to some in the industry in its first couple of years.

"The department spent the first part of its life really figuring out how to manage the operation and what kind of needs they have," said SI's Oleson. "Those needs are now starting to be accounted for."