Health Care's Role Grows With Federal IT Suppliers

By Roseanne Gerin
Special to The Washington Post
Monday, May 15, 2006

Defense, intelligence and homeland security remain powerful growth engines for information technology contractors, but companies also are bulking up their health-care operations.

Work attracting their interest ranges from improving the efficiency of Medicare and Medicaid systems to sharing health records and using advanced technologies to spot and track emerging health threats.

That was one of the trends spotted by Washington Technology for its annual Top 100 report on federal contractors in information technology services. Compiled by Federal Sources Inc. of McLean, the magazine's list ranks companies according to their revenue from prime contracts.

Northrop Grumman Corp. of Los Angeles (No. 2 on the Top 100, after Lockheed Corp)., acquired Integic Corp., a Chantilly company that specializes in enterprise health and business process management in March 2005.

The deal helped Northrop Grumman win a share of the National Health Information Network contract, said James R. O'Neill, corporate vice president and president of Northrop Grumman IT. The company shares the $18.6 million contract with Computer Sciences Corp. (No.5), International Business Machines Corp. (No. 17) and Accenture Ltd. (No. 24).

The Health and Human Services Department contract will be used to develop prototypes for a nationwide health information network architecture that would let disparate systems exchange electronic health records.

In part to pursue health-care opportunities, Perot Systems Corp. of Plano, Tex., (ranked No. 44), spent most of last year centralizing its fragmented business development organization to go after bigger government business, said James C. Ballard, president of Perot Systems Government Services. To push into the market, Perot formed a team of sales people from its health-care and government practices, he said.

And Accenture of Hamilton, Bermuda, last spring bought Capgemini U.S.'s 600-person North American health-care practice for $175 million. The acquisition brought the number of Accenture professionals serving health and life sciences clients to more than 4,600.

Health care may be gaining momentum, but billions are already being spent in areas such as defense, intelligence and homeland security. The latter, in particular, remains a fast-growing market.

From fiscal 2005 to fiscal 2007, spending on information technology for homeland security is expected to show a compound annual growth rate of 19.6 percent, rising to $2.7 billion in 2007 from $1.9 billion in 2005, according to Federal Sources Inc's. most recent analysis of the government IT market.

Some companies also see more opportunities for outsourcing by government agencies as increasing numbers of federal employees retire and agencies face budget shortfalls.

"As more and more federal workers retire, we believe there will be a demand for more managed services," said Robert A. Coleman, president and chief operating officer of ManTech International Inc. (No. 21) of Fairfax.

For a full report on Washington Technology's Top 100 go tohttp://www.washingtontechnology.com.

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