All on the Same Team

Prime Contractors Pick Partners Carefully for Big Government Deals

None of the giants wanted Ericsson Inc. on its team.

Executives from the Swedish cellphone maker called on four of America's largest government contractors last year, offering to help them win a $2 billion Homeland Security deal to use technology to help secure the nation's borders. They found no takers.

All the giants, in contrast, wanted Computer Sciences Corp. on the teams they were assembling to compete for the government's Secure Border Initiative, or SBInet. The California company, which has more than 10,000 Washington area employees and specializes in government technology, had its choice of working with Lockheed Martin Corp., Boeing Co., Northrop Grumman Corp. and Raytheon Co.

But as the complex negotiations dragged on, with proposals and counterproposals circulating among companies that compete until the day they need each other, Ericsson and Computer Sciences did something unexpected: They turned their backs on Lockheed and the others, and decided to form their own group. Ericsson took the lead, on a hunch that its experience policing the Finland-Russia border with video cameras and wireless communications would prove enticing, while Computer Sciences chose to back an idea whose simplicity could prevail over more exotic proposals.

The two companies had become comfortable with each other, establishing an easy rapport in meetings at Computer Sciences' operational headquarters in Falls Church and at Ericsson's offices in the District. Computer Sciences had even sent some of its Europe-based staff to examine Ericsson's border operation. They were impressed, and in the end, both sides said the decision to team up was a no-brainer.

"We had a choice among four very big defense contractors that we work with all the time and that have all the components to design and build a system," said Ben Gianni, Computer Sciences' vice president for homeland security. "Instead, we chose to work with a company that already has a system in place. You might say it's a dark horse. But we think it's a winner."

"We were courting each other," said Douglas C. Smith, an Ericsson vice president. "Now it's like a marriage."

In the world of government contracting, this is the competition before the competition: the extensive romancing, cajoling, scrutinizing, rejecting, jockeying and posturing that goes into putting together a team to bid on a major contract. As in love, it's a process that creates some unusual pairings.

In the commercial world, Coke and Pepsi would rarely, if ever, join forces. McDonald's and Burger King try to steal market share from each other, not collaborate on recipes.

It was no stretch, though, for defense contractor Raytheon to analyze how much of the Secure Border work it could do itself, then hire companies such as BAE Systems Inc., Bechtel Corp. and International Business Machines Corp. -- competitors on other defense contracts -- to do the rest. Teams have become essential even for the largest and most accomplished defense and technology companies, as government contracts have become more complex and agencies have begun lumping more work together to cut down on procurement costs.

"The first phone calls are quite comical," said Frank Marcinkus, who puts teams together for Massachusetts-based Raytheon. Mindful that would-be partners can soon become competitors, neither side wants to reveal too much, so the conversations start off stilted.

"Then you have to go to the inevitable dinner. The point of that is: I want to look you in the eye. I want to feel your handshake and find out how committed you are to this," he said. "You're going to be calling this person at 2 a.m. on the day of his daughter's graduation and saying, 'I need your help.' You don't just do that with anyone. It becomes very personal."