A Jan. 28 Business section article incorrectly said that the Small Business Administration awarded $314 billion in contracts in 2005. That amount was for the whole government.
Tech Virtuoso Hopes To Replicate Success
Monday, January 28, 2008
The tech world was a different place when W. Scott Amey ventured into it 16 years ago, co-founding a company that went on to become the largest minority-owned firm in the Washington region.
By the time he sold his interest in RS Information Systems in 2004 and stepped down as its chief operating officer, its work had grown from a single $5,000 GSA award to more than 100 prime defense contracts.
Amey knew he wanted to get back into the federal services world, in part because of the government's goal of directing 23 percent of all contracting dollars to small businesses. Amey began looking for a company that could fit into that niche. Last week his search culminated with his purchase for undisclosed amount of Amyx, an Alexandria provider of program management, logistics and other defense agency services.
As he shopped around, Amey found companies eligible to compete for small-business set-asides, but which were losing money or whose customers weren't happy with the work. He found others that provided a fractured array of services to a disparate group of customers.
"I wanted a company whose customers were delighted, a well-run company with happy employees and I could just get in and get to growing," Amey said. "I wanted to get back in the saddle, this time as the chief executive officer."
He said he found that with Amyx, which won its first contract in 2000. With annual revenue of about $9.6 million and 50 employees, Amyx can grow by competing for jobs that are too small for large defense contractors, he said. As long as the firm does not exceed $23 million in annual revenue averaged over three years, it can qualify as a small business.
At RSIS, which he founded with former colleague Rodney P. Hunt, the company grew as a priority federal contractor. It graduated from a government program for minority, women and disadvantaged businesses, and outgrew its small-business designation. RSIS blossomed into a company generating more than $300 million in annual revenue and competing with much larger firms for federal work. In December, Hunt sold RSIS to Wyle, a California aerospace engineering company, a deal that closed this month.
Amey said he sees an opportunity to build up Amyx by competing for small-business contracts, in part because new reporting requirements will preclude many awards from being counted toward agencies' small-business contracting goals. Under a new rule that went into effect last year, small businesses that are acquired by larger corporations must inform federal agencies that they no longer meet the small-business designation requirements. The Small Business Administration has estimated that $12 billion in federal contracts since 2005 have been incorrectly coded or designated as small-business set-asides. In 2005 the agency awarded a total of $314 billion in contracts.
Even so, Amyx will be competing for work in a different climate than the one in which RSIS thrived.
"The funding environment has been exceptionally tight and it gets tighter and tighter," said Alex Hamilton, senior aerospace and defense analyst for Jesup & Lamont. "But I still like the space and I think the government and the contractors think that because you could pick virtually any company and they are at or near a backlog. . . . This stuff is certainly still important enough to be awarded."
Amey said he plans to grow Amyx by expanding its program management and financial management to include information technology and engineering services. Founder Cheryl Amyx, who sold the company to spend more time with her family and 15-month-old son, will remain as a consultant for a year, he said.
"RSIS we grew from two people to 1,700 in 11.5 years. I don't know if I'll be able to duplicate that again. Still, if we don't multiply it several times in the next five years I'll be disappointed," Amey said.