DiPentima thinks bigger
SRA's new CEO lengthens firm's federal reach
- By Judi Hasson
- Mar 06, 2005
US-VISIT Web site
Renato DiPentima, SRA International's new chief executive officer, has a tough act to follow. He must continue to build on the foundation laid by his predecessor, Ernst Volgenau, the company's founder and longtime leader.
Already well-known in federal contracting circles, DiPentima has a blueprint for success, and the keystone is continuing the company's focus on the federal market. After pushing to win larger contracts two years ago, he has begun to see results in the public sector.
"For the foreseeable future, I think we can grow very well in that space," he said. "I see us as being able to grow to a couple billion [dollars] in size focusing on the federal market."
Stock market numbers echo DiPentima's confidence. Since the company went public May 24, 2002, its stock has jumped from $18 a share to nearly $60.
"They are one of the best performers in the publicly traded market," said Bill Loomis, an information technology investment analyst at Legg Mason.
SRA officials doubled the company's workforce and revenues from 2001 to 2004, increasing from 1,694 employees to 3,358 and from $312.5 million in revenue to almost $616 million. Insiders and industry analysts attribute SRA's prosperity to more than mere luck or the IT boom in the federal government.
The company can thank Volgenau in part for instilling a profitable philosophy at SRA, which he founded in 1978 in his basement in Reston, Va. The father of SRA created a culture in which customers came first and employees were a close second.
DiPentima and his team helped accelerate SRA's business by deciding to seek bigger contracts.
"Around 24 months ago, we stepped back and we looked at our competitors who were winning large jobs of more than $100 million and we asked, 'What would it take for us to be like them?'" he said.
The answer was business development. Larger companies maintain an active pipeline of upcoming opportunities. The pipeline contains potential business for which some company employees can plan while other employees work on current contracts.
SRA's pipeline was smaller and not well supported. DiPentima and other company officials decided to make an investment in business development to triple the size
of the business staff and recruit the best professionals DiPentima could find.
Now, the pipeline is flowing smoothly. "We've increased our pipeline significantly, from about $1 billion to over $6 billion," he said. "We were very successful in positioning opportunities."
SRA won its first contract of more than $100 million from the Government Accountability Office in January 2003. Although the company had won contracts in which the total revenue eventually exceeded $100 million, SRA reached a major milestone by winning a contract worth that amount at the start of the project.
More major contracts followed the GAO award, including a contract from the U.S. Agency for International Development worth $328 million to provide a broad range of IT services to support USAID's technology infrastructure and a $341 million deal to provide enterprisewide IT services to the Federal Deposit Insurance Corp.
DiPentima's desire to seek bigger contracts contributed to SRA's selection to join a team led by Accenture to work on the Homeland Security Department's $10 billion U.S. Visitor and Immigrant Status Indicator Technology program.
The winning team includes Dell, Global Technology Management, Raytheon, Sandler and Travis Trade Advisory Services, Sprint, Titan and SRA. SRA provides support for data analysis and manages data privacy and security for one of the biggest domestic security initiatives launched since the Sept. 11, 2001, terrorist attacks.
SRA has gained notice for other reasons, too. The company has focused almost exclusively on the federal market. Unlike other companies, SRA is known for a culture that makes people want to work hard and succeed. For example, in their annual report, SRA officials list the name of every employee and the year each one joined the company.
In that report, DiPentima tells investors, "our top priorities are to create value for our clients, employees and stockholders while maintaining a culture based on honesty and service. We believe that in doing these things well, the value of our company will steadily increase."
The company has been recognized for its efforts in promoting a good working environment. For the sixth year in a row, Fortune named it as one of the 100 best places to work. The recognition only adds to the company's gravitas in the market, analysts say.
"The company has been well recognized for its qualitative aspects, namely what's the management culture like. Are people happy here?" said David Garrity, an investment researcher at Caris and Co.
Garrity said SRA officials have maintained a good balance between the civilian and defense and intelligence markets, and they have been successful in partnering with other companies.
"It's a scenario that includes strong internal discipline, a strong fundamental performance, and it certainly is recognized by investors," he added.
So far, SRA officials have not pursued business in the commercial market. DiPentima, however, refused to say they never would.
"I have not initiated a commercial-
sector" business, he said. "It might make sense to do that when the commercial sector rebounds. We have been able to reinvent ourselves every two years, and moving into a commercial sector might be the right plan. But right now, we are not at risk if we don't. There is a very robust federal market."