Lucent takes aim at $2B in federal opportunities

A year and a half ago telecommunications behemoth AT&T spun off Lucent Technologies Inc. and computer manufacturer NCR Corp. as part of massive restructuring. Now Lucent a giant by its own right with $27 billion in annual revenue in communications products and services is making a name for itself in the federal market.

Lucent already has annual revenue of some $1 billion in the government market. But James R. O'Neill who joined the company six months ago as president of Lucent Technologies Government Solutions is now putting in place a strategy to boost revenue to $2 billion by the end of 2000.

While such a goal is aggressive O'Neill believes the demand for communications bandwidth puts it within reach. "I really think we can do it " he said. "The opportunities are there and the customer wants to spend the money."

The Government Solutions group essentially acts as a channel for Lucent Technologies. It sells products to government contractors - including AT&T and other communications service providers - and directly to federal agencies which Lucent supports with its own systems integration services. It also includes support from Bell Labs the famed research and development organization that spun off with Lucent.

New Lines of Revenue

More than just winning big contracts O'Neill is looking to create new sources of revenue across the government.

The Government Solutions group recently formed four lines of business: civilian agencies Defense advanced programs which encompasses the intelligence community and distributed third-party solutions.According to O'Neill the company has a strong presence in such agencies as the Army the Navy and the intelligence community but it is weaker within the Air Force and many of the civilian agencies.

O'Neill and other executives met last week to identify potential new opportunities to pursue as either a prime or subcontractor. Targets include NASA's Consolidated Space and Operations Contract in which it is a subcontractor to Boeing the Treasury Department's Prime contract which is part of the Tax System Modernization program and a network services pact at the Social Security Administration.

The strategy is not to scramble for business but to focus on opportunities that company executives are sure they can win. "This is not a shotgun approach this is a surgical approach " O'Neill said. Decisions about whether to bid are made by three people at Government Solutions which enables them to keep "really fleet afoot."

To bolster its chances O'Neill's organization in the last six months has brought on more than two dozen former government executives. This group complements its 100 certified program managers already on staff. "We've really taken the time to understand what the customer wants " O'Neill said.

Additionally Lucent is looking to move more products through resellers including 8(a) firms. About 90 percent of its product business is direct sales and the company would like to make it more of a 70/30 or a 60/40 split O'Neill said.

Of course Lucent also expects to boost its revenue by building on recent successes.

In the last few months Lucent has captured two big prizes: one of two pacts for telecommunications products and services under the Navy's $2.9 billion Vivid program and one of two contracts under the Army's $1 billion Digital Switched Systems Modernization Program. The firm also has captured a number of important wins in the intelligence community according to Lucent.

O'Neill is now setting his sights on another high-profile program: the Pentagon Renovation a single award 10-year contract to replace the Pentagon's communications infrastructure. Seven partners fill out Lucent's team: Electronic Systems Associates GRC International Inc. High Performance Technologies Mele Associates N.E.T. Federal Inc. Robbins-Gioia Inc. and Science Applications International Corp.

Lucent "is a one-of-a-kind company " said Avon James an executive vice president with Robbins-Gioia. Besides starting off with a $27 billion base of business Lucent brings Bell Lab technology "which hasdriven communications for many many years " James said.

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