100 Top Federal Integrators

GovernmentVAR

The GovernmentVAR Top 100 Federal Integrators list includes six firms that posted more than $1 billion in government sales in 2003. In addition to Falls Church, Va.-based CSC, which recorded $5.45 billion, Lockheed Martin, at No. 3, was right behind CSC at $5.1 billion in sales. No. 4 is San Diego's SAIC, with $2.2 billion in government sales last year. Rounding out the exclusive billion-dollar club is Plano, Texas-based EDS, with $1.9 billion in government sales, and General Dynamics, also in Falls Church, with $1.7 billion in government IT revenue.

The Top 100 list runs the gamut of companies, from global integrators to regional specialists. Although the sales average of all 100 firms totaled approximately $313 million, only 14 firms posted sales over that benchmark. The list shows a bifurcated marketplace populated by a dozen or so heavy hitters, followed by a greater number of smaller players dividing up the remaining pie. One-third of the top 100 posted sales of $100 million or more. And 86 posted sales of $10 million or more. Please note that the list reflects 2003 information and does not include the 2004 acquisition of DigitalNet Holdings by BAE Systems North America, which will create a $1.2 billion IT unit (see "BAE Systems N.A. Buys DigitalNet For $600 Million").

By a strong majority, government revenues increased year-over-year for the Top 100 Federal Integrators, often by 10 percent or more. Only about 10 percent posted lower sales, and none in the Top 10 did. Interestingly, the largest revenue growth numbers appear, for the most part, at the top of the chart, indicating that major players are cementing their domination of the market. That trend also is evident in our VARBusiness 500.

Readers will find very few pure-play firms among our list of federal integrators. In fact, only nine of the Top 100 derive their revenues exclusively from the government marketplace, and none of them is in the Top 25. Seven of the Top 20, meanwhile, report that 90 percent or more of their sales come from the government. That stat is not surprising and indicates simply that those intensely involved in government contracts are more likely to pile on the revenues.

The Top 100 also reveals that, among the pure-plays, company size does not play a role in the percentage of business that was conducted with the government last year. Both large and small players are devoting all of their resources to government contracts. On one hand, McLean, Va.-based Tybrin finished up at No. 28 this year with all of its $124 million derived from government sales, while Arcadia, Calif.-based Essence Tech, squeaking in at No. 96, also did 100 percent of its business—$2 million worth—with the government. As for customers, virtually all of the major government agencies contracted out to the Top 100 in 2003, with the Department of Defense represented in a majority of the top 20. Surprisingly, the Department of Homeland Security appears infrequently, but that number is sure to increase.

With the elections coming up, it's possible that some agencies might stutter-step for a few months should a new administration move in. That aside, all signs point to increased activity for the remainder of the calendar year and into 2005. Congratulations to all the firms that made GovernmentVAR's first list of Top 100 Federal Integrators. And for those that didn't, we hope to see you on next year's list. Now, click on the link for all the juicy stats Top 100 Federal Integrators List.