Case Study

DPC Technologies and the National Security Agency

DPC Technologies was founded in 1988 and by 1993 was a supplier of high performance data technology products and services to the National Security Agency. At that time Jon M. Stout, one of DPC’s founders developed and implemented an aggressive plan to increase the company’s footprint in the NSA. The goal was to become a trusted, reliable supplier in all major groups at the NSA and increase DPC’s standing as a prime contractor.

After researching available information regarding the NSA, a number of conclusions were reached.

1. NSA was a well funded technical leader in the Intelligence Community.
2. NSA required the IT and IA products and services DPC offered.
3. High barriers to entry (clearances, security, tight technical specifications) created an opportunity for DPC.
4. The NSA buying patterns included opportunity for small business.

Strategic Plan

The strategic plan included eight steps:

1. Research and understand the needs and buying patterns of the program elements of the agency and Maryland Procurement Organization.
2. Unconditionally fulfill all commitments (never “walk away” from a problem).
3. Utilize the most effective contract vehicles.
4. Hire experienced, effective sales and support personnel that had the proper clearances and access to program elements.
5. Build an effective recruiting organization that could supply personnel to meet NSA specifications.
6. Strengthen relationships with key prime contractors.
7. Proactively search out new business opportunities as solutions for agency requirements.
8. Revise the strategy to meet current condition

Performance Results

The plan produced immediate and significant results. Revenue and profits doubled every year during the period 1994-98 and DPC became a

well known and respected supplier in the major groups of NSA. In addition, DPC established itself as an important partner and teaming member for the Ground Breaker Project.

The Path to Ground Breaker

During the 1990’s NSA determined that non mission critical IT efforts could be better managed through outsourcing. Since the non-mission critical IT needs of NSA were very large, Ground Breaker became a major effort. An integral part of the NSA Ground Breaker strategy was the utilization of the NSA existing talent pool of IT specialists already employed by the agency.

As a first step, NSA introduced the “Soft Landing” concept as a way to utilize existing NSA IT talent through commercial outsourcing vehicles. The Soft Landing concept allowed existing NSA IT personnel the ability to leave the agency and re-enter as a contracted employee. Since most NSA employees had a minimum of 30 years experience with NSA and government service, employee benefits became an import factor in the bid evaluation of bids for Soft Landing projects.

Soft Landing

There were a total of seven Soft Landing awards and large prime contractors won the first two (DPC did not initially bid) DPC won the next four opportunities and became a recognized contractor for this effort. DPC’s strategy was to bid each Soft Landing RFP based upon a tailored benefit program in addition to competitive prices. DPC also invested in support personnel to ease the transition to the commercial world for the new employees. Word spread among the prospective NSA employees that DPC was an attractive Soft Landing Contractor.

Interim Contracts

There were other, traditional contracts that DPC won in partnership with major prime contractors and, by the end of 1998, DPC was considered a valuable team mate for the Ground Breaker effort by a number of prime contractors.

Sale to Northrop Grumman and the Eagle Alliance

In 1999, Stout sold his interest in DPC to Northrop Grumman Corporation. An important part of the transaction was the payment by Stout of over $1m in retention bonuses for key DPC employees. These individuals were instrumental in the winning strategy for the Eagle Alliance consortium as a vehicle for the awarded Ground Breaker contract.