It was a packed room where Col. Mach Airmen will outthink, out-learn and out-innovate any adversary on the planet. The strategic initiative to realize this vision is called the Continuum of Learning CoL concept. Sorrell then shifted gears to speak about the reorganization efforts within the command.

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FORM K. Commission File No. Exact name of registrant as specified in its charter. Reston, Virginia. Title of Each Class. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. Check one :. Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

The aggregate market value of NCI, Inc. Such definitive Proxy Statement will be filed with the Commission not later than days after the end of the fiscal year covered by this Annual Report on Form K. PART I:. Item 1. Item 1A. Item 1B.

Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item Forward-Looking Statements. There are statements made herein which may not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of We are a provider of information technology IT , engineering, logistics, and professional services and solutions to Federal Government agencies.

Through our comprehensive offerings, we are a full lifecycle capabilities company. We provide full lifecycle IT specialties, complemented by our professional services. We have the agility, position, and determination to focus on expanding market segments within the Federal IT and professional services markets. We are extending our core capabilities in line with key market drivers and investing in a robust set of business solutions and offerings.

We provide these services to defense, intelligence, and Federal civilian agencies. We primarily conduct business throughout the United States. We have strong, long-term relationships with our customers, as evidenced by our record of retaining business. For more than 20 years, we have provided IT and professional services and solutions to the Federal Government, including customers such as the U.

Army, U. Air Force, U. We believe our strong relationships result from our in-depth understanding of customer missions, the strength of our technical solutions, and the co-location of a majority of our employees with our customers. Table of Contents We have made significant investments in our management, employees, and infrastructure in support of our growth and profitability strategies.

Our senior managers average more than 25 years of experience with Federal Government agencies, the U. Members of our management team have extensive experience growing businesses organically, as well as through acquisitions. We define backlog as our estimate of the remaining future revenue from existing signed contracts over the remaining base contract performance period and from the option periods of those contracts, assuming the exercise of all related options.

We are focused on continuing to grow organically while improving margins, and intend to expand our capabilities through strategic acquisitions. In addition, Department of Defense DoD IT budgets continue to grow in the areas related to cybersecurity and information assurance; situational and battlespace awareness; infrastructure upgrades relating to base realignment and closure BRAC and overseas activities; high-performance computing; and business enterprise systems development, implementation, and integration, among others.

Moreover, this data may not fully reflect Government spending on classified intelligence programs, operational support services to our armed forces, and complementary technical services, including sophisticated systems engineering. Overall, the total Federal IT market growth is slowing from previous years in the three major market segments within the Federal IT market: Civilian, Defense, and Intelligence, but the growth is not equal across these segments.

Among Civilian agencies, the Departments of Veterans Affairs, Social Security Administration, and Justice rank among the highest year-over-year budget growth rates. On average, DoD IT programs are growing at a slower rate due to the constraints of ongoing war spending. Increased demands in information security, surveillance, and other national security trends continue to drive the Intelligence market segment compared to other segments.

Table of Contents on IT spending. IT spending has faced downward pressure for the past several years due to the squeeze on discretionary spending with the projected climb in mandatory spending, this trend will likely continue. The result is increased Federal Government spending on IT to upgrade networks and transform the Federal Government from separate, isolated organizations into larger, enterprise-level, network-centric organizations capable of sharing information broadly and quickly.

While the transformation initiative is driven by the need to prepare for new world threats, adopting these IT transformation initiatives will also improve efficiency and reduce infrastructure costs across all Federal Government agencies. Transformational Initiatives Driving Investments. Despite the challenging economic environment today, Federal Government spending continues to rise in key technology and professional services areas. IT service providers can address common goals of the administration while providing efficient, cost-effective solutions as the Federal Government plans its technology transformation.

Within the DoD, plans are underway to create a new cyber command under the U. The evolving Federal cybersecurity strategy requires contractor support and we expect significant opportunities and growth in both the Civilian and Defense markets. Within the overall market for cybersecurity services, the majority of the effort is anticipated to be focused on integrated network and security operations, including threat identification and vulnerability analysis, cyber threat warning dissemination, incident response, situational awareness, and information sharing.

Human Capital Issues. Table of Contents workforce goals; therefore, there is still a significant gap that can only be filled by contractor support. Declining Federal Government Workforce. The increasing disparity between total Federal full-time equivalents FTEs and contractor workforce represents one of the driving forces underlying the push to reduce the contractor workforce and raise Federal employment.

While the contractor workforce has declined since , contractors still outnumber Federal employees Federal Government agencies are seeking more innovative solutions and technology services in response to the increasing pressure to operate more effectively and efficiently. The lack of Federal contracting professionals is a government-wide issue that has increased in visibility and consequence over the past few years. Shifts in acquisition trends increase complexity; acquisition challenges around protests and inadequate contract management increase administrative burden; and expanding requirements in best value procurement procedures and performance-based contracting demand more highly skilled acquisition professionals.

Acquisition Reform and Procurement Practices. Federal Government procurement practices and policies are expected to continue to evolve as Federal agencies increasingly rely on professional services providers for IT solutions and services. Contract Consolidation to Leverage Buying Power.

Agencies are consolidating multiple contracts into larger, single task order contracts to provide the majority of a broad array of technical solutions and services. Agencies hope to simplify contract administration, streamline acquisition timelines, and leverage their buying power across a more expansive, diversified industrial base.

The benefits to the Government include: reduced operational costs; improved efficiency; improved services; and reduced administrative costs. This consolidation trend benefits full-service professional services and IT solution providers with a history of successfully transitioning and integrating services. Professional service providers compete to be pre-selected under these umbrella contracts, which outline the basic terms and conditions for the procuring customers and end users.

Upon being pre-selected, the companies compete only among themselves to provide the services under the vehicle. These contracts provide the Federal Government contracting agencies with additional flexibility and responsiveness, as projects can be awarded quickly to these preferred vendors. Agencies can bypass much of the lengthy formal acquisition process involved in request for proposal purchases and the pre-qualification of contractors makes this option easier.

The continued growth of these types of multiple-award contracts benefits professional service and IT solution providers that have a broad portfolio of these contracts, allowing Federal Government customers easy access to services and solutions. The new administration has pledged comprehensive and sweeping changes to government contracting including identification of wasteful, inefficient, or ineffective programs; use and oversight of all contract types, particularly sole-source, and other non-competitive contracts; increased emphasis on contracting transparency; and avoidance of any organizational conflicts of interest OCIs.

The focus on transparency and increased scrutiny on OCI policies will benefit those professional service and IT providers that have delivered cost-effective and efficient solutions for customers; have avoided any real or perceived OCI issues particularly around the hardware and weapons systems environment; and have carefully mitigated production and support services.

We believe we are well positioned to meet the rapidly evolving needs of Federal Government agencies for IT and professional services and solutions because we possess the following key business strengths:.

Proven Ability to Win Business. As a result of our business development focus on securing key contracts, we are a prime contractor on numerous multi-year GWACs, agency-specific IDIQs, and MACs that provide us the opportunity to bid on hundreds of millions of dollars of business against a discrete number of other pre-qualified companies each year.

While the Federal Government is not obligated to make any awards under these vehicles, we believe that holding prime positions on these contract vehicles provides us an advantage as we seek to expand the level of services we provide to our customers.

We are committed to the continual improvement of our internal quality systems and processes to ensure that we deliver the highest quality products and services to our customers.

We have earned industry-leading and globally recognized certifications that demonstrate our mature, documented, repeatable, and successful systems and processes, including:. The CMMI model can be used to guide process improvement across a project, division, or entire organization. CMMI ratings assist customers in selecting reliable and low-risk suppliers of software products and services.

CMMI helps set process improvement goals and priorities, provides guidance for quality processes, and offers a point of reference for appraising current processes. Developed by the International Organization for Standardization, the ISO series of standards provide a proven framework for processes that enable an organization to consistently deliver products and services that meet customer requirements.

NCI was recertified during April with continuing annual assessments. Our ISO registration scope currently covers all NCI core IT and professional services provided to customers including systems design, development and integration, enterprise services, engineering and technical services, and security and information management. Our objective is to grow our business as a provider of IT and professional services and solutions to Federal Government agencies while improving our profitability.

To achieve our objective, we intend to:. Focus on Organic Growth. We intend to focus on our organic growth rate by capitalizing on our current contract base, expanding services provided to our existing customers, expanding our customer base, and offering new, complementary services.


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