Alion Science & Technology (Alion) is an interesting mid-tier and a likely under-appreciated competitor by many federal contractors. Alion was founded out of the Illinois Institute of Technology (IIT)’s Research Foundation of Armour Institute of Technology in 1936 with the goal of testing and developing new technologies. Today, Alion continues to provide engineering solutions in domains including intelligence, surveillance, and reconnaissance (ISR); live, virtual, constructive (LVC) training; modernization and sustainment services; network and software solutions; systems engineering and integration (SE&I); and weapons platforms support.
What does Alion gain from the recent of acquisition of MacB?
In August 2018, Alion acquired MacAulay Brown (“MacB). This represented a significant investment by Alion (backed by their owner Veritas Capital) to expand capabilities. What did Alion gain?
- MacB amplifies Alion’s core capabilities by providing additional engineering services, cybersecurity, and product solutions for the federal government.
- MacB brings 1,500 employees with engineering and cybersecurity security expertise.
- MacB provides six integrated laboratories in Dayton, OH; Alexandria and Roanoke, VA; Linthicum Heights, MD; Fayetteville, NC; and San Antonio, TX.
- MacB increased Alion’s footprint with the U.S. Air Force and the U.S. Army.
- MacB enabled better market penetration into customers such as the Missile Defense Agency (MDA) and U.S. Special Operations Command (SOCOM) where Alion had no substantial business.
Core customers
The new Alion has not deviated from its national security mission, but it has expanded (as mentioned earlier) across DoD. Note the below customer spend across the new Alion. A unique aspect of Alion is their prolific series of wins via DoD’s Defense Technical Information Center (DTIC) and their “TAT” contracts (more later). DTIC represents funding from a wide variety of DoD customers.
Figure 1 – Map of spending across major customers over FY2014 – FY2018
Alion’s integrated laboratories and facilities
With the new addition of MacB six integrated laboratories, Alion now has over 30 facilities around the country. Some of Alion’s specialty facilities are the Advanced Materials and Coatings Laboratory Rapid Solutions Group, ISR Systems, and Rapid Engineering Solutions. Alion and MacB’s facilities provide a wide array of services to include: research, development, test, and evaluation (RDT&E); rapid prototyping, fabrication, and mid-rate production; integration; cybersecurity solutions; lifecycle support; engineering services; instrumentation; training; and custom tools.
Alion’s other capabilities and offerings
While Alion is a diversified services business, there are a few interesting aspects to them.
- Improving engineering practices—Alion’s Agile Engineering Methodology draws on software development best practices to guide the customer’s agile engineering – an iterative, incremental method of managing design and build activities.
- Emerging artificial intelligence (AI) capabilities—Since making the acquisition of MacB, Alion has marketed their focus on using artificial intelligence “Applied Ai” to enable solutions for U.S. defense and security systems. This is especially enabled through the legacy acquisition of Enlighten IT made by MacB in early 2017.
Defining Alion and MacB contracts
- In June 2014, Alion was awarded a prime seat on the five-year, $3 billion Defense Systems Technical Area Tasks (DS TAT) contract; Alion has been obligated $923 million to date. Notable task order:
- Naval Surface Warfare Center, Panama City Division (NSWC PCD) Autonomous and automated weapon system design, system engineering and life cycle development engineering with $54 million obligated to date
- U.S. Army Tank Automotive Research Development and Engineering Center (TARDEC) has engaged Alion for ground vehicle and combat service support solutions with $53 million obligated to date
- Alion’s has won over $1.6 billion in obligations via the legacy Seaport-e contract. The following are some of the most notable and active task orders.
- SEA 21 lifecycle maintenance and modernization support ($191 million obligated to date)
- Support services for PEO Subs ($181 million obligated to date)
- Throughout 2018, MacB has also won a couple of notable awards.
- In June, MacB was awarded a $44 million cybersecurity task order under CSTAT to assist the Air Force Life Cycle Management Center (AFLCMC) Command, Control, Communications, and Intelligence (C3I) Infrastructure Division (AFLCMC/HNI).
- In September, MacB won the $92 million Foreign Materiel Exploitation (FME) contract for the U.S. Air Force’s National Air and Space Intelligence Center (NASIC).
The FedSavvy Strategies take on Alion
Alion is a formidable competitor—specifically with Navy and some other DoD customers. Alion has worked to stay mostly true to their focus on science and technology opportunities.
Acquiring MacB enabled Alion to (1) expand its RDT&E capabilities, (2) buy additional market share across DoD, and (3) compete with the ever changing (and increasingly large multi-billion dollar) competitive landscape. As Alion continues to integrate MacB into the organization, we can expect Alion to figure out more areas to make “1+1=3” with the combined capability and customer set. The combined companies will likely continue their work on technology innovations, as is evident through their interest in artificial intelligence. Using the newly-acquired MacB laboratories, Alion has more access to increasingly differentiated capabilities which may be more difficult to replicate.
While Alion may be underappreciated in some domains, they will likely look to expand their presence in the coming years and could become a threat to companies that don’t recognize a new threat.
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