Headquartered in Washington DC, GovernmentCIO (“GovCIO”) is a private IT services company, providing services in IT modernization, digital solutions, analytics, cybersecurity, and management and advisory support. GovCIO’s portfolio also includes a Media & Research business, which runs a digital publication covering federal technology topics.
With its recent acquisition of Salient CRGT, the combined company consists of more than 2,200 employees and FY2021 revenues of approximately $700 million.
Overview of GovCIO’s Organization
GovCIO’s U.S. Government contracting business (we’re not discussing their media business) operates through three main business units. Two of these units—health and civilian and national security solutions, as well as their leaders—were brought over from the Salient CRGT acquisition.
- Health and Civilian Agencies – Led by Rebecca Miller (formerly Salient CRGT), this unit supports federal health customers, including the Department of Health and Human Services.
- National Security Solutions – Led by John Anderson (formerly Salient CRGT), this business unit provides a range of services to customers across the U.S. Military, Department of Homeland Security, Defense Contract Management Agency, and U.S. Special Operations Command.
- Veteran and Enterprise Technology Solutions – Led by Kristin Gill, this unit is responsible for the company’s Department of Veterans Affairs portfolio.
Mergers & Acquisitions History
The new GovCIO is made up of various acquisitions spanning the past decade. The company was acquired in 2020 by the technology-focused private equity firm Welsh, Carson, Anderson & Stowe (WCAS), reportedly by the motivation to use GovCIO as a platform for further acquisitions.
In April 2020, GovCIO built on their VA expertise through their acquisition of IntelligentWaves’ Veterans Affairs Operating Division via its joint venture with Sprezzatura Management Consulting. The purchase provides capabilities in systems engineering, cloud management and application security and provided access to additional work on the VA’s T4NG vehicle.
Its most impactful acquisition to date, however, is GovCIO’s acquisition of Salient CRGT, completed in August 2021. With this acquisition, the company acquired and deepened expertise in various service areas, including data analytics, cloud, software development, cyber security, and IT infrastructure.
The acquisition will trigger GovCIO’s graduation from the small business program, and will likely prevent the company from bidding on several follow-on set-aside opportunities. At the VA, for example, GovCIO has a number of ongoing contracts that were competed as service-disabled veteran-owned small business set asides, which they will not likely be able to re-bid.
According to GovCIO CEO Jim Brabston, the addition of Salient CRGT aims to enable GovCIO’s ability to compete on larger opportunities against formidable IT government contractors.
Salient CRGT itself was the result of a series of M&A activity. The company was formed in 2015 as the result of a merger between Salient Federal Solutions, Inc. and CRGT, Inc, which were themselves formed through various M&A actions.
Sample of Federal Contracts and Customers
Source: SAM.gov
Post Salient CRGT acquisition, the company’s largest footprint remains in the VA. However, the acquisition also brought new qualifications in the U.S. Department of the Army, USPTO, USCIS, and other non-health IT customers.
Select federal contracts include:
- U.S. Department of Veterans Affairs, Technology Incubation Services (TIS) – In August 2020, GovCIO was awarded a potential four-year, $179 million ceiling value task order to provide technology incubation services for the U.S. Department of Veterans Affairs’ demand management division. The task order covers support across several areas including business process reengineering/transformation, voice of the customer and emerging business practices, technology support as well as communications, administrative, and strategic and functional analysis.
- U.S. Department of Veterans Affairs, Network Engineering, Design, Implementation And Infrastructure Support (NEDIS) – In July 2021, legacy Salient CRGT was awarded a potential five-year, $207 million ceiling value task order to provide network engineering, design, implementation and infrastructure support to the VA. Salient was previously awarded a 3-month bridge contract for this work and held the previous iteration of this contract through legacy Triple-i.
- U.S. Department of the Army, Global Command Terrestrial Communications (GCTC) IV – In 2018, legacy Salient CRGT was awarded this potential four-year, $145 million ceiling value contract as a sole source effort to provide installation, maintenance, and modernization support for strategic terrestrial communication transmission systems. Salient CRGT has held this contract for three iterations. The company has received the full amount of this award.
FedSavvy Strategies Takeaway
- Through their acquisition of Salient CRGT, GovCIO greatly diversified its portfolio outside of the VA, gaining a modest market position in defense and other federal civilian agencies.
- Through their graduation from the small business size status (acquisitions and organic growth), GovCIO will experience some limitation in their pursuit of follow-on opportunities which may erode of their market share at the VA.
- Watch for leadership, business development and technical SMEs to turnover as the typical post M&A “churn” happens…note that many Salient CRGT leaders came over from legacy CSRA in an exodus (documented in our blog here).
- The company will likely leverage enhanced capabilities in data analytics, cloud, agile software development, cybersecurity and infrastructure solutions to more routinely compete outside of mid-tier businesses and with the largest U.S. Government contractors.
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