For almost four decades, the U.S. government has made growing use of so-called SETA (Systems Engineering and Technical Assistance) contractors to provide specialized services and skills outside of the traditional civil service personnel ranks. Today, SETA contracts make up a huge share of the contracting budget of agencies like the Department of Defense (DoD), something that has become a genuine concern for senior government leaders like Secretary of Defense Robert Gates. Early in 2010, Gates spoke openly about the need to curb the use of SETA contractors and bring previously outsourced work back into the ranks of government civil servants. But what is the view from the ranks of the SETA contractors doing the vast array of tasks necessary in wartime to keep DoD and other agencies and their programs running? To get some insight, we recently sat down with Todd Morris, vice president, director of Mission Systems for SRA International, Inc., to get some perspective on SETA contracting in the 21st century.

John D. Gresham: First of all, let’s talk a little bit about your company. What are the origins of SRA?

Todd Morris: SRA is 30 years old. Founded by Dr. Ernst Volgenau doing high-end program support work for the Navy and the Department of Energy, and we’ve grown over those 30 years to 7,000-plus employees. Dr. Volgenau is still the chairman of the board and still very actively involved in the business. This year we’ll do a little bit north of $1.5 billion dollars of work, and our focus has been and continues to be primarily on the federal government marketplace, providing services in information technology products to the Department of Defense, civilian agencies, and the intelligence community.

What sort of technical areas have you been working over the years that you can talk about?

We’re a full-spectrum federal integrator and contractor. So, we provide the whole range of IT [information technology] solutions. But, we do have specialized practices in cyber security, in “green” IT, in knowledge management, in information retrieval, and, in fact, supported the special operations community – mostly component commands – for over 20 years, and have done some specialized knowledge management information technology applications for that community. We’ve been sort of a “behind the scenes” contractor for years, and, in effect, my whole career, over 20-plus years, of contracting and supporting SOF in small-scale ways and in the background. About a year-and-a-half ago we decided to make that the large corporate investment in raising our profile here in developing capabilities and services for SOCOM. And we are an awardee on the Global Battlestaff contract. That contract covers basically the whole gamut of services that SOCOM needs outside of IT and warehousing/logistics support: acquisitions for intelligence analysis; budgeting and financial analysis; subject matter experts; planning readiness, including continuity of operations.

Overall, at a billion-and-a-half dollars a year in business, you’re no longer a medium-sized company. SRA has now become one of the major players in this industry, hasn’t it? What has been the mechanism of your growth? Have you been aggressively acquiring, or have you just slowly grown the business over those decades?

I’d say we’ve more slowly grown the business. We have made key acquisitions over time, but nothing along the scales of some of our competitors. Almost all of our growth has become organic, and we look at acquisitions as a way to enter new niches. For example, the post-9/11 period obviously set up a big need for intelligence analysis, counterterrorism expertise, and we reached out and made a couple of key acquisitions in that area. We really concentrate on organic growth. Now, things may change; our company’s been very successful and we may want to expand our core, but that’s been our “M.O.” for the last 10 years or so.

Okay, talk to me about this new omnibus contract that SOCOM has just put out, because it provides an interesting perspective on SETA contracting across the entire DoD enterprise in that it’s large – essentially a service-level type contract because there’s the reality that SOCOM is kind of a fifth armed service. If you can, can you give us some sense of that contract, lay out the skeleton, and start hanging some nuts and bolts on it for us?

Let’s look at what SOCOM has done here and I think it’s very impressive. One, they have managed to balance two somewhat competing requirements. One is competition: They’ve wanted more competition for this kind of work. And number two is agility. Typically these things kind of work against themselves. So, their solution was complete an Indefinite Delivery/Indefinite Quantity (IDIQ) contract vehicle and make awards to four strong prime contractors. We were one of those awardees. And then, for the 110-plus planned SETA task orders, we’re all going to compete – very efficiently and aggressively and thoroughly, on all 110 of these task orders. So,

SOCOM is achieving getting better value, more innovation, and yet they’re still able to do this kind of contracting with the kind of speed that this command demands.

Now, let’s hang a few bits on that. Originally, the solicitation was responded to by six different bidders. The final down select picked four?

Yes, they made awards to four strong prime awardees.

And those awardees are?

SRA International, Booz Allen Hamilton, CACI, and Jacobs, which was the incumbent on the previous contract. That’s a lot of power for the command [SOCOM] when you think about what they’ve got at their disposal now in terms of competitive SETA resources, and in terms of thought leadership, and in terms of the personnel that can be brought to bear on any particular task. The challenge there is that you’ve got to come up with mechanisms in the competition that don’t bog down the system, because you’ve got all these big guys competing for every individual task. So SOCOM set up proposal mechanisms for this competition that were very forward thinking; the proposal requirements aren’t onerous, for example, and, it’s easy for us from a contractor perspective to compete on these things, and that really helps everybody. And SOCOM still gets a good value out of all those high-powered contractors.

Now, as I understand it, each contractor initially won a single SETA task award. What was SRA’s first SETA task order if I can ask?

Our first one was a very exciting one for us: Program Executive Office [PEO] Maritime, the executive office for maritime support, and that task started for us on June 1, 2010. We successfully started that up on day one and so far it’s been fantastic. The customer has been very happy with the transition that has been under way. It was seamless and we’re moving right out with that office. It’s very exciting stuff for us. There are 16 contractor personnel in the PEO Maritime office right now: ours and our teammates’.

What were the other three task orders that your competitors were awarded in the initial tasks?

One was with PEO Special Reconnaissance, something very similar to … I mean, in terms of scope, to the subject areas that we are covering with PEO Maritime. Another was back office support with maybe half a dozen people that do the management for the integrated survey programs, and then the regional magazine initiative, which was really the production and distribution of actual magazines for the component commands. It is really representative of the tremendous variety of tasking that we and the other contractors expect to see over the next five years, in terms of the different types of contracts and task forces that are going to be competed under this contract. The other thing I think that you’d be interested in is that this contract is one of SOCOM’s first contracts that they’re really focused on performance-based contracting. So, they have really changed the nature of how this kind of SETA work is contracted for, and then how your performance is monitored. It’s new. It’s a cultural change for this command and probably it’s unique at least in terms of the kind of SETA work we do here. The government isn’t paying us for putting “butts in seats” and résumés. We have to lay out the things that we are going to produce for the government, and then that’s how our performance is tracked and measured, and that’s how we’re evaluated. Typical SETA, which we do in a lot of places, they’re paying for a particular person with certain capabilities.

That’s going back to the old 1980s beltway bandit metaphor. Which gets into this question: What in your mind is the value of having those 16 contractors in PEO Maritime versus the government trying to recruit and hire 16 civil servants and enlarging the government employment rolls?

I think it’s an easy call with a customer like SOCOM and what we offer is both flexibility and agility. SOCOM’s requirements evolve and change very rapidly. So the kind of person that they need today is probably not the same kind of 16 people that they’re going to need six months from now. … There’s a role for contractors that can react quickly, rapidly, and can staff with the right people at the right time, and then as those requirements evolve, we change the staffing mix to folks that other contracts and other programs need and continue to meet the government’s requirements.

On a per-hour basis, are you able to deliver a cost that’s commensurate or better than the government can with civil servants?

I absolutely think we do, though it’s very difficult to make this kind of apples and oranges comparison because the costs of things like health care, retirement, pensions, and things like that, for example, are kind of hidden in the government’s overall number. But I absolutely think we’ve shown over time that, in the right circumstances, this kind of contracting provides tremendous value. As you know, DoD has received the mandate from the secretary to in-source personnel where they can, and we’re happy to fill the SETA role where it’s appropriate. I think that our tasking with PEO Maritime is just a great example of that appropriateness.

How long have you been doing this kind of work, sir?

I have been a contractor the whole of my professional life, since 1987. I graduated with an engineering degree, and for my very first customer I developed a firearms training simulator for a special warfare unit at Fort Bragg. It was a DARPA [Defense Advanced Research Projects Agency] program. I worked that for about a year-and-a-half and that was my introduction to the special warfare community. I’ve also taken what I learned in

the special operations community and applied it to our homeland security, law enforcement, domestic security, and other kind of things that we do. A lot of the techniques and tactics and the like are very adaptable to domestic counterterrorism missions as well.

Those 16 folks that are currently working on your tasking at PEO Maritime, they’re people with names and homes and mortgages and cars and kids. Tell me something about those people. What kind of person are you putting into the positions over there at PEO Maritime at SOCOM?

Well, these people, they’re all professionals of one sort or another. So, they cover the full range of requirements analysis. You’ve got some folks who understand how to approach the requirements process for building special warfare boats, so some are helping the government in developing the requirements for new maritime systems while you’ve got other folks that provide engineering services who understand the lifecycle requirements of a system once it’s fielded. This way, they can help our government customers come to terms with all the downstream maintenance or logistics requirements involved in fielding a new system. So, those are the kinds of people we hire, and most of them have come out of the special warfare community or defense community in general and are familiar with this customer and the maritime world in general. Some are retired military. Some are folks who have just been in engineering for different companies for most of their careers. Folks that generally have been doing this for a long time.

And what do you see as the professional rewards for being in the SETA contracting arena right now? I mean, we’re in the odd situation that you’re in a business where the secretary of defense has recently “called you out,” and yet here you are. You’ve got a brand-new contract with a new delivery order and 16 people you’ve put to work over at SOCOM. You’ve got to be feeling pretty good given the circumstances, don’t you?

You know, it’s one of our marketing lines: “… it’s the missions that matter.” You know the reward is the ability to do this kind of work to make our nation safer and support our warfighters. That’s the kind of intangible reward that goes beyond the business itself. And the fact that we can make a business out of that is just so very rewarding for us, both from a business perspective but I think even more so from an intellectual and an emotional perspective. It’s a tough business, and you’ve got to work hard to make the business work. But again, we really never want to lose track of the fact that there are a couple of wars going on and this command is in I don’t know how many countries around the world right now. But we’d have a hard time finding places where they are not. So it’s a big responsibility, and one that we take very, very seriously. It’s easy to motivate those kinds of people when you’ve got this kind of issue to work on. And this contract at SOCOM is just the start. We’re also looking at working the IT area, which we’re very strong in, and there are some large IT opportunities here at SOCOM as well. So, we’re looking at how we might take some of our cyber security or logistics practices into this world.

DoD and the rest of the government keep talking about wanting to minimize the need for SETA-type contractors and yet we’ve seen a continual growth in the industry back to the 1970s when companies like SRI and BDM first started really doing it. But some day we’re going to come home from Iraq and Afghanistan, and with all that said, what do you see for SRA International both as a company and as a leader in the DoD SETA business? What do you see it evolving into?

Well, we’re in the best position that we can be in this industry. One of the reasons is we’re not a platform company. We provide services and information technology, so a lot of the spending in our business specialties isn’t going to dry up because of that. In fact, one of the reasons we’re here at SOCOM making such an investment is we see the mission here at Special Operations Command as expanding in the post-Iraq and post-Afghanistan timeframe. You know, you cannot train a SOF force after a crisis breaks with the kind of missions that they do, and the kinds of training we do with our allies, getting ready for contingencies and the special operations themselves. It’s going to be a large, growing component to our overall defense policy and so we want to be a part of that. So I think this kind of contract and the other work that we’re doing here, and the kinds of work that we do in the Defense Department in general, have positioned SRA … to continue to expand and succeed. I like where we are.

Where would you like to go? As you leverage the work that you’re doing or have been doing, where do you want to go with it? Do you have any avenues that are clearly opening up as business opportunities or directions you want to follow up?

Absolutely! There are certainly things that we’ve got a lot of specialized skills [in] and initiatives that we can develop. Cyber security and irregular warfare – we’re really one of the thought leaders in terms of irregular warfare analysis. We do a lot of work for JIEDDO [the Joint IED Defeat Organization] in that capacity. I would say in terms of leveraging this contract in this relationship would serve us all very well. We would like to be more involved in the whole life cycle systems engineering area; maybe not necessarily for SOCOM, but maybe for one of the services where we design and build development requirements in the whole life cycle systems engineering process for something like an LCS mission module or for some sensor platform for a UAV. I think SOCOM is a good place for us to make that branch because they’re not doing a lot of ACAT-1 and ACAT-2 sized programs. They take things, modify them, and do it relatively quickly. It’s of a scale that we can kind of sink our teeth into. It may appear to be a large effort to the public, but we’re still rather modestly-sized compared to some of our competitors. And I think SOCOM is a great place for us to branch out to that systems engineering.