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Subject: McLean-Based BDM Plans Reorganization;New Division to Focus on Increasing
Date: Thu, 19 Nov 92 04:44:31 EST
Message-ID: <3.1992Nov19.044432@AmeriCast.com>

McLean-Based BDM Plans Reorganization;New Division to Focus on
Increasing Nongovernment Business<By Steven Pearlstein=Washington
Post Staff Writer= BDM International Inc., one of the Washington
area's biggest government contracting firms, yesterday announced
a company-wide reorganization aimed at increasing its nongovern-
ment business.

 Phillip Odeen, BDM's chief executive, said the company would
split into two divisions, one focused on government contracting
and another aimed at selling the company's expertise in designing
computer systems to commercial customers.

 Odeen will remain chairman of the entire company and will head
the government-oriented business.  He has launched a search for
an executive to head the commercial division, to be known as BDM
Technologies Inc.

  Like a number of Beltway firms that rely on service contracts
from the Pentagon and other federal agencies, McLean-based BDM
has found it difficult to win commercial business because of the
distinct culture involved in government contracting. A similar
strategy was announced two years ago by its McLean-based rival,
PRC Inc., which has met so far with only modest success.



"We have concluded that we need a separate organization where the
people at the top are not encumbered by the mind-set of people
who have been involved in government contracting all their
lives," Odeen said yesterday. "Transferring those people over to
commercial work just doesn't work."

  One difference, he said, is how government and commercial com-
panies price their services.  Firms working for the government
set prices by calculating their costs and adding on 5 percent to
8 percent for profit. Commercial firms, he said, tend to figure
out what price the customer can pay and try to adjust their costs
accordingly.< Commercial transactions also are often sealed by
verbal agreement rather than the elaborate and complex government
contracts required by federal regulations, Odeen said.  BDM,
which is expected to have 1992 revenue of more than $400 million,
now relies on Pentagon contracts for 60 percent of total sales,
down from 80 percent four years ago, and that is expected to
remain about the same for the next year, Odeen said.

 The fastest-growing portion of the company's business is ser-
vices provided to other government agencies such as the National
Aeronautics and Space Administration, the departments of tran-
sportation and energy, and the Securities and Exchange Commis-
sion. Sales to commercial firms and local governments account for
11 percent of sales.  BDM is owned by the Carlyle Group, a Wash-
ington investment bank.<02:03 11-19C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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