Booz Allen Hamilton

Booz Allen Hamilton Inc.

Type	Private
Founded	1914
Headquarters	Tysons Corner, Virginia, USA[1]
Key people	Ralph Shrader, Chairman & Chief Executive Officer[1]
Industry	Consulting Government contractor
Revenue	▲ US$4 billion (FY2006)[1]
Employees	22,000,[1]
Website	www.boozallen.com

Booz Allen Hamilton, or more commonly Booz Allen, is a private consulting firm headquartered in Tysons Corner, unincorporated Fairfax County, Virginia, with 80 other offices throughout the nation. Ralph Shrader is its Chairman and Chief Executive Officer - the seventh since Edwin Booz founded the firm in Chicago circa 1914, making it one of the nation’s oldest consultancies.

Booz Allen's core business is contractual work completed on behalf of the US federal government, foremost on defense and homeland security matters, with limited engagements of foreign governments specific to U.S. military assistance programs. In this vein, Booz Allen’s services include strategy design, operations improvement, information technology work, systems engineering, organizational change efforts, modeling and simulation, program management, specialist staff augmentation, assurance and resilience, and economic and business analysis. Booz Allen is somewhat unique in that it competes for business with both pure systems integrators and defense contractors such as SAIC, BAE Systems, and Lockheed Martin, as well as with broader management consulting firms with a considerable stake in the public sector market such as Deloitte, BearingPoint, and Accenture. In 2008, Vault.com, an entity which provides survey based ‘prestige’ rankings of various professional industries, placed Booz Allen Hamilton second only to McKinsey & Company in the category of ‘Technology Consulting Firms’ (the sole grouping it was considered for), indicative of the fact technological issues in the broadest sense pervade a substantial portion of Booz Allen’s revenue stream.

As of July 31, 2008, what was formerly Booz Allen Hamilton’s parent company (which used the Booz Allen name itself) divided into two wholly separate entities, based on a vote by Booz Allen’s senior vice presidents and vice presidents. As a result, the Booz Allen Hamilton moniker would be retained by the half focusing on U.S. governmental matters, with spinoff Booz & Company taking sole control of its commercial and international portfolio. As a consequence, Booz Allen Hamilton is now majority owned by private equity firm The Carlyle Group, while Booz & Company is owned and operated as a partnership. ^[2] The split was engendered by several endemic differences between the two business units, namely: profitability (i.e., government work was both more profitable than most of the commercial operations and exhibited less volatile earnings), internal culture (e.g., the government side frequently retained mid-level consultants for several years, whereas the commercial side had greater staff turnover due to an up or out policy), and recruiting philosophy for mid-to-senior level employees (Booz Allen recruited a relatively high proportion of bachelor's, non-business master’s, and doctoral degree holders from a wide array of schools compared to Booz & Co.'s primary focus on elite MBA graduates).

Contents 1 History 1.1 Formation 1.2 Early years 1.3 Public years 2 Organization 3 Recruiting 4 Prominent client initiatives 4.1 Internal Revenue Service 4.2 New South Wales, Australia 5 Notable members and alumni 5.1 Business 5.2 Politics and public service 5.3 Other 6 Criticisms and controversies 6.1 SWIFT 6.2 Democracy Now 6.3 Homeland Security 7 See also 8 References 9 External links

History

"Booz Allen Hamilton traces its roots to Edwin G. Booz. A student at Chicago's Northwestern University in the early 1900s, Booz received a bachelor's degree in economics and a master's degree in psychology, upon completion of his thesis 'Mental Tests for Vocational Fitness.' In 1914, Booz established a small consulting firm in Chicago, and, two years later, he and two partners formed the Business Research and Development Company, which conducted studies and performed investigational work for commercial and trade organizations. This service, which Booz labeled as the first of its kind in the Midwest, soon attracted such clients as Goodyear Tire & Rubber Company, Chicago's Union Stockyards and Transit Company, and the Canadian & Pacific Railroad."^[3]

Formation

After graduating from Northwestern University in Chicago in 1914, Edwin G. Booz developed the business theory that companies would be more successful if they could call on someone outside their own organizations for expert, impartial advice.^[4] This theory developed into a new profession — management consulting — and the firm that would bear his name.

Early years

"In 1940, the firm was hired to help the United States Secretary of the Navy with World War II preparations, a project that marked the start of a longstanding relationship with the United States Federal Government. Since then, Booz Allen has had a hand in several notable private and public engagements throughout its years, such as advising on the breakup of Ma Bell and helping organize the National Football League in the 1960s."^[5]

Public years

In 1970, Booz Allen went public with an initial offering of 500,000 shares at $24 per share. Trading continued through 1976.^[6]

Organization

"Booz Allen is privately held, which allows it to consider long-range investments that companies beholden to shareholders might not be able to make, Gerencser said. With private ownership, the company can make investment decisions that pay off farther down the road than some of its competitors. 'As a managing director, I can put investments in place that may provide a return in four or five or six years,' Gerencser said, adding that, 'we can often place long-term and even risky bets.'"^[1]

The firm was once public in the 1970s.^[7], but the partners took the firm private again through one of the first management buyouts (MBO) to allow the firm to consider long-range investments that companies beholden to shareholders might not be able to make.^[8] Time magazine named it the most prestigious management firm in the world,^[9] with longstanding relationships with federal intelligence agencies, with current and former employees including former Director of Central Intelligence, R. James Woolsey, former CIA employee Miles Copeland, Jr., and former NSA Director Mike McConnell, who was the second Director of National Intelligence.

Recruiting

In 2007, the firm had roughly 110,000 applicants and 1033 new jobs.^[10]

Prominent client initiatives

Internal Revenue Service

Booz Allen was chosen in 1998 to help the Internal Revenue Service (IRS) modernize, and shed its dismal customer-service reputation. Booz Allen's team developed a strategy for the IRS to reshuffle its 100,000 employees into units focused on particular taxpayer categories: individuals, charities, businesses and so on. "We made some very dramatic changes in the way the IRS is organized", says Booz Allen Chief Executive Officer Dr. Ralph Shrader, an electrical engineering Ph.D. and 28-year company veteran.^[11] Despite these confident words, reports from the Government Accountability Office (GAO) have pointed to mixed performance results at IRS, and notably, poor management of its IT portfolio and its contractors^{[citation needed]}.

New South Wales, Australia

In 1988, the newly elected Greiner State Government commissioned a report into the State Rail Authority (SRA) of New South Wales by American consultants Booz Allen Hamilton. The report, delivered in 1989, recommended widespread job losses, up to 8000, including the withdrawal of staff from 94 country railway stations, withdrawing services on the Nyngan- Bourke line, Queanbeyan - Cooma line and Glen Innes- Wallangarra line, the axing of several country passenger services (the Canberra XPT, the Silver City Comet to Broken Hill and various diesel locomotive hauled services) and the removal of sleeper trains from services to Brisbane and Melbourne. The report also recommended the removal of all country passenger services and small freight operations, but the government did not consider this to be politically feasible.^[12] The SRA was divided into business units- CityRail, responsible for urban railways; CountryLink, responsible for country passenger services; FreightRail, responsible for freight services; and Rail Estate, responsible for rail property. Upon the formation of the business units in 1988, CityRail adopted a black and yellow 'L7' logo (later to become blue and yellow), and Countylink adopted its present blue and green 'Mountains' logo and livery.^[13]

Notable members and alumni

Notability follows this general principle: Lead and direct some of the world's largest corporations, government and other public agencies, emerging growth companies and institutions.^[14]

Business

• Jonathan Black - Director, Corporate Affairs, University of Oxford^[15]
• Rohit Bhagat - Global Chief Operating Officer, Barclays Global Investors^[16]
• Sir (Francis) Christopher Buchan Bland - Chairman of the Royal Shakespeare Company, and former Chairman of British Telecommunications PLC^[17][18][19]
• Chipper Boulas - Venture advisor in Paris, France and former Vice President of Corporate Strategy, eBay^{[citation needed]}
• Jonathan S. Bush - President, CEO, and Co-founder of AthenaHealth^[20][21]
• Art Collins - Chairman and CEO, Medtronic, Inc.^[22]
• Tim Collins - Founder and Chief Executive of Ripplewood Holdings^[23]
• Edward C. Davies (Ted) - Managing Partner, Unisys Federal Systems^[24][25]
• Karen Fawcett - Director, Standard Chartered Bank Malaysia^[26]
• Richard Gay - Senior Vice President of Strategy and Business Operations for VH1 and CMT, MTV Networks^[27][28]
• Rhonda Germany - Vice President of Strategy and Business Development, Honeywell^[29][30]
• Gerry Horkan - Vice President of Corporate Strategy, Yahoo! Inc.^[31]
• Paul Idzik - Executive Vice President and Chief Operating Officer, Barclays PLC^[32][33]
• Raymond J. "Ray" Lane - General Partner at Kleiner Perkins Venture Capital Firm; Chairman of the Board of Trustees at Carnegie Mellon University, former President and Chief Operating Officer of Oracle Corporation, and inducted to West Virginia Business Hall of Fame^{[34][35][36][37]}
• Edward J. O'Hare - Chief Information Officer for the U.S. General Services Administration's's Federal Acquisition Service; former Assistant Commissioner, General Services Administration, and former vice president at Dynanet^[38][39]
• Todd Y. Park - Co-founder and Chief Development Officer of Athena Health^{[20][40][41][42]}
• Mark DeSantis, PhD - Chief Executive Officer of ANGLE Technology Consulting and Management and former CEO and President of Formation3 LLC^[43][44]
• Stan Scoggins - Vice President of Worldwide Digital Assets, Universal Studios^[45][46]
• Deven Sharma - President, Standard & Poor's and executive vice president for global strategy at The McGraw-Hill Companies^[47][48]
• Michael Wolf - Former president and COO of MTV Networks^[49][50]

Politics and public service

• Wendy Alexander - Labour Party Leader and Member of the Scottish Parliament (MSP).^[51][52]
• Karol Joseph "Bo" Bobko - Retired United States Air Force officer and a former USAF and NASA astronaut.^[53]
• Keith R. Hall - Director, National Reconnaissance Office (1997-2001); formerly Executive Director for Intelligence Community Affairs^[54]
• Steve Isakowitz - Department of Energy Chief Financial Officer. Former Deputy Associate Administrator, NASA, 2002-2005^{[55][56][57][58]}
• William Benjamin "Bill" Lenoir (Ph.D.) - Former NASA astronaut.
• George E. Little - Media Relations, Central Intelligence Agency (2007-)
• John M. McConnell - Director of National Intelligence (2007-); formerly Director of the National Security Agency (1992-96); retired in 1996 as Vice Admiral, United States Navy^[59]
• Zoran Jolevski - Ambassador of the Republic of Macedonia in the US.
• Thomas S. Moorman Jr. - Commander, Air Force Space Command (1990-92); Vice Chief of Staff, U.S. Air Force (1994-1997)
• Michael C. Mullen - Assistant Commissioner, U.S. Customs and Border Protection
• Patrick Gorman - Chief Information Officer (CIO), and Assistant Deputy Director National Intelligence (ADDNI), Strategy, Plans, and Policy, ODNI [4]
• Andrew Turnbull - Member, House of Lords (upper Parliament), United Kingdom (2005-); Head of British Civil Service (2002-2005)
• Melissa Hathaway - Director, National Cyber Security Initiative
• General Frederick Frank Woerner, Jr. - Retired United States Army general and former commander of United States Southern Command.
• R. James Woolsey, Jr. - Director of Central Intelligence Agency (1993-95)
• Dov Zakheim - U.S. government advisor

Other

• Joseph Garber - Author
• Olivia Goldsmith - Author
• David H. Holtzman - Author
• Patricia A. Morrissey - Commissioner, U.S. Department of Health and Human Services (presidential appointee)
• Bruce Pasternack - Former President and CEO of Special Olympics International, former Director of Energy Policy for the Federal Energy Administration, Former board member BEA Systems (NASDAQ: BEAS), currently on the board of trustees of Cooper Union and serves as a board member for Codexis, Quantum Corporation (NYSE: QTM) and Symyx Technologies as well. Also, was the author of Results and The Centerless Corporation, books on strategy and business.
• Michael Schearer - Author and computer security researcher
• Michael D. Smith - Professor at Carnegie Mellon University

Criticisms and controversies

SWIFT

In 2006 at the request of the Article 29 Working Group, an advisory group to the European Commission (EC), the American Civil Liberties Union (ACLU) and Privacy International (PI) investigated the U.S. government's SWIFT surveillance program and Booz Allen's role therein. The ACLU and PI filed a memo at the end of their investigation which called into question the ethics and legality of a government contractor (in this case Booz Allen) acting as auditors of a government program, when that contractor is heavily involved with those same agencies on other contracts. The basic statement was that a conflict of interest may exist. Beyond that, the implication was also made that Booz Allen may be complicit in a program (electronic surveillance of SWIFT) that may be deemed illegal by the EC.^[60][61]

Democracy Now

Another controversy related to some of the senior staff of Booz Allen (past and present) and related to its performance on some specific U.S. intelligence agency contracts was brought to light on January 12, 2007 in an interview conducted by Democracy Now! with Tim Shorrock,^[62] an independent investigative journalist, and separately in an article he wrote for the Salon online magazine. Through investigation of Booz Allen employees, Shorrock asserts that there is a sort of revolving-door conflict of interest between Booz Allen and the U.S. government, and between multiple other contractors and the U.S. government in general. Regarding Booz Allen, Shorrock referred to such people as John M. McConnell, R. James Woolsey, Jr., and James R. Clapper, all of whom have gone back and forth between government and industry (Booz Allen in particular), and who may present the appearance that certain government contractors receive undue or unlawful business from the government, and that certain government contractors may exert undue or unlawful influence on government. Shorrock further relates that Booz Allen was a sub-contractor with two programs at the U.S. National Security Agency (NSA), called Trailblazer and Pioneer Groundbreaker.

Homeland Security

A June 28, 2007 Washington Post article related how a U.S. Department of Homeland Security contract with Booz Allen increased from $2 million to more than $70 million through two no-bid contracts, one occurring after the DHS's legal office had advised DHS not to continue the contract until after a review. A Government Accountability Office (GAO) report on the contract characterized it as not well-planned and lacking any measure for assuring valuable work to be completed.

According to the article,

A review of memos, e-mail and other contracting documents obtained by The Washington Post show that in a rush to meet congressional mandates to establish the information analysis and infrastructure protection offices, agency officials routinely waived rules designed to protect taxpayer money. As the project progressed, the department became so dependent on Booz Allen that it lost the flexibility for a time to seek out other contractors or hire federal employees who might do the job for less.

Elaine C. Duke, the department's chief procurement officer, acknowledged the problems with the Booz Allen contract. But Duke said those matters have been resolved. She defended a decision to issue a second no-bid contract in 2005 as necessary to keep an essential intelligence operation running until a competition could be held.^[63]

See also

• Booz & Company
• Booz Allen Classic
• James L. Allen
• Kellogg School of Management
• List of United States defense contractors
• Value Measuring Methodology

References

External links

• Booz Allen Hamilton official website
• [5]
• Shorrock, Tim. "Carlyle Group May Buy Major CIA Contractor: Booz Allen Hamilton." Corpwatch, March 8, 2008 (article profiles Booz Allen Hamilton).
• Story about Booz Allen Hamilton from Democracy Now!, May 19, 2008