Booz Allen Hamilton
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Booz Allen Hamilton Inc.
Type	Private
Founded	1914
Headquarters	McLean, Virginia, USA[1]
Key people	Ralph Shrader, Chairman & Chief Executive Officer[1]
Industry	Government contractor
Revenue	▲ US$4 billion (FY2006)[1]
Employees	19,000,[1] in offices on six continents
Website	www.boozallen.com

Booz Allen Hamilton is a private government contractor with headquarters in McLean, Virginia, and more than one hundred offices on six continents. Ralph Shrader is Chairman and Chief Executive Officer of the company—the seventh chairman since Booz Allen's founding in Chicago in 1914.^[2]

Booz Allen's services include information technology consulting, systems engineering, management and organizational change services, staff augmentation, and business analysis for the US Federal Government. Booz Allen primarily competes with SAIC, BAE Systems, IBM, and other systems integrators and defense contractors.

As of July 31st, 2008, what was formerly Booz Allen Hamilton is now two separate companies. The Booz Allen vice presidents, aka partners, took a vote and decided to split the company into two distinct divisions. One focusing on US Government contracting, and the other focusing on commercial and international management consulting. The US Government business remains Booz Allen Hamilton and is majority owned by the Carlyle Group while the commercial and international firm is known as Booz & Company and is owned and operated as a partnership.^[3]

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."^[4]

Formation

After graduating from Northwestern University in Illinois 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.^[5] 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."^[2]

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 is now the second Director of National Intelligence.

Recruiting

The recruitment process is very inconsistent and is team dependent. In 2007, the firm had roughly 110,000 applicants and 1033 new jobs, which translates to a hire rate of less than 1%.^[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, number 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.

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 Colleagues and Alums

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

• Chipper Boulas - Vice President of Corporate Strategy, eBay
• 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; Carnegie Mellon University Trustee, 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]
• 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 - Assistant Deputy Director National Intelligence (ADDNI), Strategy, Plans, and Policy, ODNI
• Andrew Turnbull - Member, House of Lords (upper Parliament), United Kingdom (2005-); Head of British Civil Service (2002-2005)
• 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.

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 12 January 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, and then asserts two statements: that these programs reveal that many contractors are involved in various intelligence programs of which the media and parts of U.S. Government have now questioned the legality; and that the apparent (assertion made by Shorrock) unsuccessful nature of the programs reveals a lack of competence by both NSA and Booz Allen.^[63]

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 Accounting 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.^[64]

References

See also

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

External links

• Booz Allen Hamilton official website
• strategy+business magazine
• Booz Allen Hamilton official German website
• [4]
• 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