Edward Bersoff established his reputation as a visionary leader in the government market when he founded BTG Inc. in 1982.

After he sold the company in 2001 to Titan Corp., Bersoff followed a path familiar to many former chief executive officers — he advised start-ups, served on corporate boards and professional organizations, and helped information technology companies expand.

Then, in 2005, Bersoff and a group of investors formed Federal Services Acquisition Corp., a publicly traded company created to buy businesses in the civilian and defense sectors. The targets were midsize companies. “We didn’t want to go through the nurturing process of a small company and growing it incrementally over time,” he said.

In April 2006, the investors bought Advanced Technology Systems Corp., of McLean, Va., for $124 million. Since then, they’ve closed three acquisitions and reported revenues of $100 million.

According to the group’s original plan, ATS executives would remain, and Bersoff and his colleagues would form the board of directors. But not everything went according to plan. Bersoff discovered that what the owners really wanted to do was retire.

So when the sale was completed, the logical thing for Bertoff to do was to step in and lead the company. “Now we’re kind of on a roll,” he said, “so here I am the back in the driver’s seat again.”

BIG PICTURE VIEW
Bersoff’s years as an IT adviser and corporate board member have kept him abreast of the major policy changes in the government sector, but many of the issues are the same as when he ran BTG. “There always have been funding issues, there are always continuing resolutions and procurement practices that change,” he said.

One positive development he sees is a greater willingness on the part of government to partner with the private sector than a decade ago.

As chairman, president and chief executive officer of ATS, Bersoff has led the company through several acquisitions while keeping it focused on existing government contracts. Many of those contracts are long-term relationships that ATS has had with the Defense, Homeland Security, and Housing and Urban Development departments.

ATS has also won new government contracts worth more than $52 million from the Labor, Veterans Affairs and Education departments, the last as a subcontractor on Education’s new $400 million bundled contract won by Perot Systems Government Services.

MORE ACQUISITIONS AHEAD
In February 2007, ATS purchased Reliable Integration Services Inc., a woman-owned defense contractor. Valerie Perlowitz, president and CEO at Reliable, has known Bersoff for years, and she signed on as senior vice president at ATS. ATS also acquired Potomac Management Group, a provider of maritime security consulting and IT, in September, and Number Six Software Inc., an applications development and IT provider, the following month.

Bersoff has worked to overcome the tensions that normally arise when combining company cultures to create a unified, cohesive organization, Perlowitz said. “We’ve spent a lot of time increasing communication to make sure people are aware of what’s going on.”

“The diversification that we have in various levels of government — state, local and federal — as well as in the commercial sector really positions ATS well to be very successful in our plans for next year and beyond,” she said.

ATS’ business strategy in 2008 and for the foreseeable future will be to continue to enlarge the company, Bersoff said. “We are going to make additional acquisitions in ’08. I don’t know what they are yet because they’re not on the table. But we were pretty aggressive in ’07, and we plan to be equally aggressive in ’08.”

“We’re looking at good, robust companies that have strong market niches,” Perlowitz added.

Bersoff wants ATS to increase its footprint in the intelligence and defense communities, which now account for about 25 percent of the company’s revenue, he said. He recently hired Jim Russell, a former colleague at BTG, to lead ATS’ business development effort. “He has a strong background in intelligence, as do I. Our plan is to build in that marketplace,” Bersoff said.

The company also will try to expand in the “the infrastructure side, the knowledge side, of defense as opposed to the hardware side of defense, which is where the money is being spent at the moment,” he said.

SAFE GROWTH TARGETS
Overall, his plan is to establish ATS as a solid midsize government contractor with no designs on challenging the large integrators or positioning ATS for a potential purchase. Bersoff’s goals are to reach $250 million in revenue in three years and $500 million in five years.

Moreover, he rejects the contention of some industry experts that the best contracting opportunities in today’s government market go to large contractors.

“Being a mid-market integrator is like playing tennis in the dead-man’s zone. You can go there, but you can’t stay there long or you lose,” said Robert Guerra, partner at Guerra Kiviat Inc., which specializes in government contracting. “In this buy-or-be-bought era, I think the better strategy is to build value as a mid-market player and [then] sell to a large integrator as an exit strategy.”

Bersoff disagrees. “Like everything else, there’s pros and cons,” he said. “All things considered, I’d rather be a $150 million company in this marketplace than a $30 million company in this marketplace. I’ve got far more reach, I’ve got far more capability and resources. Yes, I’m not Lockheed, I’m not Northrop Grumman, and that’s OK.”

He said ATS will succeed because its clients will recognize it as a well-managed company that is responsive and innovative and delivers on its promises. “There is so much business that I think those that complain about their lot in life are really complaining about their inability to build their business,” Bersoff said.

At least one industry expert is convinced that Bersoff’s triple-A reputation is well-deserved and that his plans for ATS are not unreasonable. “There’s still a lot to be gained from being in the so-called mid-market,” said Paul Serotkin, president of Minuteman Ventures LLC, which advises clients on mergers and acquisitions. “His track record is excellent,” Serotkin said. “He’s a master acquirer.”

And for Bersoff, it also is fun being a CEO again. “There is certainly a very rich experience being back in an active management role,” he said. “And it’s certainly invigorating. It keeps you busy, and it keeps you young, and it’s exciting.”

David Hubler (dhubler@1105govinfo.com) is an associate editor at Washington Technology.