Vangent Inc. has been providing data management and business process outsourcing services through more than half a century of corporate acquisitions and name changes. Two recent contract wins keep the company on track as a major provider of outsourcing services to the federal government.
Vangent was one of nine government contractors named in March to the General Services Administration’s $2.5 billion Multichannel Contact Center Service contract, known as USA Contact.
Also last month, the Labor Department awarded Vangent a 12-year contract worth $94 million to upgrade the agency’s paper-based pension and benefits reporting collection system.
In 1998, the company, then named National Computer Systems Inc., won the original contract to design, build and manage Labor’s Employee Filing Acceptance System, or Efast, to meet the requirements of the Employee Retirement Income Security Act (ERISA) that protects workers’ benefits and pension plans. The two awards came one year after New York venture capital firm Veritas Capital paid $600 million for Pearson Government Solutions Inc. and changed its name to Vangent.
“We’re used to going after ‘big-game money,’ winning large deals,” said Mac Curtis, Vangent’s president and chief executive officer.
Under ERISA, companies with at least 50 employees must report annually on the status of their retirement plans, including the number of participants, retirees and beneficiaries. They must also show fund balances for January and December of each year to prove to government auditors that the funds are being managed properly, Curtis said.
In addition to Labor, the filings are sent to the Internal Revenue Service, Social Security Administration and Pension Benefit Guaranty Corp. for verification.
The system was designed to accept and scan only approved machine-printed and handprinted forms using open-systems architecture and commercial products, such as Microsoft Windows, Oracle and Captiva.
“All of that is still being done paper-based,” Curtis said. He estimated that the system is used by about 600,000 companies for pension and employee benefit plans worth about $6 trillion.
With a development installment of $15 million, about 60 Vangent employees are designing the new electronic version, Efast 2, which will feature a secure Web portal.
“It’s a 21-month development cycle, and then we’ll help run the system over the next 10 years,” Curtis said.
“Efast 2 will provide a completely electronic portal for the receipt of about 1 million annual reports filed by employee benefits plans,” said Alan Lebowitz, deputy assistant secretary of program operations at Labor’s Employee Benefits Security Administration.
EBSA estimates that the new system will save about $10 million annually, he said. The system is designed to catch errors on forms before the filings are processed, which is expected to account for some of the savings.
Vangent is partnering on Efast 2 with IBM Global Services, Buccaneer Computer Systems and Services Inc., HeiTech Services Inc., Natek Inc., and Riojas Enterprises Inc.
USA Contact is a 10-year governmentwide acquisition contract to improve public services. Like FirstContact, which it replaced, USA Contact is part of GSA’s USA Services e-government initiative.
Government agencies, American Indian tribes and tribal organizations, the District of Columbia government, wholly owned government corporations, and qualified nonprofit agencies will be able to use the contract to improve communication with the public, especially during crises or disasters.
Task orders might include setting up a call center to distribute information on taxes, Social Security, environmental issues or illnesses. Much of the contract involves customer relationship management, which is a Vangent core capability, Curtis said.
The USA Contact program will put Vangent in a good position to support other agencies with call-center operations, responding to people’s inquiries through a variety of communications channels, including telephone, interactive voice response, e-mail, fax and Web chats, he said.
Vangent is doing similar work now with the Centers for Medicare and Medicaid Services and the Centers for Disease Control and Prevention. Curtis said he hopes USA Contact will provide seven or eight large task orders a year. To win those, the company will compete with Convergys Corp., CSC-Datatrac, EDS Corp., ICT Group Inc., L-3 Communications Inc., Lockheed Martin Aspen Systems, TechTeam Government Solutions Inc. and TeleTech Government Solutions LLC.
Vangent is in a better position than a lot of its competitors to win USA Contact awards, said Tervinderjit Singh, Singapore-based research director of business process outsourcing at Gartner’s Technology and Service Provider Research Division. The company is experienced in providing outsourced customer management operations, and it has good Spanish-language capabilities because of its work and offices in Mexico and Argentina, he said.
“If they continue to target key government and key commercial accounts, they are in a good position to ride out the current economic uncertainties,” he said.
As a midsize company, Vangent also is a tempting takeover target, Singh said. But that is nothing new for Vangent. It was founded as Measurement Research Center, a private, nonprofit test-scoring company, at the University of Iowa in 1953.
National Computer Systems acquired MRC in 1998 and won the first Efast contract. NCS’ Government Services Division relocated to Arlington in 1999, and Curtis became vice president and general manager.
Pearson plc, a media conglomerate, bought NCS in 2000. The government division, led by Curtis, was renamed NCS Pearson. The name was changed to Pearson Government Solutions three years later, and the company became Vangent in 2007.
The company had $510.1 million in sales in 2007; 79 percent came from the government.
David Hubler (dhubler@1105govinfo.com) is associate editor at Washington Technology.
