The last time we spoke with Alion CEO Bahman Atefi, his company“™s run rate was about $740 million. Two years later, that rate has climbed to $770 million. Accompanying that growth has been dramatic change. “Today close to half our business is in support of the Navy, naval architecture, and marine engineering,“ says Atefi. “I fully expect that business will continue to grow.“ At a time when industry is wrestling with OCI and inherently governmental functions, see how Atefi is managing to ensure that Alion stays relevant “” and comes out ahead.
“The key is to provide challenging work, a good work environment, plus mentoring of new hires.” “” Bahman Atefi, CEO, Alion
ExecutiveBiz: Last we spoke, you said no additional acquisitions were in the works. Is that still the case?
Bahman Atefi: Yes, large acquisitions, as you know, require access to the credit market, which has been tight. The market is a lot better today than six months ago, but it still has a ways to go before we can access it for large acquisitions.
ExecutiveBiz: What can you advise industry to retain top technical talent?
Bahman Atefi: The key is to provide challenging work, a good work environment, plus mentoring of new hires. We invest millions in research and development, which provides one of several avenues for our employees to work on state-of-the-art projects. Another critical item that most employees “”especially the younger workforce “” demands is continuous education. We“™ve created what we call Alion University where we offer over 3,000 online courses that can be accessed anytime. Finally, employee ownership is an attractive feature of our company.
ExecutiveBiz: Only a handful of government contracting companies have ESOP status. How has it helped with company retention?
Bahman Atefi: ESOP helps employees feel as if they own a piece of the company; they connect the end result of their work with the price of shares. In our case, all ownership is, essentially, through our retirement fund; it adds another layer of importance “¦ that whatever employees do to help the company ultimately improves their retirement fund.
ExecutiveBiz: What specific actions can you offer those in industry facing questions over OCI?
Bahman Atefi: If you provide hardware to a customer you might be conflicted providing advisory services. Some of our customers declared this a few years ago and others are beginning to do the same. At the end of the day government organizations are asking their support contracts, in effect, to pick a major: to decide which area they want to support. On certain close areas you might be able to write OCI mitigation plans but with more difficult issues it may not be so easy.
ExecutiveBiz: There will be winners and losers with OCI. Alion appears to be on the winning side. Do you think that will impact the industry as a whole?
Bahman Atefi: Yes, I think so. We“™re on the R&D and engineering sides, so we have increasingly seen procurements where a hardware producer might have had a prime contract on advisory support programs, and when the re-competition comes they can“™t take a prime role, they have to take a sub role. We have been a beneficiary of that.
ExecutiveBiz: What new markets will you be pursuing?
Bahman Atefi: Alion is going to stay focused on high-end research and development. That said, we have a strong presence in several emerging areas. For example, reset “” that“™s the refurbishment and redesign of equipment that“™s either gone through the war or doesn“™t work as it was intended “” is becoming a substantial part of our business. Our naval architecture and marine engineering services are high areas of growth. Our materials and manufacturing reliability analysis related to reset are high areas of growth as well. Finally, our modeling and simulation business is an area of growth for the Department of Defense.
ExecutiveBiz: On a personal note, we often see you getting in an afternoon run around Tyson“™s Corner. Tell us about your passion for running.
Bahman Atefi: I pretty much run everyday not just for exercise but as a form of relaxation. It“™s my quiet time when I can clear my head and think straight. I try to squeeze in a run sometimes early in the morning, at lunchtime, or after work. It just feels great afterwards.
ExecutiveBiz: Do you avoid hot days?
Bahman Atefi: Hot days differentiate men from boys.