proposal to the Department. In August 2003, the Department notified us that it had determined that we are in the competitive 

range for award, and that negotiations would begin shortly to be followed by the Department s request for submission of final 

proposal revisions and an award determination. We anticipate that the Department will make a decision on the procurement 

in October 2003 and believe we are positioned favorably because of our performance record with the Department. However, 

there can be no assurance that we will be awarded the new contract for Common Services to Borrowers. 

In May 2003, the Department provided public notice that it intended to enter into negotiations with us to modify our existing 

contract for the purpose of revising the period of performance for a period of up to 36 months, with the use of appropriate 

options, through September 30, 2006. The Department further stated that this contract action would be on a sole source basis 

and would accommodate a prompt and successful transition to the Common Services for Borrowers vendor. We are 

continuing discussions with the Department regarding this modification; however, the terms of the proposed modification 

have not been negotiated at this time and it is likely that the negotiations will not be completed by September 30, 2003, the 

date the Department stated it anticipated completing the contract modification. 

Systems Integration Services  

We provide applications development, applications outsourcing, network implementation and maintenance, desktop services, 

technical staff support, and training under long term contracts to the Department of Defense and civilian agencies, who generally 

either contract directly with us or through the General Services Administration for these services.  The General Services 

Administration performs the procurement function for many civilian and Department of Defense agencies.  Approximately 33% 

of these services for fiscal year 2003 were provided pursuant to six contracts with the General Services Administration.  We also 

provide our services directly to a variety of civilian agencies such as the Departments of Labor, Treasury, Transportation

and 

Energy, as well as NASA, FAA, the U.S. Postal Service, and the Federal Energy Regulatory Commission.  In addition to the 

above services, we provide command and control, communications, computer and intelligence, surveillance, and reconnaissance  

(C

4

 and ISR) systems integration services

to a variety of Department of Defense agencies such as Air Force Materiel Command, 

the U.S. Unified Commands,

and

the National Security Agency.  

Revenues by Service Line 

Our revenues by service line over the past three years are shown in the following table (in thousands):  

Year ended June 30, 

 2003  2002  2001 

Business process outsourcing 

$ 2,582,773 

  $ 1,942,865 

  $    974,244 

Systems integration services 

711,585 

678,804 

648,244 

Technology 

outsourcing 

492,848  

441,249  

441,071 

Total  

$ 3,787,206 

  $ 3,062,918 

  $ 2,063,559 

Client Base 

We achieve growth in our client base through internal marketing and acquisitions of other business process and information 

technology services companies. We have a diverse client base.  Within the state and local government segment, our clients 

include a wide variety of state governments, municipal governments and agencies. Within the commercial segment, we serve all 

of the major vertical markets that spend heavily on technology including the healthcare, retail, transportation, manufacturing and 

financial industries.  Within the federal government segment, our clients include both the Department of Defense agencies and 

various civilian agencies. Clients may be lost due to merger, business failure, or conversion to a competing processor or to an in 

house system. Our business with government clients is subject to various risks, including the reduction or modification of 

contracts due to changing government needs and requirements.  Government contracts, by their terms, generally can be 

terminated for convenience by the government, which means that the government may terminate the contract at any time, 

without cause, and in certain instances we would be entitled to receive compensation only for the services provided or stranded 

asset costs incurred at the time of termination. 

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