Yes, Virginia, There Are More Contractors

Despite years of grumbling about the apparent takeover of government by contractors, their numbers didn't really spike until 1999-2000, as agencies spooked by the Y2K computer conversion problem turned outside for help. A second bump came in late 2001 with the Sept. n attacks, and the upward trend

"Structure and Dynamics of the U.S. Federal Professional Services Industrial Base 1995-2004," a May report by the Defense Industrial Initiatives Group of the Center for Strategic and International Studies in Washington, also shows that the total value of services contracts grew $65 billion between 1995 and 2004, from $102 billion to nearly $167 billion. What's more, the number of professional services contractors, which remained flat at about 45,000 between 1995 and 2001, blossomed by 86 percent to 83,000 between 2001 and 2004.

The lamest segment in the market was administrative and management services, with $42 billion in contracts in 2004. The fastestgrowing segment was information and communications, which had a 14 percent compound annual growth rate during that time. Administrative and management services grew 9 percent a year.

In 1995, $360 million in contract awards was enough to win a firm 20th place among services contractors. In 2004, it took $i billion in contracts to buy the No. 20 slot. The major new faces in the Top 20 are huge engineering firms. Just one, Bechtel, appeared in the top tier in 1995. But by 2004, Bechtel was joined by Halliburton, Fluor and BWXT, all of them large players in Iraq reconstruction.