Booz Allen Hamilton (NYSE:BAH) is today the most profitable company specialized in national intelligence, reporting revenues in March 2013 of $7 billion and a net profit of $219 million. Booz Allen Hamilton Holding Corporation (the complete name of the company) is a consulting firm that during the Second World War helped the U.S. Navy detect and combat German submarines.
In the ’40s, before the attack on Pearl Harbor, the U.S. Navy turned to consulting company Booz, Fry, Allen & Hamilton, as it was called back then, to find a solution to fight the German submarines that could not be detected. Consultants from Booz developed a special system with sensors that was able to locate German submarines and helped create an attack strategy. With the help of consultants from Booz, the Allies managed to sink by end of the war most of the German submarines.
The project started a long collaboration between the company and the government. In 2008, Booz Allen Hamilton separated from its commercial consulting operations through a newly established division, Booz & Co., and focused increasingly more on government contracts. Booz Allen Hamilton is owned by the investment fund Carlyle Group.
Almost all of the company’s revenue comes from contracts with the U.S. government, and around a quarter – $1.3 billion – comes from contracts with major U.S. intelligence agencies. Among the most important competitors, such as Science Applications International Corp., CACI, and BAE Systems, Booz Allen Hamilton is the largest beneficiary of the explosion of government spending on intelligence contracts in the last decade. Almost 70% of the intelligence budget for 2013 is spent on outsourced services.
James Clapper, top adviser on intelligence services of President Barack Obama, is a former executive at Booz Allen. Vice president of the company, Mike McConnell, former vice admiral, was director of the National Security Agency during the administration of President George W. Bush. Of the 25,000 employees of Booz Allen Hamilton, 76% have classified clearances and half of them have top-secret clearances.
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