In the interim, Sotera will be led by William Cave and Laurie Villano as Interim Co-CEOs, who will also continue oversight of the Defense & Intelligence Solutions and Cyber Systems & Solutions lines of business, respectively.  Mr. Cave and Ms. Villano will be supported by Sotera’s Executive Leadership team, which includes Chief Financial Officer Jennifer Felix, Executive Vice President, Business Development and Operations Kirk Herdman, and Executive Vice President, Strategy and Corporate Development Ron Jones. This team will continue to focus on executing the company’s strategic vision and growth initiatives.

“John’s leadership over the last five years has been vital in building Sotera into a mission-focused, national security technology company capable of meeting our customers’ most challenging operational needs,” commented Matt Cwiertnia, Chairman of the Board, Sotera Defense Solutions.  “We are grateful for the experience, wisdom, and vast knowledge of the market he has brought to Sotera as our CEO, and I am pleased that the company will continue to benefit from his insight through his role on our Advisory Board.”

Dr. Hillen joined Sotera in 2008 and led it to become one of the leading mid-tier national security technology brands in the industry. In 2009, he led the organization through an initial public offering as Global Defense Technology & Systems, Inc. (NASDAQ: GTEC) and its subsequent purchase by an affiliate of Ares Management in April 2011. Under his tenure, Dr. Hillen also facilitated the company’s growth through four strategic acquisitions in 2010 and 2011, doubling the number of employees. 

HERNDON, Va., January 9, 2013 – Sotera Defense Solutions (Sotera), a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government, announced today that Rick White has been appointed as the company’s Chief Information Officer (CIO).  

As CIO, Mr. White will be responsible for architecting and implementing industry-leading IT solutions to enhance the company’s operations and will lead the development of innovative and differentiated solutions to help Sotera’s customers meet their mission-related information and technology needs.

John Hillen commented on Mr. White’s appointment, “Sotera has seen rapid growth in the technology and intelligence solutions segment of our business.  With growth of this nature, we must continue to demonstrate true technology thought leadership in our market space and enhance our ability scale our own IT and information systems infrastructure to meet the dynamic mission needs of our customers. Rick is ideally suited to lead Sotera in both of these aspects.”

Mr. White previously served as Sotera’s Vice President and Solutions Architect helping to design innovative technology solutions as part of several key proposal efforts while spearheading Sotera’s IT team. He is also an instrumental member of Sotera’s Technical Council where he currently serves as Co-Chairman.

HERNDON, Va., October 17, 2012 – Sotera Defense Solutions (Sotera), a provider of technology-based systems, solutions and services, was recently awarded a prime position on the $7 billion SSES NexGen contract vehicle issued by the U.S. Army Communications-Electronics Command (CECOM).

Sotera President & CEO John Hillen commented, “We are pleased to be awarded this prime position on the SSES NexGen contract.  This vehicle provides an excellent opportunity for Sotera and our teaming partners to deliver a wide range of services and solutions to improve the Army's ability to enable the warfighter to achieve success in even the most challenging environments.”

SSES NexGen is an indefinite delivery/indefinite quantity (IDIQ) contract vehicle through which CECOM will procure engineering and scientific support services for the CECOM Command Life Cycle Management Command (CECOM LCMC) Software Engineering Center (SEC) located at the Aberdeen Proving Ground in Aberdeen, Maryland.  The SEC provides life cycle software solutions and services that enable the warfighting superiority and information dominance across the enterprise.

About Sotera Defense Solutions, Inc.
Sotera Defense Solutions, Inc. (Sotera) is an agile, mid-tier national security technology company that delivers innovative systems, solutions and services. Sotera provides counterterrorism, cyber operations, intelligence, data analytics, C4ISR and force mobility solutions to our customers. 
 

Sotera President & Chief Executive Officer John Hillen has been elected Chairman of the Board of the Professional Services Council (PSC). The PSC is the national trade association of the federal government's professional and technical services industry. PSC's nearly 350 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds. The PSC Board of Directors is responsible for policy oversight and setting the direction of the association.

Dr. Hillen’s term runs through October 2013.

HERNDON, Va., September 19, 2012 –. Dr. John Hillen, President & CEO of Sotera Defense Solutions (Sotera), a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government, spoke at the recent Sequestration: Scenario Planning event hosted by the Greater Washington Board of Trade.

During his remarks, Dr. Hillen noted that Sequestration’s impact on national security budgets is an example of bad policy and bad governance that “will not do very much to fix long term budget problems, but certainly stands to cause a lot of policy harm along the way.” 

Dr. Hillen acknowledged that the nation is facing a series of fiscal crises that must be managed but noted that “applying Sequestration to national security in the name of affordability will severely degrade our military capabilities without making a recognizable difference in the long term budget picture.” Underscoring this point, Hillen commented, “If we have learned anything from history, a peace dividend never delivers peace for long, but it always delivers unpreparedness.” 

To make the case for Sequestration as bad governance, Dr. Hillen commented on the haphazard manner in which the mechanics of Sequestration have been handled by the government stating, “as a result Sequestration is an unguided missile that could cut programs regardless of their priority or connection to strategic priorities, international obligations, or the nature of our security challenges.”

Regarding his advice for those seeking to prepare for the new budget environment Hillen encouraged business leaders to speak up against the cuts, be proactive with government customers, and use scenario planning to understand how Sequestration might affect their business.

Before I get to some specific thoughts on Sequestration, and especially how it might affect the companies in our region and the economy in general, I want to approach this question first from a broader strategic perspective, focusing especially on National Security since that is my field of expertise. 

I do this pointedly - and the point here is that we as a government have not done this.  Approaching the issue from the broader strategic perspective does not confuse the means and ends of policy making.  Means such as budgets and policies are tools that are meant to serve the broader ends of the goals of American policy.   Our government has not taken this broad perspective in its approach to Sequestration.  Instead, we have a strategically pointless budget mechanism that was meant to force an outcome to a means debate…and instead it has become the strategy itself.  It is bad governance, and it will lead to bad policy.  And the irony is that it will not do very much to fix long term budget problems, but certainly stands to cause a lot of policy harm along the way.

As you know, the Budget Control Act will cut about $55 - $60B a year from Defense Spending.  This amounts to around a 10% cut for DoD year over year - these cuts being in addition to the almost $500B of cuts already planned to occur over the next decade by the Pentagon.

Now, in my other lives, I’ve been a defense planner, an assistant secretary of state dealing with military strategy and a think tanker who co-wrote and edited a book on alternative defense strategies.  So I can tell you from experience that there can be very responsible and logical strategic reasons to cut defense spending by that much. 

For instance, the U.S. could lessen its ambitions and goals on the world stage – and that could mean that the country needs less national security because we are aiming to do less with it.  Some of this kind of reasoning will come into play with the planned drawdown in Afghanistan but on the other hand Sequestration is aimed at the base DoD budget, not the overseas contingency accounts so pulling back in Afghanistan doesn’t really factor in as a Sequestration rationale.  The cuts will come from long term capability.  To date, the U.S. has not announced new plans or a changed national security strategy that would redefine our interests or lessen our ambitions to defend them.  So, a possible reduction of our role in the world state is probably not the strategic driver of these cuts.

Another reason to logically cut defense could be because the international security environment has become that much more benign to America itself, U.S. interests abroad and to the many allies whom we are obligated by solemn treaty arrangements to defend.  Or, alternatively, that our allies and friends have become that much more capable of sharing in the collective responsibilities of global security. We remember from 20 years ago the defense drawdown in the aftermath of the collapse of the Soviet Union and the end of the Cold War.   The threat picture had dramatically changed and we changed our national security structure to deal with the new nature of the security environment.

Unlike the many voices that called for a peace dividend then  - from left, right, and center -  not many intelligent observers today - from any political viewpoint - seem to be making the case that the world is getting more stable, less dangerous and more conducive to American interests such that the world benefits from demonstrably less American power and military capability.  And the rapidly shrinking capabilities of our allies don’t seem to offer much relief on the teaming front.  So, a dramatic shift in the nature of the international environment towards the good doesn’t seem to be a driver for the additional defense cuts.

A third good reason for cutting defense could be that we’ve found new and cheaper ways of defending the same interests, accomplishing the same goals and doing it all within a still challenging threat environment.  In this line of reasoning we simply need less defense to do the same things.  We’ve gotten more efficient.  While changes in tactics and especially technology have made many military missions more potent and effective, overall the shift to smaller high tech platforms for some missions has not produced savings on the scale that Sequestration could rationalize.  In the past decade the military has become more effective but not more economically efficient – mostly because of rapidly rising personnel and health care costs. So, efficiency doesn’t seem to be a driver.

Or, if you’re thinking comprehensively, you could take a combination of these dynamics and a few others and come up with a perfectly defendable case for cutting defense by an additional 10% per year. 
But let’s not fool ourselves; Sequestration is rationalized only one basis – affordability. Let’s examine that.

Let me say up front that like most Americans I’m keenly tuned into to the series of fiscal crises faced by the country and our government.  So I’m not knocking the importance of applying the affordability lens to defense, or any other government spending.  Even though national defense is constitutionally the first task of our federal government – and importantly a role that only the federal government can play - it must be affordable as well as tied to our strategic ambitions and the nature of the international political arena.  But the problem with applying Sequestration to national security in the name of affordability is that while the cuts will severely degrade our military capabilities, they will not make a recognizable difference in the long term budget picture.   

Let’s look at the math.  In the period between 2012 and 2013 in which the Budget Control Act cuts defense spending by $55B, mandatory entitlement spending and interest on the debt will rise almost $75B.  So in year one of Sequestration our defense savings are erased by the commensurate increase in other spending in under nine months.  In year two of Sequestration, a year in which mandatory entitlements and interest on the debt (assuming a historically low interest rate) will rise $154B, our defense savings are overcome in just over four months; the next year, three months.  And, as I’m sure you all can imagine, it gets worse.

So, in the very short term, let alone the medium and long, we get precious little budget balancing and certainly almost no long term federal debt benefit from Sequestration applied to the DoD.  Defense is only 20% of the federal budget (half of what it was 25 years ago) and going down fast as a percentage of federal spending.  If we are hoping to balance the annual federal budget deficit or effect the $16T debt through defense cuts, we’re in for a surprise.

In the meantime, in the absence of any strategic rationale in a dangerous world, we will have stripped the military of real capability.  By the way, this is not just for warfighting or responding to contingencies.  The shape of the strategic environment in which all decisions are taken is profoundly affected by the unique role the U.S. plays in global security – a strategic environment we have shaped to American interests since the end of World War II.  I was once reminded by a Southeast Asian diplomat that even local trade deals in Asia are affected by the perceptions of future U.S. military power dedicated to the region.

The decline in real military capabilities is aggravated by the fact that many of the personnel accounts (the majority of the DoD budget) are off limits to Sequestration and so the cuts largely need to come from procurement, R&D, operations and maintenance and other accounts that produce real capability – today and for the future.  And if we’ve learned anything from history, a peace dividend never delivers peace for long….but it always delivers unpreparedness.  Every U.S. peace dividend in the past 100 years has been followed by a moment or period of strategic unpreparedness that has unnecessarily cost American lives. 

But we’re not thinking that way – a sensible and coherent way to determine how much defense our country needs and for what.  Instead, we have an increasing chorus of disappointment about Sequestration from the very political leaders that could do something about it – but haven’t.  

Even so, if you think we need less defense or discretionary government spending for any reason, you could argue against my premise that this is bad policy.  I accept that.  But it’s very hard to argue that this is not bad governance.  The mechanics of the way Sequestration has been approached by the government (let alone the way it is likely to be implemented) and the concomitant ability of companies to make decisions based on what the government will do have been haphazard and downright irresponsible in some places.

We’ve had government departments flatly denying that they intend to prepare for Sequestration cuts at all – thus ensuring a panicked rush to meet the obligations of the Budget Control Act if a lame duck Congress does not address this after the elections.  We’ve had the Department of Labor tell companies that issuing WARN Act notices to employees would be inappropriate, given the lack of certainty about how the budget cuts would be implemented.  Now, one might be struck by the incongruity that a part of our government doesn’t know when, what, or how it plans to follow its own laws – but at least that’s honest.  What is potentially more damaging if adhering to this guideline is that it is not clear that the Department of Labor has the jurisdiction or standing to come in between the perhaps inevitable lawsuits directed at employers from employees and States if those same companies do not follow the WARN Act.  All in all, not a banner moment for good or clear governance.

Even if we got all that sorted – in other words both planned for it with transparency and visibility at the agency level AND sorted out the conflicting guidance for the legal responsibilities of companies affected by it, we still have the indiscriminate way in which Sequestration is to be implemented.  As the Office of Management and Budget guidance from a few days ago states, cuts will be made vertically on a pro rata basis down to the program, project, and activity level – with flexibility of how to apply the cuts only beneath those levels.  So, back to the point about strategic coherence in defense planning: Sequestration, even if positively desired (as opposed to negatively implemented as a result of the failure to reach a budget deal), is an unguided missile that could cut programs regardless of their priority or connection to the strategic priorities, international obligations, or the nature of our security challenges. Former Secretary of Defense, Robert Gates, who was a stickler for strategic prioritization and judgment, yesterday called this approach, “moral cowardice.”

So, what should companies be doing about this?  First, we need to speak with even greater urgency to our elected representatives.  The bar on coherent budgeting and governance has been so manifestly lowered over the past fifteen years that we have all been congratulating ourselves on the 6 month continuing resolution just passed.  We need to hold ourselves to a much higher standard than that.  A world does exist where Congress can pass appropriations bills on a regular and predictable basis. 

Second, be very proactive with your government customers.  They are likely as confused as you are about the Sequestration details insomuch as they may apply to their programs and you should work with them to flesh out work plans and ideas that could be used under a number of circumstances and within the bounds of your current, or even future contracts.  Contract vehicle flexibility will very much come in handy in this environment. I would also say to check your contract terms carefully.  One can foresee instances where sudden shifts in funding due to Sequestration cuts could bump against contractual obligations under which your company is already committed.

Finally, on your own end, use scenario based planning to look at the possible effects on your business.  Business planning needs some certainty – even bad news certainty is better than no certainty.  Without a range of certainty, we cannot raise capital, do deals, plan investments, adjust cost structures, gauge our work force plans and policies or make almost any decision.  All businesses operate in some degree of uncertainty – planning is, after all, about a future that has not yet happened.  But, on the other hand, if the government is to have a cut of this magnitude, one would think that the specifics of it could be made more readily apparent earlier on in this process.

I wish I had better news for you, but I don’t.  We are where we are.  Many of you may have seen the very comprehensive George Mason University study about the effect of Sequestration on the local economy – including the projected loss of the equivalent of 450,000 jobs in DC, Maryland, and Virginia.  This and similar studies have gotten our elected leaders’ attention, but not so much as to prompt an extension of the very short session in Congress this fall. 

I’ve recently heard an influential Congressman say that while he knows of no concrete plans to address Sequestration in this or a lame duck session of Congress, he has great hope that it will not happen.  I myself wonder if this is akin to what Churchill is reported to have said about 3rd marriages:  the triumph of hope over experience.  We’ll see.

Thank you and I’ll take questions.

HERNDON, Va., September 10, 2012 – Sotera Defense Solutions (Sotera), a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government, today introduced Jennifer H. Felix as the company’s new Executive Vice President & Chief Financial Officer (CFO). 

Sotera’s President & CEO, John Hillen, commented on the addition of Ms. Felix as the company’s CFO, “Jennifer is both an impressive financial leader and a star executive in the government contracting sector. Sotera has experienced fast growth in the technology solutions segment of the defense and intelligence community and we continue to seeking new and innovative ways to expand our presence in the national security market. Having a CFO with the right breadth of experience to champion Sotera’s growth into the $500M+ range while navigating the complex and dynamic national security market is a must for our organization.  We have found that person in Jennifer and we look forward to continuing our growth trajectory under her guidance.”  

Ms. Felix brings to Sotera the knowledge she has gained from 20 years of experience as a financial professional in the government services and technology sectors. Her outstanding career includes serving as Controller of two private equity-backed companies, Deltek, Inc. and Vangent, Inc.   During her tenure with those organizations, Ms. Felix took Deltek through an initial public offering and helped Vangent secure a successful sale to General Dynamics.  

As Vice President and Corporate Controller for Vangent, Ms. Felix was retained in the General Dynamics/Vangent merger for a corporate position where she took on the role of Financial Planning Director in charge of all mergers & acquisition (M&A) for General Dynamic’s largest and most acquisitive business segment, IS&T, with over $11 billion in technology and services revenue.  She is well versed in leading financial operations improvements, including financial systems and complex M&A integrations.

While serving as Vice President of Finance at Deltek, she built and directed the company’s accounting and finance support functions. Throughout her career, Ms. Felix has established herself as a leader in developing and implementing best-in-class processes to help her organization achieve exceptional accounting, financial planning and analysis, budgeting, forecasting and dash-boarding. She has also demonstrated her ability to serve as a positive change agent in organizations and, during her time at American Management Systems (AMS), Ms. Felix successfully transformed a very decentralized finance organization into one cohesive unit.  Early in her career, Ms. Felix spent 8 years with the public accounting firm Deloitte & Touche working with high growth technology companies.

Ms. Felix is a graduate of the University of Maryland and is a member of the American Institute of Certified Public Accountants and Virginia Society of CPAs.

HERNDON, Va., August 2, 2012 – Sotera Defense Solutions (Sotera), a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government, today introduced Laurie S. Villano as the company’s new Senior Vice President of its Cyber Systems & Solutions (CSS) business headquartered in Annapolis Junction, Maryland.

In her new role, Ms. Villano will lead over 300 national security professionals focused on delivering a broad range of cyber security solutions to Fort Meade based customers.  Ms. Villano will also work with Sotera’s senior leadership to implement a strategy to propel the company’s growth and momentum in the cyber security market.

Sotera’s President & CEO, John Hillen, commented on Ms. Villano’s new role, “Growing our capabilities and our footprint in the cyber security arena has long been a key part of Sotera’s business strategy.  With her vast experience in software engineering, design and development combined with her knowledge of the customer and their unique mission needs, we believe that Laurie is the right person to lead that effort.” 

Ms. Villano brings to Sotera the knowledge she has gained from almost 30 years of experience with the DOD/Intelligence Community customer.  Most recently she was a Senior Vice President with Booz Allen Hamilton providing market and technical leadership for the company’s system and software development contracts in the Fort Meade area.

Before joining Booz Allen Hamilton, Ms. Villano was a Vice President at BDM International in Columbia, MD leading the company’s regional office providing software and systems engineering as well as transcription and analytical support services to the Fort Meade customer. 

Ms. Villano is active in several professional organizations, including AFCEA, where she previously served as Chairman of the Board and President of the Central Maryland Chapter.

Sotera President & CEO, John Hillen commented, “We are very proud to have raised this money to benefit our military heroes and are grateful to all of our sponsors and participants. Supporting the Wounded Warrior Project™ who provides such valuable services to the men and women of America’s military is an extension of Sotera’s dedication and passion to the national security mission of our customers.” 

The tournament, part of Sotera’s Corporate Responsibility Program, was held on June 15, 2012 at Westfields Golf Club in Clifton, Virginia.  Sotera would like to thank the tournament participants and sponsors - Ares Management, UGL Services, Arnold & Porter, HITT, Holland & Knight, Miles and Stockbridge, Crawford Advisors, Huffman, Riley and Kao, Venable LLP, McGladrey and the McLean Group - who helped to make this fundraiser possible.