PAE chief says Biden administration could bolster company's State Department work

By Marjorie Censer  / November 25, 2020

The chief executive of PAE says President-elect Biden's promise to reengage internationally could lead to growth in the company's State Department work.

The State Department remains PAE's largest customer, even as the company has moved to grow its defense and intelligence work. In an interview with Inside Defense this week, John Heller, PAE's longtime CEO, said the "outlook is very positive."

There's a "really exciting outlook for the next four years for us," he said, noting the company also expects its Department of Homeland Security work to grow under the new administration.

The State Department made up close to one-quarter of PAE's sales before its two most recent acquisitions, both of which closed this month. PAE bought both CENTRA Technology and Metis Solutions , which focus on work for intelligence and national security agencies.

Heller said the company has focused its acquisition strategy on using its purchases to grow its addressable market.

Metis, for instance, added eight indefinite-delivery, indefinite-quantity contract vehicles.

Heller told Inside Defense the company will take a pause from acquiring as it works to integrate its two most recent deals.

"We've got our hands full to work with these two teams," he said. "There's a lot that we can accomplish."

Meanwhile, he acknowledged COVID-19 has affected the business, putting some contracts on hold as travel is restricted. Earlier this month, in its most recent earnings report, PAE said the pandemic took a $53 million toll on sales during the quarter.

"These impacts were primarily driven by disruptions to logistics operations and by limitations on the ability of PAE employees and subcontractors to access facilities to perform on customer contracts," the contractor said.

But Heller said the company has also seen an opportunity to win work related to the pandemic.

"Given the work that we have done outside the United States to support humanitarian efforts, we have great expertise," he said. "We have been able to win a lot of COVID contracts."