VSE

VSECorporation was featured for the first time 

in the Forbes magazine annual “200 Best 
Small Companies in America” list with the 

phenomenal ranking of #4.

Forbes considered small businesses with revenue of $5 million to $750 million 
who had sustained sales and net profit growth over 12-month and five-year 
periods. Forbes’ judging criteria also included earnings data, management 
turnover, and acquisition activity.

“Making the Forbes list means I made the right choice to work for VSE when I retired from the Navy. Onward and upward!”  
—Jon E. Rench, ELD QC / FHSC, Long Beach, MS

“When I started at VSE in 1961, there were approximately 20-some employees and I wasn’t sure if the company would last. It’s pretty 
amazing to have over 1,000 employees and reach this milestone.”  
— Elliot Goodman, ITSD, Energetics Incorporated, Columbia, MD

“Effective communication, training, and resourcefulness have welded our financial team into a cohesive working machine. My manager’s 
leadership ability to maintain us all in one accord is extraordinary. That is what makes our financial team so unique. I feel this is truly an 
honor for our company.” 
— Marilyn Gonzalez, NAD Financial Analyst, Lexington Park, MD

“Based upon the character and work ethic of my co-workers, if VSE as a whole is a reflection of the model here at this site, I am somewhat 
surprised that we are only ranked fourth! Most likely, Forbes wouldn’t give us a top three position in our first year of recognition, as it 
would have embarrassed them that we hadn’t been noticed earlier. So in all actuality, we’re probably deserving of 1st. However you view 
it, the camaraderie we share here is unique as we drive toward our goals to create, sustain, and improve, and I wouldn’t care to have my 
career anywhere else.”  
— Marty Schuetz, ELD Data Coordinator, Weldon Spring, MO

“Making the rank of #4 out of 200 means that when I’m asked where I work, I’m proud to say ‘VSE.’ Congratulations to all!”  
— Joey Cadiere, ELD QC/Safety, Ladysmith, VA

“Congratulations to VSE Corp. I belong to BAV and am proud to have the opportunity to work for VSE Corp. I am currently working in 
Veracruz, Mexico, and have been here for three years on this project. Keep up the good work, VSE.”  
— James M. Hiskey, BAV, Mexico

 “This is a clear indicator and recognition of the hard work and commitment of the VSE professionals, at every level of the organization, 
over the past 5 years!”  
— James Fallon, GSD VP, director

“Sometimes being a field office can often leave you feeling disconnected; however, an achievement of this magnitude betrays that notion 
and hits home that the efforts of every VSE location, no matter their size or geography, is more connected than we realize. We may be a 
small company, but we are large as life people with big ideas—a true team in every sense, and I am immensely proud to be part of it!”  
— Elena Graupera, SELD office manager, Blount Island, FL

“Congratulations to VSE for obtaining this phenomenal ranking by Forbes. As a member of one of VSE’s subsidiary companies, it is truly 
heartening to know that the ‘mother ship’ is such a great company to be a part of. I appreciate all that VSE does for us at Energetics. 
Congrats again!”  
— Peggy Welsh, senior consultant, Energetics Incorporated, Washington, DC

“Recognition for a job well done. VSE Weldon Spring has worked very hard to get to where we are. I am proud of each of our team 
members and supporting staff and look forward to where we are going in the future. This accomplishment and recognition is a tribute to 
the hard work and dedication of our employees.”  
— Justin Brown, ELD site manager, Weldon Spring, MO

 
“Growing Towards Our Future”

The year 2007 was one of the most successful VSE Corporation has experienced in its 49-
year history. The Company reported revenues of $653 million, up 80 percent from 2006. For 
the first time the Company’s growing accomplishments were heralded in Forbes magazine’s 
annual ranking of the “200 Best Small Companies in America.” VSE was ranked in a 
prominent fourth place. The Washington Business Journal also recognized VSE as one of the 
fastest growing businesses during the past several years. 
VSE growth was supported in 2007 with the acquisition of Integrated Concepts and Research 
Corporation (ICRC). The purchase price was approximately $11.6 million in cash, with the 
potential for additional payments of up to about $5.8 million if certain financial targets are 
met during the next several years. Through the period of June 4 to December 31, 2007, ICRC 
recorded revenues of about $50 million. 
VSE substantially expanded its military equipment refurbishment services to the West Coast 
with the addition of multiple new facilities in California. New offices are now located in Los 
Alamedas, Barstow, Fort Hunter Liggett, Sacramento, Mare Island, Fresno, and Moffitt Field. 
A new office in College Park, GA, is also now in place to support the U.S. Army Readiness 
Command (USARC). VSE personnel have been managing USARC’s equipment modification 
work orders as well as coordinating the transportation of equipment in need of repair.
During 2007, VSE was named a prime contractor for the U.S. Army’s Field and Installation Readiness Support Team 
(FIRST) contract vehicle. In December, VSE was also selected as a prime contractor for the Omnibus III contract 
from the Program Executive Office for Combat Support & Combat Service Support. 
VSE added two new divisions during 2007. The new Government Services Division supports the disposition of 
property seized by U.S. government agencies during the course of their duties, and the Field Support Services 
Division repairs damages to mine resistance and ambush protected vehicles in austere environments.
VSE is proud of its continued growing support to the U.S. military around the world while also supporting the 
navies of friendly foreign nations. The year 2007 also saw VSE and subsidiaries developing and managing user-
friendly computer programs for the U.S. Social Security Administration’s visually impaired employees, as well as 
managing conferences within the nation’s capital for various energy or emergency response programs. 

Corporate Profile

VSE is a diversified professional services company established in 1959. The Company provides engineering, 
systems integration, scientific, and management IT solutions to customers in the defense, homeland security, law 
enforcement, energy, and environmental sectors. Headquartered in Alexandria, VA, VSE employs 1,223 personnel 
supporting clients across the United States and around the world.
Further information about VSE is available at the company’s website at www.vsecorp.com.

Stockholder Inquiries

VSE shares are traded on the NASDAQ Global Market under the symbol VSEC. Inquiries about stock ownership, 
dividends, and stockholder changes of address may be directed to our transfer agent at: Registrar and Transfer 
Company, 10 Commerce Drive, Cranford, NJ 07016-1340; or to VSE at: 2550 Huntington Avenue, Alexandria, VA 
22303-1499, Attention: Corporate Secretary. VSE Investor Relations can be reached by phone at (703) 329-4770.

Quality Systems Management

VSE’s policy is to provide products and services of the highest quality to meet the expectations and  
requirements of our customers, on time and at a fair price. VSE’s quality management system is registered to the 
ISO 9001:2000 standard.



Financial Highlights   

Revenues
($M)

Net Income
($M)

653.2

Earnings Per
Diluted
Share

($)*

Stockholders’
Investment ($M)

56.4

14.1

2.82

363.7

280.1

216

133.1

7.8

6.2

1.61

1.29

23

19.1

3.4

2

0.75

0.45

38.2

30.2

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

Y E A R

Y E A R

Y E A R

Y E A R

Funded
Backlog ($M)

Number of
Employees

Dividends
Per Share ($)*

Stock Price,
End of Year ($)*

48.84

408

1223

0.155

0.135

21.05

16.95

857

0.115

0.095

0.08

716

625

500

12.59

6.63

299

276

168

83

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

’03 ’04 ’05 ’06 ’07

Y E A R

Y E A R

Y E A R

Y E A R

Income Statement Data (in thousands, except share data)

Year ended December 31

Revenues

Net income

Earnings per share (diluted)

Weighted average shares (diluted)

Balance sheet data (in thousands, except percentages)

December 31

Total assets

Working capital

Stockholders’ equity

Return on equity

* Adjusted for June 2007 stock split

2007

% Change

2006

$

653,164

14,102

2.82

5,003,675

79.6%

81.1%

75.2%

3.2%

$

363,734

7,789

1.61

4,848,884

2007

% Change

$

171,771

24,756

56,376

36.9%

74.3%

3.5%

47.4%

43.0%

$

2006

98,535

25,646

38,236

25.8%

4

 
 
Letter to Shareholders

2007: Financial Results

After experiencing significant growth in revenues, earnings, and backlog in 2005 
and 2006, VSE continued to perform at a record pace in 2007 and generated an 
even better financial performance. Our annual revenues almost doubled in 2007—
exceeding $653 million—while net earnings exceeded $14 million ($2.82 per diluted 
share)—up from $7.7 million in 2006. With the increase in revenues and earnings, 
our return on equity for 2007 increased to almost 37 percent. We also saw increases 
in funded backlog, employees, and the number of customers we serve. We increased 
our cash dividend by 15 percent, and our stock price reflected these gains.
VSE purchased Integrated Concepts and Research Corporation (ICRC) in June 2007 
for an initial price of $11.8 million, with the potential for additional payments if the 
company meets certain financial targets during the next six years. 
The financial results reported for 2007 are consistent with the positive trend in 
VSE operations and results reported in recent years. VSE revenues have grown 
significantly as we have improved our ability to meet customer needs. With the increase in revenues, we have been 
able to allocate our corporate costs over a larger base and improve our margins on certain time and materials and 
fixed-price contracts.
As previously reported, during the fourth quarter of 2007 we received new contracts and delivery orders supporting 
both our Tanker Ballistic Protection System Program and the operations of our subsidiary, Energetics Incorporated. 
At the end of 2007, our funded backlog was approximately $408 million, compared to $299 million at the end of 
2006, and our personnel count increased to 1,223 employees, up from 857 at the beginning of the year. Based on 
these and other factors, and our sense of VSE’s favorable position in several of the markets we serve, we anticipate 
continued growth in 2008. We also continue to examine acquisition opportunities that have potential to support our 
growth in the years ahead. 

2007: Operating Achievements

VSE operations grew in 2007 as we established new facilities, acquired a subsidiary, added employees and 
developed new customer relationships. 
•  Our new Infrastructure and Information Technology Group was established in June when VSE acquired ICRC. 

ICRC is engaged primarily in providing the government with diversified technical and management services, 
including information technology, advanced vehicle technology, aerospace services and engineering, and 
transportation infrastructure services.



•  The acquisition of ICRC 

• 
provides VSE with an opportunity to expand  
   VSE and ICRC services into complementary  
   markets;  
• 

opens or expands markets in SMART  
vehicles, alternative fuels, large-scale  
port engineering development and security,  
and information technology services;  
adds approximately 200 technical and  
professional employees to VSE’s staff;  
and adds several long-term contracts to  

• 

• 
   VSE’s business base.

• 

• 

• 

ICRC’s revenues were about $50 million for 
the period of June 4 to December 31, 2007. A 
material part of the group’s revenue comes from 
a 10-year U.S. Department of Transportation 
contract awarded in 2003 for infrastructure 
services to the Port of Anchorage. 

ICRC’s Advanced Vehicle Technologies Division developed and tested three LASSO® (Land And Sea 
Special Operations) vehicles, which are high-capacity, six-wheel drive, all-terrain utility vehicles designed to 
specifically meet military challenges without requiring special training to operate. 

In our Energy and Environmental Group, our subsidiary Energetics Incorporated continued its high-level 
consulting services in the field of energy and environmental management. Energetics expertise lies in state-of-
the-art and advanced technology assessment, technical and economic feasibility analysis, technology transfer, 
R&D program planning, engineering studies, market assessment, strategic resource management, regulatory 
analysis, environmental compliance, and risk management. Energetics’ primary client is the Department of 
Energy, but it has been expanding its services during the past year to the Department of Homeland Security. 

•  Our International and Federal groups experienced successful years in 
2007, and their milestones are highlighted beginning on pages 9 and 
16, respectively.

2007: Other Notable Accomplishments

•  VSE was featured for the first time on Forbes’ annual list of the “200 

Best Small Companies in America.”

•  $6.1 million was invested in a new 40,625-square-foot expansion 
for Engineering and Logistics Division’s (ELD) Paint and Blast 
facility in Ladysmith, VA. The cost also includes new equipment and 
updates to existing facilities to accommodate our growing needs.

•  Production began on a new bi-monthly corporate magazine, the 

VSE Connection, to better keep our employees, stakeholders, and 
shareholders informed. It also serves to better connect our personnel 
at more than 50 locations. 

•  ELD maintenance shops in Ashland, VA, received their ISO 

certification; Long Beach, MS, received its first one year accident-
free safety award; and Alexandria, VA, counted two accident-free 
years.

•  Audited implementation of Section 404 of the Sarbanes-Oxley Act 

(internal control of financial reporting) was initiated in 2007 with no 
material weaknesses or significant deficiencies.



 
  
  
  
  
VSE Management Strategies for Continued Growth 
and Profitability 

Successful organizations use a variety of management strategies to 
support continued growth and profitability. Out of those strategies, 
I believe there are four basic elements that are paramount in their 
importance to continued success. First and foremost is a strong, 
long-term commitment from top management to honesty and 
business integrity in all of our dealings with both internal and 
external customers.
The second element is customer satisfaction. The government 
evaluates VSE’s performance on existing contracts regularly. 
Therefore, we must meet or exceed our customers’ requirements. 
Today’s performance is tomorrow’s past performance; we cannot 
afford to fail to meet our customers’ expectations. Third, VSE 
must have a robust pipeline of bidding opportunities to sustain and 
grow our operations. We have a number of contracts, and we know 
approximately when they are going to end. Finally, we must take 
care of our management team and our employees on whom we 
depend for continued long-term success.
Our new seized property contract for the Treasury Department and 
other agencies is a good example of how we use a total teamwork 
approach in achieving success. Our team has consolidated seized 
property facilities into a more manageable operation and has provided a more efficient manner of handling all 
seized property. The result was a $12.2 million pass back to our customers during inaugural 2007 efforts. This was 
all accomplished while working on an accelerated, mission-oriented schedule. The experience has enabled us to 
showcase our talents, make the contract easier to manage, and realize the best results for our customer.
Our Engineering and Logistics Division expansion is also attributable to a sound vision from our management 
team, precise and accurate operations, and outstanding quality control. This is a prime example of how honesty and 
integrity work in concert. We are respected because we say what we do and do what we say. 

“Growing Towards Our Future”

With growth comes the challenge of keeping our infrastructure current. As we grow, we will continue to 
aggressively bid and win contracts to stay competitive and maintain our awareness of trends in various disciplines. 
To ensure a smooth transition while we experience “growing pains,” we keep our fingers on the pulse of VSE 

operations, accounting, and administration. 
We are excited about expanding our horizons. 
The acquisition of ICRC has equipped us 
with a synergistic IT partnership, allowing 
us to confidently provide our customers with 
state-of-the-art applications. We now have the 
robust capabilities to meet our clients’ growing 
information technology needs. ICRC’s Port 
of Anchorage contract continues to exceed 
expectations, and we are now exploring other 
ports around the world that can benefit from our 
newly acquired area of expertise.
Energetics continues to move forward by 
expanding proven areas of its expertise into new 
arenas such as Homeland Security and Nuclear 
Infrastructure Power Support. 

7

There are always many challenges when a company is 
experiencing growth, and we work as a team to meet them 
and to serve our customers, employees, and shareholders. 
I want to thank each of you, including family members, 
for your continued dedication, cooperation, and 
conscientious efforts that make VSE what it is today. 
It shows what a can-do attitude, a focused vision, and 
outstanding teamwork can accomplish. I am very proud 
of our workforce and its loyalty, honesty, and integrity. 
Your ability to do tough jobs in remote and sometimes 
hostile parts of the world is to be commended. I see great 
things in 2008 for the synergistic partnership of our entire 
workforce and management team. 
In August 2007, the Board of Directors welcomed General 
Ed Eberhart, USAF (Ret.) to the Board. We look forward 
to his help and guidance as we continue to develop and 
grow the company in the years to come.
As always, your comments and suggestions are welcome.

Donald M. Ervine 
Chairman of the Board 
President and CEO/COO 
April 1, 2008



International Group 2007 
Milestones

James M. Knowlton, President
The International Group, which consists of five divisions, earned $228 
million in revenue in 2007, a 44 percent annual increase. 
•  The BAV Division completed the transfer of four ex-USS Osprey (MHC 
51) class mine hunters, two each to Egypt and Greece. BAV personnel 
conducted significant maintenance availabilities in Bahrain for each 
of the Egyptian ships—this was the first time a transfer was conducted 
outside of the United States under the BAV Foreign Military Sales 
(FMS) Supportability contract. As part of the follow-on technical support 
given to countries that have received U.S. Navy ships and systems, BAV built a new, state-of-the-art shipboard 
damage control and firefighting training facility in Egypt. BAV also transferred the ex-USS Trenton (LPD 14) 
to India, the first time India has received an ex-U.S. Navy ship under the BAV contract. BAV managed a six-
month industrial and training availability to repair and upgrade for the 9,100-ton amphibious transport ship and 
provided training assistance to the Indian crew. The ship then made the 10,000-nautical-mile journey to India to 
begin its new service. 

•  The Coast Guard Division (CGD) continued to provide Foreign Military Sales and lifecycle support for 

vessels transferred to foreign governments.

•  The Fleet Maintenance Division (FMD) was realigned in 2007 to support mission requirements with the new 

Ships Engineering and Logistics Division; Government Services Division, Air Force Logistics Division, and 
Naval Air Division now also fall under FMD direction. 
•  During 2007, the Ship Engineering and Logistics Division (SELD) was awarded additional task orders 
under the Rapid Response (R2) contract vehicle to support U.S. Navy Regional Maintenance Centers 
(RMCs) and the Navy’s Space and Naval Warfare Systems Command (SPAWAR). These contracts will 
potentially bring in about $63 million during the next 24 months. FMD-SELD will provide technical 
support services for the RMCs’ fleet sustainment operations, including program management, integrated 
logistics support, financial management, ship material assessments, and information technology 
applications. FMD-SELD will provide program management and technical/logistics services for SPAWAR 
to support the maintenance, refurbishment, modernization, and installation of shipboard and land-based 
communication, information technology, and navigational aid systems.

•  The Government Services Division (GSD) supports the U.S. Treasury Department’s seized and 

forfeited general property program through a $113 million contract. Operations are controlled from 
the VSE headquarters in Alexandria, VA; Regional Property Management Centers, which also serve as 
auction points, are located in South Brunswick, NJ; Miami, FL; and Riverside, CA. In 2007, the division 
successfully: optimized vehicle sales at facilities nationwide; provided field agents to support seizures; 
utilized the services of recognized sales and marketing organizations to increase all sales; and provided the 
government with visibility, accountability, and control. This program has the potential to be a significant 
contributor to VSE’s financial results through 2014.

•  The Air Force Logistics Division (AFLD) continued to provide maintenance and supply support for Basic 
Expeditionary Airfield Resources (BEAR) equipment for Pacific Air Forces (PACAF) headquarters. The 
division also provides logistics management support for BEAR and War Reserve Material resources for Air 
Combat Command and PACAF at Langley Air Force Base, VA; Hickam Air Force Base, HI; and Osan Air 
Base, South Korea. AFLD continued to expand its support of Air Force and Navy aviation maintenance and 
logistics support requirements. 

•  Naval Air Division (NAD) was recently awarded a four-year, $4.6 million subcontract to develop a 

maintenance-tracking system for the U.S. Army’s Joint Land Attack Cruise Missile Defense Elevated 
Netted Sensor System (JLENS), a key component of the Army’s Missile Defense Program. NAD provides 
both status monitoring and prognostics capability, while using its proprietary Prognostics Framework and 
Diagnostics Profiler capabilities to create system and equipment models, which emulate both the normal 
and anomalous operating behavior of the system. 



“Our customers come to BAV because we offer the personal 
courtesy of an expert staff which truly enjoys what it does.”

BAV Division

When Forbes magazine recently announced that VSE 
Corporation was ranked fourth among the top 200 small 
businesses in America, it specifically heralded VSE for 
its ability to support the transfer of ships from the U.S. 
Navy to other navies worldwide. 
One of the primary purposes of the Foreign Military 
Sales (FMS) Program is the U.S. Navy’s long-range 
vision and ongoing efforts toward a global maritime 
partnership. 
BAV Division’s FMS work contributed significantly to 
our unprecedented recognition. It all started 12 years 
ago when VSE was awarded a prime contract by the 
U.S. Navy’s Naval Sea Systems Command (NAVSEA). 
The contract outsourced all FMS ship transfer and 
follow-on technical support projects under a single contract vehicle. 
“VSE has been the first and only firm NAVSEA has entrusted with supporting naval ships that are sold, leased, or 
granted to other countries under the FMS supportability program,” said Harry Flammang, program manager for BAV 
Division. 
BAV has recently provided ship or shore support for Egypt, Taiwan, Thailand, Germany, India, Turkey, Italy, Romania, 
Mexico, Bahrain, Portugal, Poland, and Japan. Efforts include training, ship maintenance, engineering, system 
upgrades, shipyard operations, and technical support. 
“With the experience we’ve gained over the years, we have refined and streamlined our process. Our efficiency nicely 
complements our mission to provide our customers with the best capabilities for the price,” said Flammang, a retired 
U.S. Navy captain. “Our customers come to BAV because we offer the personal courtesy of an expert staff which truly 
enjoys what it does.” 

BAV saves the new ship owner additional costs by applying lessons learned 
from previous projects. BAV allows them to do more with less. “We provide 
hand-picked, lean, highly experienced teams, whose members possess multiple 
skills to act as trainers, managers, and technical experts,” Flammang added.
When BAV supports a ship transfer, it provides a team that does everything 
a host nation needs. This includes planning, assessing, industrial availability 
management, material acquisition, warehousing, logistics, customs, 
procurement, contracts, overhaul repair work execution, and hands-on, formal 
training support. 
BAV recently diversified its services by providing a short and long-range 
coastal radar system for the Romanian Navy on the Black Sea. 
Retired Navy Captain Ed Webster serves as follow-on technical support 
(FOTS) division manager, senior program manager for the Coast Guard FMS 
program, and program manager for the Defense Threat Reduction Agency. 
His current major assignment is providing vessel maintenance support to 
the Azerbaijan Coast Guard. “I came aboard during the initial FOTS efforts 
concurrent with reactivation and transfer of two LSTs to Taiwan,” said 
Webster. 
One of the major FOTS programs supports the Egyptian Navy in Alexandria, 
Egypt. There are approximately 100 BAV personnel in Egypt, providing 
expertise in ship repair planning and maintenance assistance, logistics support, 
ship and industrial maintenance training, damage control training, and 
facilities management. For all of the FOTS in-country programs, the objective 
of BAV is to help the foreign Navy become self sustaining.

10

“In a short period of time we, in essence, take a cold piece of 
metal to a war fighting platform.”

Shawn Zipprich is a BAV field engineer and program analyst. “In 2004, 
I was hired as a ship transfer assistance team instructor to work with the 
Taiwan sailors in Charleston, South Carolina,” Zipprich said. “Our STAT 
teams provided training to the crews on shipboard equipment maintenance 
and operation as well as assistance to the crews in reactivation of equipment. 
The most memorable challenges and experiences I can recall, while assisting 
Taiwan in the eventual transfer of the four ex-Kidd class ships, are conducting 
four missile shots, live fire gunnery, and close-in weapon system exercises. 
“I was also involved in the recent ship transfer of the ex-Trenton to India. 
We did a ‘hot transfer,’ which required flying to Rota, Spain, to join up with 
the U.S. and India Navy crews as they headed back across the Atlantic. 
This really gave us a head start on the work assessment. We could have 
anticipated parts, manpower, and work orders ready as soon as the ship was 
decommissioned.” 
A major challenge employees face in foreign nations is the language barrier. 
“Translators are usually available, but in many cases indigenous naval 
terminology can be a hurdle to translate,” said Zipprich. “We exercise 
patience and we do our best in communicating. It’s really rewarding when 
you are able to establish that bond of trust and respect through cultural 
barriers.”
The BAV success story is not only the result of VSE technicians and 
managers; it can also be attributed to solid, long-standing partnerships with 
top-notch vendors and subcontractors. According to Roy Butt, BAV deputy 
program manager, who joined the BAV Team in 1995, “There are seven of us 
from Booz | Allen | Hamilton on staff at the HQ in Alexandria.
“We started a subcontractor/prime relationship with VSE when this effort was 
first solicited. Prior to that, Booz Allen had the direct commercial contract with the Egyptian Navy. The operation in 
Egypt has grown 300 percent with combined assets and personnel. The combined BAV staffs are a truly integrated 
team. We bring different skills to the table from highly technical to classical management consulting expertise.”
Flammang added, “Our ability to incorporate into a project the very best technicians and managers our team 
members can offer is just one of the ways quality stays so high. We are proud of our contribution to the important 
concept of cooperation among allied navies, communicating and working together effectively in the collection and 
dissemination of data in the war on terrorism. Our work also benefits these countries by creating dual capabilities: 
maritime defense as well as seaborne worldwide humanitarian and disaster relief.” 
The majority of BAV work has been in overhauling mechanical and electrical systems and equipment. “We are now 
getting more in combat systems support,” said Butt. “One of the most challenging projects,” noted Webster, “was 
the design and installation of a helicopter recovery system for Perry Class Frigates in Turkey. We had three primary 
subcontractors involved, which really required significant project management and daily communication during all 
facets of the project from initial design to sea acceptance test.”

Quite a few of the BAV members also work in the 
logistics, research, contracts, administration, and 
procurement departments to round out the team.
“This is a very challenging, yet rewarding program 
because we see the immediate impact of our 
efforts, not only from the industrial standpoint, but 
by training a completely capable crew. In a short 
period of time we, in essence, take a cold piece 
of metal to a war fighting platform. Because we 
develop such a close relationship with the crews, 
we are like proud parents when we watch them take 
their ship and sail it home,” concluded Webster.

11

“The division might be new, but VSE has an almost 50-year 
history of advance planning and execution for the Navy”

Ship Engineering and 
Logistics Division 
Those who are around VSE Vice President Scott 
Barbour for more than five minutes soon realize that 
his infectious enthusiasm is drawn from the “can-do” 
attitude of the hard chargers who make up the Ship 
Engineering and Logistics Division (SELD).
Barbour manages the division, headquartered in 
Chesapeake, VA. SELD also has offices in Chula 
Vista, CA; Bridgeport, NJ; Blount Island, FL; and 
Indian Head, MD. Barbour joined VSE in 2004 after 
retiring from the U.S. Navy.
“We provide engineering and logistics for the U.S. Navy and Marine Corps,” said Barbour. “The division may be 
new, but VSE has an almost 50-year history of advance planning and execution for the Navy. Today, we build on a 
common ship sustainment’s approach while aligning those tasks to various BAV Foreign Military Sales (FMS), thus 
making it applicable to multiple customers. We are proven ship maintenance and advance planners and we bring our 
experience. Because of that, we provide a good product at a good price.”
The division recently participated in a key VSE project—BAV’s ex-Trenton overhaul project. SELD assisted in 
the integration planning by translating requirements in the contract-specific planning documents. “VSE’s goal is 
to provide customers efficient single-shop support. As the Navy exports multiple-ship and multi-option (MSMO) 
contracts, we support the Navy,” added Barbour.
Within SELD, Vince Marroletti manages the overall ship engineering operations for the division. Other operation 
site managers are: Sam McGovern in Chula Vista, CA; Rick Eckert in Bridgeport, NJ; Bill Thomas in Blount Island, 
FL; and Vince Hungerford in Indian Head, MD. 
As part of the Chesapeake SELD staff headquarters, Charlie Mayer heads Engineering/Shipboard Alterations 
and Installations and planning groups. Other managers include: Steve Mahaffey, USN MSMO Planning Support; 
Sherwin Turner, Business and Contracts; Tom Stein, Procurement; and Brenda Bennett, Human Resources. 
Out of the 121 personnel in the division, the breakdown is as follows: Bridgeport, 13; Chesapeake, 49; Chula Vista, 
26; Indian Head, 22; and Blount Island, 11.
According to Marroletti, the division is currently engaged in alteration installation team (AIT) services for USS 
Essex in Sasebo, Japan; USS Boxer in San Diego, CA; and USS Bataan in Norfolk, VA. 

“One of the requirements with all 
three ships is an upgrade to the air 
traffic control landing system,” said 
Marroletti, who is also the Quality 
Management Systems manager for 
Fleet Maintenance Division. “This 
entails removing the antenna and 
replacing below-deck equipment.”
SELD AIT teams have recently 
completed the identification friend 
or foe system upgrade on the USS 
George Washington and other air 
traffic control systems, as well as 
cooperative engagement capability 
upgrades and field changes on the 
USS Iwo Jima. They also installed 
the arresting-gear approved cross-
check system on the USS Enterprise 
and USS George Washington.

12

“VSE is a really good company. It treats you fair and works 
with you as a person,” commented Marroletti. “Our planning 
and production departments have the finest workers, ensuring 
that quality is always first and foremost, and the process is 
continually improving. It’s great to hear that time and time 
again from customers.”
Jean Coley in purchasing has been working with VSE for 27 
years in Chesapeake. “Since I began working here, I have had 
assignments in automated data processing, program manuals, 
training, facilities, and buying materials to support the needs of 
VSE employees and subcontracts both here and abroad, such 
as in Guam, Indian Head, MD and New Jersey.” 
In the planning department, Bart Powell is the lead of all 
planning personnel and administrative assistants. “My job 
entails assigning all automated work requests to the planners. 
I make sure priorities and deadlines are met and I review 
each specification,” Powell said. “It’s also important to verify 
drawings and technical manuals and parts required. Most of 
the work is hull, mechanical, and electrical. However, we have 
ventured out into electronics and written work specs for sonar 
array repair.
“The team has to concentrate on getting quality work done in 
the most cost-efficient way possible. It’s challenging, detailed, 
and requires researching multitudes of drawings and tech 
manuals. We have to engage in continuous correspondence 
to determine exactly what the customer wants. In trying to 
decipher drawings, the team has to be able to organize a 
repair-installation-inspection sequence that is clearly defined. 
Everyone who works here has naval experience, and they are 
dedicated to their work.” 
In Production, Tony Demarco performs design engineer work 
with both the MSMO planners and AIT project coordinators. 
“We first verify the work item and then we write work 
specifications for shop activity,” Demarco said. “We also oversee the work done on ships, and if there is a problem 
with a ship alteration, we write the reports to adapt to the change to ensure the same situation doesn’t happen again.” 

“We are actively engaged in promoting common, core ship-
sustainment planning and AIT support that can be applied to 
multiple maritime customers including the U.S. Navy, Coast 
Guard, and FMS,” Barbour said. “The ships around the world 
have to be ready. We understand the customer and we have the 
necessary experience to keep these ships operational at sea to 
maintain readiness.”

1

Government Services Division

This year, VSE’s new Government Services Division (GSD) began 
managing nationwide auctions as part of a recently awarded contract by 
the U.S. Treasury Department for the management and sale of seized 
and forfeited property.
In 2007, the auctions resulted in more than $12.2 million in pass back 
revenue for the U.S. Treasury Department. 
“The contract is scheduled to continue for a period of about eight 
years,” said Mike Hamerly, Executive Vice President and Fleet 
Maintenance Division Director. “Our program is headquartered in 
Alexandria, VA, and the auctions are administered from our regional 
centers in Riverside, CA; Dayton, NJ; and Miami, FL.”
“We provide full logistical support of all seized property obtained by multiple government agencies under the U.S. 
Department of Treasury contract,” said Government Services Division Director Jim Fallon. “Our responsibilities 
include the acquisition, transportation, storage, and liquidation of all seized and forfeited properties.”
Since the first auction conducted by the VSE team in Miami, FL, in March 2007 we have made great strides in 
streamlining the auction process, and we will continue to improve the effectiveness of the auction process. “The 
bulk of bidders showed up to be registered in a short timeframe, and there was a limited amount of bandwidth that 
was being shared throughout the expo center,” said VSE Vice President and IT Manager Dave Chivers. “It was also 
demanding to get all the payments processed quickly. Now the process is running very smoothly.” 
Agencies participating in the contract under the guidance of the U.S. Department of Treasury include the Internal 
Revenue Service, Office of Foreign Assets Control, U.S. Secret Service, Customs and Border Protection, 
Immigration and Customs Enforcement, Food and Drug Administration, and the Bureau of Alcohol, Tobacco and 
Firearms.
The seizing agent’s first step is to notify the VSE call center, and from that point a VSE representative is dispatched 
to pick up the detained property, often within 24 hours. This can be a challenge when some unusual items are seized, 
such as perishable items, as well as exotic and domestic animals, some of which are in need of immediate medical 
attention. If it is determined that the perishable items are not fit for consumption, VSE personnel properly dispose of 
the shipment.
“VSE does not take custody of narcotics and real estate,” said Hamerly. “Storage time for most of the seized 
items can be lengthy because of the due process of law. But there are times when permission is requested through 
the government to do a quick sale. The revenues generated by the sales are then promptly transferred to the 
Government.”
There are other circumstances when it’s determined that property should be destroyed. For example, a large quantity 
of pirated DVD movies seized in Los Angeles that must be prevented from being redistributed among the general 
public. Counterfeit clothing and accessories are also routinely destroyed. During one of the VSE’s first seizures, 

GSD employees had to individually open a large amount of counterfeit 
watches and extract the batteries which required special disposal.
Noteworthy items that are seized include designer watches, loose 
diamonds and gems, gold coins, exotic cars, yachts, and aircraft. 
Employees or family members of VSE, subcontractors, or participating 
agencies are not allowed to bid on any of the seized property. 
Subcontractors on the VSE contract include Manheim (automobile 
auctions in 86 different locations); EG&G Technical Services (storage 
services); Blanchard and Associates (consignment field agents); and 
Rick Levin and Associates (auctioneers).
“I’m very proud of the fact that, for this contract, new technology was 
developed, and it has been very successful,” Hamerly said. 

14

“AME is combat proven, and saves the Navy/Marine Corps 
approximately $450 million per year in program costs.”

Naval Aviation Division

VSE Corporation’s Naval Aviation Division (NAD) 
manages and supports Foreign Military Sales (FMS) of 
the Tomahawk and Harpoon Weapon Systems and the 
F/A-18 Automated Maintenance Environment (AME). 
According to NAD Manager Terry Chandler, “AME was 
designed, built, and deployed to support fleet combat 
operations of the F/A-18. AME is combat proven, and 
saves the Navy/Marine Corps approximately $450 
million per year in program costs. The cost savings are 
accomplished by providing near real-time flight data, 
which automatically updates logistics, maintenance, 
and engineering requirements and projections through 
a sophisticated, yet easy to operate, tracking process for 
the aircraft.”
“Basically, our flight data system captures all flight 
information, such as temperature and throttle movements, 
as well as all maintenance history. The information is 
made available through a Windows-based computer program,” explained Bobby Drew, AME program manager. 
“AME was enabled by our team in less than 5 months in 1997, and it is the single largest worldwide deployment of 
a system of this type.” 
Mark Virgo, VSE AME senior analyst, adds, “We maintain the hardware on a top-tier server. To best serve our 
customers, we provide a 24-hour help desk, which includes 4,000 individual pieces of hardware, to support work for 
84 different Navy and Marine Corps activities.”
“I assist foreign countries purchasing the Tomahawk Missile System,” said Lorri Wood, senior financial analyst 
and manager of the Tomahawk Program for the past six years. “Most of the time I deal with the United Kingdom, 
although on occasion, I have assisted Spain and the Netherlands. I really enjoy working for VSE because they trust 
and value my abilities.” 
James Wilson, deputy program manager for FMS (PMA-280, NAS Patuxent River), commented, “As a customer 
of VSE for the past seven years, I have been provided with financial case managers and program analyst support to 
successfully manage the Tomahawk FMS Program. VSE has always been extremely reliable. I have been promoted 
twice and I directly attribute my career success to VSE and their phenomenal support. It amazes me how they 
anticipate my needs and complete tasks in advance of my request.”
“The people here are great to work with because of their pride, commitment, and sincere work ethics,” said Laurel 
Twemlow, administrative assistant for NAD, headquartered in Lexington Park, MD.

NAD personnel provide all worldwide-fleet support to 
more than 25,000 users at 146 different sites and aboard 
11 aircraft carriers, encompassing more than 1,800 
F/A-18 Hornet Strike/Fighters across the entire Navy/
Marine Corps F/A-18 fleet, including NASA and the 
Kuwaiti Air Force. Offices are located in Oceana, VA; 
Beaufort, SC; Jacksonville, FL; Atlanta; San Diego; 
Miramar, CA; Lemoore, CA; and Atsugi, Japan.

1

 
Federal Group 2007 
Highlights

Thomas G. Dacus, President 
The Federal Group consists of five divisions. 
Collectively, they earned $360 million in revenue 
in 2007—a 125 percent annual increase over the 
previous year. 
•  Communications and Engineering 

Development Division (CED) is the VSE lead 
for performing as a small prime contractor for 
the U.S. Army Communications-Electronics 
Command (CECOM) Rapid Response contract. They oversee diverse DoD-related tasks with each of the 
Armed Services and several U.S. government agencies. This year they supported war efforts with robust Army 
equipment repair and support programs, primarily for the family of route clearing and mine resistant, ambush 
protected (MRAP) vehicles, which began in 2006 with an initial ceiling of $351 million. The task order was 
increased this past year to approximately $446 million. In addition, CED’s Assured Mobility Systems Program 
efforts were also increased this year from an original 16-month, $164.8 million ceiling to $271 million, and the 
performance of technical support services was extended to August 2008. CED continues to expand their role in 
support of critical DoD-wide initiatives throughout the Army’s major commands. 

•  Engineering and Logistics Division (ELD) continued their superior level of performance and growth and, 
during 2007, established new operations/support office s in Atlanta and multiple RESET/Refurbishment 
locations in California. This continues VSE’s long history of providing support to the U.S. Army Reserve 
in equipment repair, upgrade, engineering, and systems integration work. ELD was also selected as a prime 
contractor for the U.S. Army’s Field and Installation Readiness Support Team (FIRST).

•  Field Services Support (FSS) Division is the latest team joining Federal Group in 2007. Formed in June 

to provide worldwide field maintenance, logistic support, and technical advisory services for a wide variety 
of mine-clearing military vehicles and equipment, FSS services include performance of organizational, 
intermediate, and specialized depot-level maintenance and planning. A critical strength of the FSS Division is 
its ability to provide specialized support in areas of combat operations, typically in very austere environments.

• 

Systems Engineering Division (SED) has been home to the Tanker Ballistic Protection System (TBPS) since 
November 2004. To date, more than 1,350 fuel tankers deployed by the U.S. Army in Iraq have been serviced 
and in 2007, SED began providing the TBPS to U.S. Marine Corps fuel tankers. 

• 

•  Under the Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (CREW) program, 
SED supports Warfighters in Afghanistan, Iraq, and Kuwait by providing field service support on installa-
tion, training, maintenance, and upgrades of electronics developed to prevent the detonation of improvised 
explosive devices (IEDs). SED has performed under a subcontract of $8.83 million with CSC Corporation 
on the CREW Program since April 2006. 
In support of the USMC and Army worldwide corrosion efforts, SEDs Corrosion Prevention and Control 
(CPAC) Program has been expanded to include establishing and operating corrosion repair and service 
centers at key military installations to include development and deployment of a robust mobile application 
capability to support contingency operations deployments; and RESET/RECAP programs throughout the 
world. 
SED also managed the program this year that led to design, development, and production of the U.S. Coast 
Guard’s first Enhanced Mobile Incident Command Post, housing a communication support center for first 
responders in all federal agencies mobilized during a major emergency in the continental U.S.

• 

•  Management Sciences Division (MSD) continues to provide nationally and internationally recognized subject 
matter experts in product and process improvement, Lean Six Sigma, continuous process improvement, process 
reengineering, and training for Green, Black, and Master Black Belts to the U.S. military. Partnering with the 
Army’s Armament Research, Development and Engineering Command (ARDEC), MSD provided the guidance 
and training propelling the Command to be the first government/non-profit agency to receive the prestigious 
presidential Malcolm Baldrige National Quality Award for organizational performance excellence. 

1

“When a small-arms round penetrates a tanker, the sealant works so efficiently that you 
could not detect a hit unless you examined the inside of the tank.”

Systems Engineering Division/Field 
Services Support Division

For the past three years, VSE employees have provided an invaluable service 
to the Marines and soldiers who transport fuel in the operational theaters. 
The Tanker Ballistic Protection System (TBPS) was designed by VSE to 
dramatically increase the safety of our Soldiers and protect the contents of 
fuel transport tankers from small-arms attack. Trained Field Technicians 
spray the exterior of fuel tank with a polyurethane-based coating which, 
when contacted by petroleum, acts as a self sealant. Thus, if small arms fire 
punctures the tanker, the coating reacts with the fuel and immediately seals 
the hole.
“We developed this system because soldiers were seriously injured or killed due to lack of protection for the crew, 
equipment, and bystanders if a tanker were hit,” said TBPS Site Manager, Paul Brennan. 
Gene Desaulniers, SED TPBS program manager, commented, “When a small-arms round penetrates a tanker, the 
sealant works so efficiently that you could not detect a hit unless you examined the inside of the tank. 
“This system is also designed to provide efficient protection for fuel-saddle tanks, especially on troop carriers,” said 
Greg Hicks, VSE shop armor lead. “It’s a privilege to be here. Our reward comes when we see that confident, secure, 
and satisfied look in the eyes of the soldiers and Marines before they drive away.” 

The Secretary of Defense Robert Gates recently stated, “The acquisition of Mine Resistance and Ambush Protected 
(MRAP) vehicles are the highest priority of the Department of Defense.” MRAP vehicles are a family of armored 
fighting vehicles designed to survive improvised explosive device (IED) attacks and ambushes. The Marine Corps 
is spearheading the MRAP program and on target to replace Humvees in combat zones with the heavier, enhanced-
design MRAP vehicles. In addition, added Gates, “the Army’s Medium Mine Protected Vehicle (MMPV) is a class of 
blast protected, wheeled vehicle platforms operating in explosive hazardous environments in route and area clearance 
operations, explosive hazards reconnaissance operations, and Explosive Ordnance Disposal operations.” 

“To complement these vital missions, in 2007 VSE implemented a highly trained contingent of Field Service 
Representatives located in areas of combat operations and challenging environments,” said Field Services Support 
Division Manager Frank Wickersham III, “We are poised to repair quickly any damages incurred on any of the MRAP/
MMPV vehicles to include performance of organizational, intermediate and specialized depot-level maintenance. We 
also maintain repair parts in stock at 95% capacity and a 90% percent vehicle readiness rate at all times.”

Typical services to be performed 
include:
•  Equipment/system evaluations/

technical inspections/documentation

•  Maintenance and repair 

•  New equipment/sustainment training

•  Parts sourcing

•  Total package/new equipment fielding

•  System modification/upgrade

•  Asset tracking and accounting

•  Integrated logistics support

•  Program support/system and technical 

integration

17

ELD’s equipment refurbishment program has experienced 
unprecedented expansion and growth revenue

Engineering and Logistics 
Division

Engineering and Logistics Division (ELD) Manager 
Donnelle Moten had the vision several years ago 
to bring equipment refurbishment contracts to 
VSE. Since that time, the program has experienced 
unprecedented expansion and revenue growth.
The first shop was established in Alexandria, VA, in 
2004 and quickly became efficient in refurbishing 
a variety of military equipment to a “like-new” 
condition. 
VSE’s reputation for economically and precisely 
getting the job done soon prompted the establishment 
of similar installation maintenance shops in 
Ladysmith, VA; Ashland, VA; Weldon Springs, MO; and Long Beach, MS.
In the new California effort, sites are located in Los Alamedas, Fresno, Sacramento, Mare Island, and Moffitt 
Field. “We also have established shops at Fort Hunter Liggett and Barstow in which we are providing engineering 
maintenance and mechanical support to sustain their track and wheeled vehicles,” said Moten. “We are also 
discussing the establishment of a paint and blast facility which would be located between Fort Hunter Liggett and 
Barstow.” These operations are unique in that they are under a government-owned/government-operated contract, 
unlike VSE operations on the East Coast.
ELD provides full lifecycle engineering, logistics, maintenance, and refurbishment services to extend and enhance 
the life of existing equipment. ELD’s core competencies are primarily in combat and combat service support system 
conversions, technology insertion, technical research, sustainment and re-engineering, system integration, and 
configuration management. 

1

Communications and 
Engineering Division

VSE Corporation, as a prime contractor, is executing 
a $2.9 billion contract supporting all branches of 
the Armed Forces and many government agencies 
worldwide through the U.S. Army Communication 
and Electronics Command (CECOM) Rapid Response 
(R2) Program. 
Awarded to VSE in January 2003, this contract 
provides the federal sector a flexible, rapid response 
acquisition vehicle that can support virtually any 
technical or non-technical requirement from state-
of- the-art research and development to providing all 
aspects of Integrated Logistics Support services. As of 
the first quarter, 2008, CECOM has placed more than 
1,300 task orders on the R-2 with a ceiling exceeding 
$11.98 billion.
“VSE started as a subcontractor when the program first became available to all U.S. government agencies in 1998,” 
said Federal Group President Tom Dacus. “At a certain point I wanted to find out how we could become a prime 
contractor, even though we were considered underdogs being classified as a small business (for this contract) as well 
as an outsider,” said Dacus. “We pulled a team together—tenaciously worked day and night—and became a prime 
in 2002. We are now managing the government’s biggest revenue producing proactive responsive program as the 
program/task leader. That program supports PM Close Combat Systems Route Clearance Equipment (in Iraq and 
Afghanistan), a $350 million effort, executed in just 12 days, for repairs and logistics support of vehicles that are 
damaged by IEDs. 
According to Charley Borns, CR2 Project Director for VSE Corporation, “Our mission is to provide federal program 
managers, in coordination with the CECOM R2 Program Office, an ability to get a task order in place, as quickly 
as possible, and to ensure the responsive and compliant execution of the task requirements to our customers’ total 
satisfaction.” The VSE CR2 team provides oversight execution of task orders, coordinating all aspects of the 
associated contractual and execution activities of 28 subcontractors and more than 100 tier-one vendors. “We also 
interface with CECOM on emerging programs and provide business development coordination for the VSE R2 
Team, in coordination with the VSE Business Development staff,” added Borns. 

The contract is used by many 
of VSE’s divisions to include 
Engineering and Logistics 
Division, Systems Engineering 
Division, Fleet Maintenance 
Division, and Management 
Sciences Division.

1

“We have attained an astonishing $43.8 billion in cost savings, through a combination of cost 
avoidance and validated value engineering proposals.”

Management  
Sciences Division 

One of VSE’s best kept secrets is their 
Management and Sciences Division (MSD). 
It houses a relatively small but exceptionally 
educated and experienced group of 
management and analytical professionals who 
are nationally and internationally recognized 
experts in product and process improvement, 
Lean Six Sigma (LSS) and Continuous 
Process Improvement (CPI). Application of 
these principals in any organization leads to 
more effective/ efficient products and processes measured by meaningful metrics. 
The MSD team provides government and industry clients with CPI/LSS, and reliability engineering through training 
workshops and direct consulting. The U.S. Army’s Armament Research, Development and Engineering Center 
(ARDEC) recently was the first government agency in history to receive the Presidential Malcolm Baldrige National 
Quality Award for organizational performance excellence. Dominick Carra, director of ARDEC quality engineering 
and system assurance, said, “When we began this endeavor with VSE seven years ago, we could not imagine 
that it would become the most successfully deployed Lean Six Sigma program in the Army. We have attained an 
astonishing $43.8 billion in cost savings, through a combination of cost avoidance and validated value engineering 
proposals.”
LSS provides a disciplined structured approach to improving the effectiveness and efficiency of all business 
processes.
“Six Sigma zeros in on product optimization and service delivery,” said Dr. Norm Frigon, VSE Assistant Vice 
President and Director of MSD. “It provides the methodology and tools for achieving the required robustness and 
success of the processes. Lean came a few years later out of the desire to reduce expenses, primarily by identifying 
wasted resources without compromising the quality.” 
VSE’s LSS training and implementation support employs a comprehensive set of tools, including quality function 
deployment, failure modes and effects analysis, benchmarking, design of experiments, simulation, statistical 
optimization, and mistake proofing. In addition, the MSD team has since developed Enterprise Excellence, a model 
utilizing a holistic approach for managing and improving operations of an organization. It focuses on the leadership, 
management, and technology of essential systems and processes. 
“The path to improvement is accomplished through a unique approach, beginning with a thorough preliminary 
needs assessment,” said Dr. Frigon. “To achieve a good balance between effectiveness and efficiency, we deploy all 
strategies to make the cultural and organizational changes essential for the success of the enterprise. The MSD team 
also offers nose-to-tail operation services to actually identify problems and then incorporate solutions,” said Frigon, 
a former Marine. “This is usually the case when a solution needs to be done quickly, to avoid a catastrophic event 
such as having a primary contract cancelled.”
Dr. Frigon has co-authored five books: Achieving the Competitive Edge: The Practical Guide to World Class 
Competition (an international best seller translated in Spanish, Portuguese, and Chinese); Fulfilling Customers’ 
Needs: A Practical Guide to Capacity Management; The Leader: Developing the Skills & Personal Qualities 
You Need to Lead Effectively; and From Concept to Customer: The Practical Guide to Integrated Product and 
Process Development, and Business Process Reengineering (authored with Jack Revelle); and Practical Guide to 
Experimental Design (authored with David Matthews).

20

VSE Corporation is a prime contractor for the U.S. Army Communications and Electronics 
Command (CECOM) Rapid Response (R2) Program, executing $2.9 billion in potential 
contract support. 

R2/SeaPort-e/FIRST 

Army’s Field and Installation Readiness  
Support Team (FIRST) 

In 2007, VSE was selected as a prime contractor for the 
Army’s Field and Installation Readiness Support Team 
(FIRST) contract.
According to Vice President and Engineering and Logistics 
Division Manager Donnelle Moten, “The FIRST contract 
provides select Department of Defense customers with the unique capability to develop and administer multiple-
award task orders using a streamlined acquisition approach.” 
This approach strategically considers the most effective method of satisfying reoccurring logistical support 
requirements. It acquires logistic support services at a reasonable price and aids in conforming to performance-
based directives. By expeditiously satisfying requirements, it enhances customer satisfaction.
This is a one-stop acquisition contract vehicle for field and installation-level logistics, which includes all core field 
and installation-level functions.
VSE FIRST Project Director is Clair Anderson, (404) 763-4503, cvanderson@vsecorp.com.

U.S. Army Communications and Electronics Command (CECOM)  
Rapid Response (R2) Program

The VSE Corporation is a prime contractor for the U.S. Army Communications and Electronics Command 
(CECOM) Rapid Response (R2) Program, executing $2.9 billion in potential contract support. 
This contract provides the federal sector a flexible, rapid response acquisition vehicle that can support virtually 
any technical or non-technical government requirement. The R2 Statement of Work (SOW) allows the greatest 
flexibility in responding to federal contracting needs, from state-of-the-art research and development to integrated 
logistics services. 
According to the latest figures, CECOM has authorized more than 1,239 task orders with a ceiling exceeding $11.98 
billion. VSE contribution is more than $1 billion.
Charley Borns, R2 project director for VSE Corporation, said, “Our mission is to provide federal program 
managers, in coordination with the CECOM R2 Program Office, an ability to get a task order in place as quickly as 
possible. The goal is 19 business days.”
The R2 contract allows for issuance of multi-year task orders that have a base period of either 36 months or 12 
months. VSE has several corrosion control tasks, supporting TACOM and the Marines, that are structured in this 
fashion. This facet again provides the needed flexibility to support combat units on demand. 
VSE CECOM R2 Project Director is Charley Borns, (732) 389-3324, cjborns@vsecorp.com.

SeaPort Enhanced (SeaPort-e)

VSE is a contractor for the SeaPort Enhanced (SeaPort-e) contract vehicles which utilize electronic procurement 
of engineering, financial, and program management support services. Using SeaPort-e, the Navy Virtual SYSCOM 
(VS) Commanders (NAVAIR, NAVSEA, NAVSUP, and SPAWAR) has adopted an integrated approach to 
contracting for support services. 
The SeaPort-e portal provides a standardized means of issuing competitive solicitations among a large and diverse 
community of approved contractors, as well as a platform for awarding and managing performance-based task 
orders. This unified approach allows SeaPort-e service procurement teams to leverage their best work products, 
practices, and approaches across the Navy’s critical service business sector.
VSE SeaPort-e Project Director is Scott Barbour, (757) 523-7218, csbarbour@vsecorp.com.

21

“...we have diversified our markets and client base to provide a more comprehensive and 
diverse portfolio of services.”

Energetics 
Incorporated 

Jim Reed, President
In 1979, four young professionals combined 
their consulting practices to form a new 
company, located in Columbia, MD. They 
managed to get their first contract from 
Pacific Northwest National Laboratory to 
prepare environmental impact summaries of 
R&D projects designed to improve energy 
efficiency in production technologies.
That company was Energetics Incorporated.
Energetics grew steadily through the 
years and now has additional offices in 
Washington, DC, and Morgantown, WV. In 
1995, the owners of Energetics joined the 
VSE team in the hopes of broadening their client base.
Jim Reed, President and CEO, was one of the original founding members. “One of the reasons we wanted to team 
with VSE is to diversify our services. About 90 percent of Energetics’ work, up to that point, was primarily serving 
our core clients in the Department of Energy,” Reed said. “We have succeeded in diversifying our business base 
beyond those clients while continuing to provide them with increasingly sophisticated services over the years.  
As needs have changed, programs have matured, and markets have become more competitive. 
“We now offer professional services to government and commercial clients in several key and emerging markets, 
such as: strategic planning; technology assessments; environmental regulatory compliance, clean energy supply, 
energy infrastructure, and end-use efficiency; infrastructure protection and security; and global health.
The largest of Energetics’ five divisions is its Technology Strategies Division. Senior Vice President and 29-year 
Energetics staff member Jack Eisenhauer said, “We develop collaborative strategies for addressing complex national 
and global issues such as climate change. We operate at the interface between technology and policy needs. The key 

here is to bring different parties together to try and solve 
these problems in innovative ways. Within our division 
we also conduct partnership development, technology 
roadmapping, performance measurement and analysis, and 
technical and business consulting.
“Initially Energetics was mainly an engineering services 
company doing work almost exclusively for the 
Department of Energy’s energy-efficiency programs. 
Following Don Ervine’s guidance, we have diversified our 
markets and client base to provide a more comprehensive 
and diverse portfolio of services. We now serve clients 
at the Department of Homeland Security, many national 
laboratories, and a variety of DOE programs, as well 
as private companies, industry associations, and state 
agencies. Our consulting services and products are far more 
sophisticated and we are sought out nationally and globally. 
Our recent expansion into global health and cyber security 
is starting to bear fruit.” 

22

“The multi-disciplinary staff of scientists, engineers, economists, and public policy 
professionals in the Energy Systems Division provides support for federal- and private-
sector clients...”

For example, the group provides a variety of services 
for the PATH Malaria Vaccine Initiative, which 
receives funding from The Gates Foundation.
Brian Marchionini, who assists Vice President 
Rich Scheer in managing the Energy Systems 
Division, said, “The multi-disciplinary staff of 
scientists, engineers, economists, and public policy 
professionals in the Energy Systems Division 
provides support for federal- and private-sector 
clients, primarily in the areas of electricity policy, 
technologies and markets, wind power, and climate 
change programs.” 
The group has helped to produce a number of high 
quality products including multi-year program 
plans, annual operating plans, websites, fact sheets, 
and brochures. 
“Another area we specialize in is coordinating 
conferences and workshops for topics such as 
electricity policy, plug-in hybrid electric vehicles, 
and cutting-edge energy technologies, “Marchionini 
added. “This involves constructing an effective 
agenda, gathering the appropriate group of experts, as well as facilitating the event. We then capture the information 
and solicit feedback before finalizing the event by putting together and distributing the proceedings document.”
An example of a recent assignment is the group’s work on Maryland’s Energy Summit last month in Annapolis. 
The summit is the launching point for a new energy strategy to be presented to the General Assembly in 
November. Rich Scheer assisted the Maryland Energy Administration in leading the discussions and facilitating 
the dialogue at the summit, and was credited by Governor Martin O’Malley.
In the Management Services Division, Vice President Marty Martinez and his staff support peer and project 
reviews, perform technical reviews, and develop annual reports and other documents for the Department of 
Energy’s Office of Nuclear Energy. “We maintain various management databases, provide meeting support, 
and provide unique program support activities such as developing strategic plans and roadmaps for the various 
program offices,” said Martinez.
“We also are working on independent, external project baseline development and validation reviews in support of 
the U.S. Army Corps of Engineers and the DOE Office of Engineering and Construction Management,” he said. 
“Some of the sites we are currently working with include: Richland, WA; Aiken, GA; Oak Ridge, TN; and West 
Valley, NY—as well as the Gaseous Diffusion Plants in Portsmouth, OH, and Paducah, KY.” 
A major service offered by Energetics’ Science and Technology Division, headed by Vice President Nancy 
Margolis, is the development of strategic industry visions and technology roadmaps that guide decisions and 
investments for multiple partners. Technology assessments and program metric studies are additional areas in 
which the division excels. The division has expanded its consulting support practice to include many private-
sector and international clients.

Vice President Jim Carey overseas the 
Planning and Analysis Division, which 
supports the Office of Infrastructure 
Protection and other programs 
within the Department of Homeland 
Security. The group recently was 
awarded a contract by DHS to perform 
planning tasks to help protect the 
nation’s critical infrastructures and 
key resources in the event of a major 
disease pandemic. 

2

Energetics has a company-wide 
strength that has grown over 
the years: an award-winning 
technical communications team, 
comprising talented specialists in 
communication planning, writing 
and editing, graphics, video 
production, and web development. 
“We occupy a market niche 
significantly up the value chain than 
when we began,” Reed said. “We 
provide quality work because we are 
blessed with highly trained, talented, 
ethical, experienced, and loyal 
employees. I am particularly happy 
that so many of our senior staff 
members have been with the firm 
for many years, which, combined 
with our steady growth record, 
demonstrates to our young staff 
members that Energetics offers them 
realistic opportunities for career 
development over the long haul.”

24

“ICRC is well positioned to introduce established, proven 
products into government and commercial markets.” 

Integrated Concepts and 
Research Corporation

Carl Williams, President and COO 
Jim Lexo, CEO
Integrated Concepts and Research Corporation (ICRC), 
a subsidiary of VSE Corporation, is a diversified 
technical and management services company that 
primarily serves the government market. ICRC employs 
approximately 200 employees across four operating 
divisions. The company’s divisions provide solutions 
and services in the areas of information technology, 
advanced vehicle technologies, aerospace engineering, 
and transportation infrastructure.

Advanced Vehicle Technologies Division

ICRC’s Advanced Vehicle Technologies (AVT) division, based out of Sterling Heights, MI, specializes in the 
development and enhancement of vehicle technologies for government and commercial clients. The AVT division 
offers its customers a unique combination of program management and technical expertise that take complex 
projects from start to finish. 
“ICRC carries a strong reputation for providing superior products and services in research and development,” said 
Carl Williams, ICRC President and COO. “ICRC is well positioned to introduce established, proven products into 
government and commercial markets.” 
With a particular focus on unique technology solutions, ICRC’s AVT division manages the development, 
qualification, marketing, and sale of a variety of specialty products that meet unique commercial and government 
needs. ICRC is currently working with the U.S. Army to develop an all-terrain, light, tactical vehicle for military 
use. The LASSO® (Land and Sea Special Operations) vehicle is a high-capacity, six-wheel–drive, all-terrain utility 
vehicle designed with special features, such as a large cargo area and a heavy load capacity. 
“LASSO® is a unique vehicle which offers significant advantages over current commercial off-the-shelf recreational 
ATVs,” said John Wasylyk, LASSO® program manager.
Additionally, ICRC’s AVT division facilitates the development and evaluation of alternative fuels and energy 
solutions. The division builds partnerships to achieve ambitious technology objectives and to address national 
strategic energy needs. Specific projects include overseeing a Department of Energy effort to produce, test, and 
evaluate alternative clean-burning diesel fuels.

Aerospace Services Division

The ICRC Aerospace Services (AS) division, based 
out of Huntsville, AL, has a proven track record 
of delivering services and support to the aerospace 
industry. For government clients like NASA and 
the U.S. Air Force, this specialized group provides 
aerospace testing and analysis, and technical and 
operational support. ICRC, a pioneer in providing 
commercial testing services at NASA, continues 
to expand that service. ICRC also holds a separate 
contract under Jacobs Engineering to provide 
highly specialized engineering services to a variety 
of NASA programs.

2

ICRC provides...assistive technologies support and 
services to SSA employees with disabilities

ICRC has been successful in conducting 
materials and components testing for 
NASA projects including support of the 
international space station and space shuttle. 
ICRC offers commercial testing at the 
Marshall Space Flight Center’s world-class 
facilities on a non-interference basis. ICRC 
provides test data management, fixture 
design, and manufacturing. Testing facility 
support includes maintenance, calibration, 
configuration control, modifications, and 
procurement services.
ICRC’s space vehicle launch support includes 
end-to-end engineering and technical services 
that integrate activities needed for successful 
launch operations. The AS technical team 
ensures successful program execution in 
space systems development by providing 
program management services during the 
initial design effort and throughout all 
development phases. 

Information Sciences Division

ICRC’s Information Sciences (IS) Division provides end-to-end information technology solutions and services 
to a variety of government customers. ICRC has locations in Chantilly, VA; Vicksburg, MS; and Portland, OR. 
ICRC focuses on enterprise IT solutions and services, from sophisticated system design and engineering to help 
desk support. ICRC’s primary IT customers include the U.S. Army Corps of Engineers and the Social Security 
Administration (SSA).
Since 2003, ICRC has provided global IT support for the Corps of Engineers Enterprise Infrastructure Services 
(CEEIS). ICRC has assembled, installed, configured, and provided help desk support for standardized Corps 
Network and Security Stack (CNSS) systems at more than 70 Corps locations. Through this project, ICRC received 
a 98 percent approval rating on surveys completed by the Corps site personnel following the installations.
For the past five years, ICRC’s Assistive 
Technology Support Office (ATSO) has provided 
assistive technologies support and services to 
SSA employees with disabilities under a contract 
with the SSA’s Office of Telecommunications 
and Systems Operations (OTSO). ICRC provides 
SSA’s disabled employees with specialized 
training and help desk user support for job-related 
assistive technologies, enabling the employees 
optimal productivity and job satisfaction. In 
addition to user support and training, ICRC’s 
expertise in the area of assistive technologies 
includes requirements and needs analysis; 
product evaluation; deployment planning and 
implementation; product configuration and 
integration; and program management.

2

The U.S. Department of Transportation (DOT) Maritime Administration (MARAD) has 
contracted with ISS to provide program management for the $400 million Port of 
Anchorage Intermodal Expansion Project (PIEP).

Infrastructure Support Services Division

The ICRC Infrastructure Support Services (ISS) 
Division, based out of Anchorage, AK, provides 
program management and technical expertise 
for large infrastructure development projects. 
The division’s focus is on the development and 
expansion of major systems and facilities, including 
transportations systems (ports, railroads, highways, 
and airports), energy systems (power plants, fuel 
plants, hydroelectric systems, and alternative fuels) 
and wastewater systems. 
The U.S. Department of Transportation (DOT) 
Maritime Administration (MARAD) has contracted 
with ISS to provide program management for the 
Port of Anchorage Intermodal Expansion Project 
(PIEP). PIEP activities include the development 
of an additional 135 acres of land for industrial 
commercial use and support of rapid military 
deployment from Alaska’s bases. The Port of Anchorage is a vital and integral part of Alaskan life, serving 80 percent 
of the commercial goods for 90 percent of the state’s population.
ICRC has been involved in the project from its inception by supporting the Port’s efforts in permitting, design, and 
construction of a large, intermodal facility. The project also requires demolition of an existing wharf and extensive 
seismic studies. The project will deepen the harbor and install larger and longer cranes to accommodate fast, efficient, 
and safe movement of goods from ship to shore in a growing market without disruption of commercial service. ICRC 
is fully responsible for permitting, design, construction activities, tenant coordination, and project controls.

27

VSECorporation helps organizations succeed 

by offering experienced people, efficient 
systems, and cutting-edge technology. By 

pleasing our customers and helping them succeed, we 
capture new work, increase our technical competence, 
afford more employment opportunities, and build 
great industry partnerships—all of which increase our 
shareholder value.

Our reputation for success and our quality management system result 
from the value we place on self-governance, openness, honesty, 
and integrity in everything we do. The foundation of our success is based on state-of-the-art IT communications, 
teamwork, motivation, and leadership. VSE has an enduring commitment to help our customers, employees, and 
teaming partners succeed with cost-effective, modern, high-quality solutions and process improvement.
VSE was established in 1959 with a mission to provide engineering and technical support services to reduce the 
cost and improve the reliability of U.S. Department of Defense (DoD) systems and equipment. Today, VSE is a 
broadly diversified company focused on creating, sustaining, and improving the systems, equipment, and processes 
of government. Our expanded mission now includes providing innovative services and technologies to help our 
customers succeed in the engineering, energy, environment, information technology, infrastructure, property 
management, and defense services markets.

NASDAQ: VSEC

ISO 9001:2000

2

Board of Directors/Corporate Officers

Board of Directors

Donald M. Ervine 
Chairman of the Board, 
President and CEO/COO 
VSE Corporation
Ralph E. Eberhart 
General, USAF (Ret.) 
President, Armed Forces Benefit Association
Clifford M. Kendall 
Private Investor and Chairman of the Board of 
Regents of the University System of Maryland
Calvin S. Koonce, Ph.D. 
Chairman, Koonce Securities, Inc. 
Securities Broker/Dealer

James F. Lafond, CPA 
Retired Executive; formerly 
Washington Area Managing Partner, 
PricewaterhouseCoopers LLP
David M. Osnos, Esq. 
Of Counsel, Arent Fox LLP
Jimmy D. Ross 
General, USA (Ret.) 
Senior Logistics Consultant, 
Cypress International, Inc.
Bonnie K. Wachtel 
Vice President and General Counsel, 
Wachtel & Co., Inc.

VSE and Subsidiary Officers

Chairman, President and  
CEO/COO 
Donald M. Ervine

Chief Financial Officer 
Thomas R. Loftus

Group Presidents

Thomas G. Dacus,  
Federal Group

James M. Knowlton,  
International Group

James E. Reed,  
Energy and Environment Group

Carl E. Williams,  
Infrastructure and Technology 
Group

Executive Vice Presidents

Michael E. Hamerly

James W. Lexo, CEO ICRC

Craig S. Weber, Secretary

Senior Vice Presidents

Assistant Vice Presidents

Jack Eisenhauer, Energetics

Jayne M. Tuohig

Vice Presidents

Jerry M. Alvey, Comptroller

Stephen W. Austin

Jim Carey, Energetics

David W. Chivers

Peter J. Desrosiers

James S. Fallon

Harold J. Flammang, Jr.

Richard J. Hannah, Treasurer 

H. Eugene Hosier

Louis G. Lawrence

Joe Latorre, ICRC

Nancy Margolis, Energetics

Marty Martinez, Energetics

Donnelle L. Moten

Kevin R. Mulrenin, ICRC

Michael J. Rayder

Rich Scheer, Energetics

Carl S. Barbour

Charley J. Borns

I. Monique Brooks

Terry D. Chandler

James M. Coritz

Eugene W. Desaulniers III

Roy L. Dooley

John K. Dunning

Normand L. Frigon

James H. Koontz

Elizabeth M. Price

Robert W. Rouzer

Edward C. Webster

Frank G. Wickersham, III

William C. Wright

Assistant Secretary

Donald E. Babcock

2

Facilities

VSE Corporation Headquarters

2550 Huntington Avenue 
Alexandria, Virginia 22303 
(703) 960-4600 or toll-free: (800) 455-4873

VSE Divisions and Subsidiaries

BAV Division
Headquarters  
Alexandria, Virginia 
Service Support:
Charleston, South Carolina 
Alexandria, Egypt 
Tokyo, Japan 
Tuxpan, Veracruz, Mexico 
Suao, Taiwan  
Tsoying, Taiwan 
Rome, Italy 
Gölcük, Turkey 
Ingleside, Texas

Communications and Engineering 
Division
Headquarters  
Shrewsbury, New Jersey 
Service Support:
Baltimore, Maryland 
Fort Monroe, Virginia

Energetics Incorporated
Headquarters 
7164 Gateway Drive, Suite 100 
Columbia, Maryland 21046  
(410) 290-0370
Service Support:
Morgantown, West Virginia 
Washington, D.C.

Engineering and Logistics 
Division
Headquarters 
Alexandria, Virginia 
Service Support:
Barstow, California 
Dublin, California 
Fort Hunter Liggett, California 
Fresno, California 
Los Alamitos, California 
Sacramento, California 
San Jose, California 
College Park, Georgia 
Long Beach, Mississippi 
Weldon Springs, Missouri 
San Antonio, Texas 
Ashland, Virginia 
Ladysmith, Virginia

Bridgeport, New Jersey 
South Brunswick, New Jersey  
Sparta, New Jersey 
Beaufort, South Carolina 
Langley Air Force Base, Virginia

Integrated Concepts and Research 
Corporation
Headquarters  
1033 North Fairfax Street, Suite 400  
Alexandria, Virginia 22314  
(703) 519-9910
Service Support: 
Huntsville, Alabama 
Anchorage, Alaska 
Sterling Heights, Michigan 
Portland, Oregon 
Chantilly, Virginia

Fleet Maintenance Division
Headquarters  
Alexandria, Virginia
Air Force Logistics Division 
(Hampton, Virginia) 
Government Services Division 
(Alexandria, Virginia)  
Naval Air Division (Lexington Park, 
Maryland) 
Ships and Engineering Logistics 
Division (Chesapeake, Virginia)
Service Support:
Riverside, California 
San Diego, California 
Jacksonville, Florida 
Miami, Florida 
Andersen Air Force Base, Guam 
Hickam Air Force Base, Honolulu, 
Hawaii 
Atsugi, Japan 
Osan Air Base, Republic of Korea 
Indian Head, Maryland 

Systems Engineering Division
Headquarters 
Alexandria, Virginia
Service Support:
Warner Robins, Georgia 
Marine Corps Base Hawaii, 
Kaneohe Bay, Hawaii 
Schofield Barracks, Honolulu, 
Hawaii 
Kadena AFB/Torri Station, 
Okinawa, Japan  
Fort Polk, Louisiana  
Sterling Heights, Michigan 
Fort Bragg, North Carolina  
Camp Carroll, South Korea 
Fort Hood, Texas  
Ladysmith, Virginia  
Iraq 
Afghanistan 
Kuwait

0