Booz Allen Hamilton Holding Corporation (informally Booz Allen) is the parent of Booz Allen Hamilton Inc., an American government and military contractor specializing in intelligence, technology, and cybersecurity. The company is headquartered in McLean, Virginia, in the Washington metropolitan area, with 80 additional offices around the globe. Booz Allen's stated core business is to provide consulting, analysis, and engineering services to public- and private-sector organizations and nonprofits.
It is a major provider of cybersecurity services to the U.S. Security and Exchange Commission. Nearly all of the company's revenue comes from U.S. government contracts.
History 20th century
The company that was to become Booz Allen was founded in 1914, in Evanston, Illinois, when Northwestern University graduate Edwin G. Booz founded the Business Research Service. The service was based on Booz's theory that companies would be more successful if they could call on someone outside their own organizations for expert, impartial advice.Booz Allen History. Boozallen.com. Retrieved on June 25, 2013. Booz's service attracted a number of clients, such as Goodyear Tire & Rubber Company, Chicago's Union Stockyards and Transit Company, and the Canadian Pacific Railway.
During the following three decades, the company went through a number of name changes and business models, eventually settling on Booz, Fry, Allen & Hamilton, named after their partnership in 1936. Before George A. Fry's departure in 1942, the company's name was changed again to Booz Allen Hamilton.
The post-World War II era saw a shift in the company's client pool, with many contracts coming from governmental institutions and different branches of the Armed Forces.
Edwin G. Booz died in 1951. The company received its first international contract two years later, in 1953, to help reorganize land-ownership records for the newly established Philippines government.
Booz Allen has been credited with developing several business concepts. In 1957, Sam Johnson, great grandson of the S.C. Johnson & Son founder, and Booz Allen's Conrad Jones published How to Organize for New Products which discussed theories on product life-cycle management. In 1958, Gordon Pehrson, deputy director of U.S. Navy Special Projects Office, and Bill Pocock of Booz Allen Hamilton developed the Program Evaluation and Review Technique (PERT). In 1982, Booz Allen's Keith Oliver coined the term "supply chain management".
The partnership was dissolved in 1962 and the company was registered as a private corporation. In 1998, Booz Allen Hamilton developed a strategy for the IRS to reshuffle its 100,000 employees into units focused on particular taxpayer categories.Booz Allen's Sweet Spot, November 24, 2002
21st century Bloomberg named Booz Allen "the world's most profitable spy organization". According to an Information Week piece from 2002, Booz Allen had "more than one thousand former intelligence officers on its staff." According to its own website, the company employs more than 10,000 personnel who have cleared TS/SCI background checks.
In 2006, at the request of the Article 29 Working Party (an advisory group to the European Commission), the American Civil Liberties Union (ACLU) and Privacy International (PI) investigated the U.S. government's SWIFT surveillance program, and Booz Allen's role therein. The ACLU and PI filed a memo at the end of their investigation, which called into question the ethics and legality of a government contractor (in this case Booz Allen) acting as auditors of a government program, when that contractor is heavily involved with those same agencies on other contracts. The basic statement was that a conflict of interest may exist. Beyond that, the implication was also made that Booz Allen may be complicit in a program (electronic surveillance of SWIFT) that may be deemed illegal by the European Commission.Booz Allen's Extensive Ties to Government Raise More Questions About SWIFT Surveillance Program. Aclu.org (September 26, 2006). Retrieved on June 25, 2013., A Memo by the American Civil Liberties Union and Privacy International For the Article 29 Working Party of the European Commission. privacyinternational.org (September 27, 2006).
A June 28, 2007 article in The Washington Post related how a United States Department of Homeland Security contract with Booz Allen increased from $2 million to more than $70 million through two no-bid contracts, one occurring after the DHS's legal office had advised DHS not to continue the contract until after a review. A Government Accountability Office (GAO) report on the contract characterized it as not well-planned and lacking any measure for assuring valuable work to be completed. Elaine Duke, the department's chief procurement officer, acknowledged the problems with the Booz Allen contract, but said those matters have been resolved. She defended a decision to issue a second no-bid contract in 2005 as necessary to keep an essential intelligence operation running until a competition could be held.
In 2008, the commercial arm of Booz Allen split off to form Booz & Company. In 2013, Booz & Company was acquired by PwC and renamed as Strategy&. Since then, Booz Allen has re-entered commercial markets. In 2010, Booz Allen went public with an initial public offering of 14,000,000 shares at $17 per share. In 2012, Booz Allen purchased the Defense Systems Engineering & Support division of ARINC, adding approximately 1,000 new employees to its roster. In 2014, Booz Allen acquired Epidemico.
On July 11, 2011 the group Anonymous, as part of its Operation AntiSec,Bora, Kukil. "Why Did Anonymous Hack Booz Allen Hamilton, Release 90K U.S. Military E-mails?" International Business Times. July 11, 2011. Retrieved on June 28, 2013. hacked into Booz Allen servers, extracting e-mails and non-salted passwords from the U.S. military. This information and a complete dump of the database were placed in a file shared on The Pirate Bay.Henry, Alan. "Anonymous hacks Booz Allen Hamilton, 90,000 military emails stolen ". Geek.com. Ziff Davis. July 11, 2011. Retrieved on June 28, 2013. Despite Anonymous' claims that 90,000 emails were released, the Associated Press counted only 67,000 unique emails, of which only 53,000 were military addresses. The remainder of the addresses came from educational institutions and defense contractors. Anonymous also said that it accessed four gigabytes of Booz Allen source code and deleted those four gigabytes. According to a statement by the group, "We infiltrated a server on their network that basically had no security measures in place."Greenberg, Andy. "Anonymous Hackers Breach Booz Allen Hamilton, Dump 90,000 Military Email Addresses". Forbes. July 11, 2011. Retrieved on June 28, 2013.Gohring, Nancy. "Anonymous hacks Booz Allen, posts 90K military email addresses and passwords ". Computerworld. July 11, 2011. Retrieved on June 28, 2013. Anonymous accused Booz Allen of working with HBGary Federal by creating a project for the manipulation of social media. Anonymous also accused Booz Allen of participating in intelligence-gathering and surveillance programs of the U.S. federal government and, as stated by Kukil Bora of the International Business Times, "possible illegal activities". Booz Allen confirmed the intrusion on 13 July, but contradicted Anonymous' claims in saying that the attack never got past their own systems, meaning that information from the military should be secure. In August of that year, during a conference call with analysts, Ralph Shrader, the chairman and CEO, stated that "the cost of remediation and other activities directly associated with the attack" were not expected to have a "material effect on our financial results".McMillan, Robert. "Booz Allen CEO Downplays Effect of Anonymous Hack". IDG News Service at PCWorld. August 9, 2011. Retrieved on June 28, 2013.
In June 2012, Booz Allen expanded its operations in North Africa and the Middle East, with initial plans to add operations in Kuwait, Oman, Qatar, United Arab Emirates. It planned to later add operations to Bahrain, Saudi Arabia, and Turkey, during a time when those countries, as stated by Jill R. Aitoro of the Washington Business Journal, were "recover[ing] from the turmoil associated with the Arab Spring".Aitoro, Jill R. "Booz Allen Hamilton expands overseas footprint". Washington Business Journal. June 8, 2012. Retrieved on July 27, 2013. The Booz Allen employee base, when it was a part of Booz & Company, had long-term relationships with many North African and Middle Eastern countries; Booz Allen had split from Booz & Company.
In June 2013, Edward Snowden—at the time a Booz Allen employeeEdward Snowden: the whistleblower behind the NSA surveillance revelations. Guardian (June 9, 2013). Retrieved on June 25, 2013. contracted to projects of the National Security Agency (NSA)—publicly disclosed details of classified mass surveillance and data collection programs, including PRISM. The alleged leaks are said to rank among the most significant breaches in the history of the NSA and led to considerable concern worldwide. Booz Allen condemned Snowden's leak of the existence of PRISM as "shocking" and "a grave violation of the code of conduct and core values of our firm".*
The company fired Snowden in absentia shortly after and stated he had been an employee for less than three months at the time. Market analysts considered the incident "embarrassing" but unlikely to cause enduring commercial damage. Booz Allen stated that it would work with authorities and clients to investigate the leak. Charles Riley of CNN/Money said that Booz Allen was "scrambling to distance itself from Snowden".Riley, Charles. "Booz Allen Hamilton in spotlight over leak". CNN/Money. June 10, 2013. Retrieved on June 28, 2013. According to Reuters, a source "with detailed knowledge on the matter" stated that Booz Allen's hiring screeners detected possible discrepancies in Snowden's résumé regarding his education, since some details "did not check out precisely" but decided to hire him anyway; Reuters stated that the element which triggered these concerns, or the manner in which Snowden satisfied the concerns, were not known."Booz Allen hired Snowden despite discrepancies in his résumé". (print title: "Snowden hired despite discrepancies in résumé"). Reuters. South China Morning Post (Hong Kong). June 22, 2013. Retrieved June 22, 2013. On July 10, 2013, the United States Air Force stated that it cleared Booz Allen of wrongdoing regarding the Snowden case.