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BUSINESS NEWS JACOBS WINS U.S. ARMY ELECTRONIC PROVING GROUND SCIENTIFIC AND ENGINEERING SUPPORT SERVICES CONTRACT Jacobs Engineering Group Inc. will support the U.S. Army Electronic Proving Ground Scientific and Engineering Support Services, providing test and evaluation for the Army and other Department of Defense agencies. Work will primarily be performed at Fort Huachuca with additional work at Fort Hood, Fort Bliss, Aberdeen Proving Ground, and White Sands Missile Range. “Jacobs has a long history of supporting the U.S. Army, ranging from research and development to test and evaluation, to sustainment and support of complex weapons systems,” said Jacobs Senior Vice President Aerospace and Technology Darren Kraabel. “This award is paramount as we implement our strategy to bring new solutions to the Major Range and Test Facility Bases.” Under this contract, Jacobs will provide a wide variety of distributed network systems testing, cybersecurity, enterprise system testing, electromagnetic environmental effects, intelligence, surveillance and reconnaissance, information assurance, logistics, safety and security, in addition to supporting developmental and operational intelligence, electronic warfare, software, cyber and biometric testing. TRIUMPH AND BOEING SIGN MOA ON EXPANDED PARTNERSHIP Triumph Group, Inc. announced

Take your advice from Mark Zweig to-go.

the signing of a new memorandum of agreement with Boeing . The MOA supports Triumph’s participation in Boeing’s growth platforms within their commercial aircraft, defense programs, and global services market. This expands Triumph’s traditional roles in aerospace structures and precision components into the areas of integrated systems and services. “Boeing is a very important customer, our largest, and we are pleased to expand our relationship with them through the delivery of high quality advanced structures, systems, precision components and MRO support,” said Dan Crowley, Triumph president and CEO. “Building on improved schedule and quality performance on Boeing programs, this announcement reflects both companies’ commitment to ‘Partnering for Success.’ It also reflects our strengthening OEM relationships, in which we are increasingly viewed as a valued partner across our entire range of capabilities.” “We value Triumph’s support on key Boeing programs and look forward to expanding our collaboration to increase productivity, reduce cost and enhance the value of Boeing products and services,” said Boeing Partnering for Success leader Karl Jeppesen. “By working together more closely, we help our customers and one another succeed in an increasingly competitive market.”

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MARK ZWEIG, from page 1

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

❚ ❚ Debt is bad and should be avoided at all cost. Another foolish “rule” to live by. If you can borrow money at 5.25 percent but earn a return of 35 percent on equity, you’d be crazy not to borrow at least some of the capital you need to run your AEC firm. And these numbers are TYPICAL today! ❚ ❚ Salaries for people of equivalent education and experience should be roughly the same, with bonuses being used to take care of your best people. Great – so you make your BEST people assume all the risk for running a profitable enterprise while the worst get their money anyway? This is a fundamentally unfair situation that will run off your best people over time. ❚ ❚ Marketing costs should be minimized because the best form of marketing is word of mouth. I always say, “Word of mouth – you aren’t doing any marketing then.” When I talk to companies that are losing money and I ask them about their lack of marketing, they all same the same thing – they believe in word of mouth. That’s great, except for one thing. People have to TRY you out before they can tell other people how great you are. And they won’t try you if you don’t spend some money on marketing to generate awareness of your firm. ❚ ❚ Overhead should be minimized. The most profitable companies or units inside com- panies that I have ever worked with, serving any specific market, typically have HIGH- ER overhead than everyone else serving that same market. Why? Because they spend more on marketing, IT, and people, and then can charge significantly higher billing rates/fees as a result. Good overhead is good. Bad overhead (people not working, vaca- tion houses, etc.) is another matter. You can’t lump it all into one category. ❚ ❚ Profitability will increase dramatically if we can just boost our utilization rate by “Z” points. Always been a myth. Push utilization and there’s a real good chance that effective multiplier will erode accordingly. It’s much better to look at the revenue factor. That is defined as revenue divided by TOTAL labor. Emphasize that. There’s more than one way to boost that – beyond just overcharging projects. MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

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Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/yr.). $375 for one-year subscription, $675 for two-year subscription. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2017, Zweig Group. All rights reserved.

THE ZWEIG LETTER June 19, 2017, ISSUE 1205

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