San Diego Business Journal

EPSILON SYSTEMS SOLUTIONS INC.

CEO: Bryan Min.

Revenue: Not disclosed; $66 million in 2006, according to Inc. 5000 list.

No. of employees: 1,003 companywide; about 600 local.

Investors: Not disclosed.

Headquarters: Kearny Mesa.

Year founded: 1998.

Company description: Diversified contractor to federal government agencies, including the Department of Defense, Department of Energy and Department of Homeland Security.

Epsilon Systems Solutions Inc., a San Diego government contractor working mainly with federal agencies, said its workforce has grown by more than 100 people this year and passed 1,000 this month.

“As of last Thursday (Oct. 20) we’re at 1,003,” said Pat Moneymaker, a new employee himself who was named president of the company’s Mission Solutions Group this month.

The majority of Epsilon’s staff increase is coming from new and enhanced contracts it has with the U.S. Navy involving maintenance services it provides to ships, but the business is also expanding in software and engineering services to the Navy and other agencies, Moneymaker said.

These include engineering support services to the Navy’s Space and Naval Warfare Systems Command, the unit based in San Diego in charge of developing and procuring new technologies for the service.

The company also has contracts with the Department of Defense, the Department of Homeland Security, the Department of Energy and the Department of the Interior.

Moneymaker, a former Navy pilot and member of the Blue Angels demonstration squadron, is heading up the group involved with white collar, engineering services. The company’s larger group called Mission Readiness provides maintenance services to ships and accounts for about 75 percent of its employees, while Mission Solutions contains the other 25 percent, he said.

Efficiency Wanted

Despite expected cutbacks from a contracting federal defense budget for this fiscal year, some companies may benefit from the changes, especially if they show a strong track record like Epsilon, Moneymaker said.

“We think our entrepreneurial spirit linked with the … personal qualifications of our people will put it at the forefront of those companies showing cost savings,” he said.

Tony Nufer, a director with the local chapter of the National Defense Industrial Association, a trade group for defense contractors, said the federal government has implemented some cost saving measures, but declined to call these staffing cuts.

“Some programs are ‘leaning’ out a little bit, but there are some other programs such as those involved in UAVs (unmanned aerial vehicles) and in tactical communications that are still very strong,” Nufer said.

Ups and Downs

For example, General Atomics Aeronautical Systems Inc. in Poway, where UAVs are manufactured, said its local employment increased by 541 — to 3,873 — in the 12 months leading up to Sept. 1.

However, another major defense contractor, Science Applications International Corp., which relocated its original San Diego headquarters to McLean, Va., in 2009, reported its local head count declined to 3,420 employees from 3,550 in February.

Mike Woiwode, a defense consultant based in Coronado and a member of its City Council, said practically all defense contractors are looking to survive in light of the coming budget cuts. Epsilon’s apparent reorganization is a likely maneuver to better position itself as the flow of defense dollars slows next year, he added.

In general, Woiwode said the defense budget will include decreases in platform-related programs such as weapons, ships or aircraft, while beefing up other areas, particularly those in computer warfare-related sectors.

“There’s a lot of concern (among defense contractors),” he said. “There are some companies that are laying people off … and there may be a lot more of that happening in the next six months to a year.”

But that’s not happening at Epsilon Systems. In an interview with CEO and founder Bryan Min in February, he revealed that the company’s employment of 875 would increase by at least 100 people this year.

The company no longer discloses revenue figures, but the last time it did, in 2006 for inclusion on the Inc. 5000 list, it said its annual sales were $66 million.

Moneymaker said he has known Min since the latter started his business in 1998 and Moneymaker was heading up Ocean Systems Engineering, a contractor to Spawar.

Before joining Epsilon, Moneymaker was most recently the president and CEO at Proxy Aviation Systems Inc., a Maryland startup focused on UAV control technologies; and before that, the chief executive at Kforce Government Holdings.