American Management Systems
| Company type | Private |
|---|---|
| Industry | Management consulting, Technology services |
| Founded | 1970 |
| Founder | Charles Rossotti, Ivan Selin, and three other former Defense Department officials |
| Defunct | 2004 |
| Fate | Acquired by CGI Group; defense division sold to CACI |
| Headquarters | Arlington, Virginia (later Fairfax, Virginia) , United States |
Area served | United States, Europe, International |
Key people | Ivan Selin (founder and CEO), Charles Rossotti (founder and CEO), Alfred T. Mockett (CEO), Paul Brands (CEO), Bill Purdy (Interim CEO), Jerrold M. Grochow (Director of AMSCAT) |
| Products | Consulting services, tailored software solutions, telecom billing platforms (Kenan’s Arbor-B/P, PRISM, Spectrum 2000, Tapestry) |
Number of employees | 9,000+ (1990s), 6,300 (2002) (1990s, 2002) |
American Management Systems, Inc. was a technology-driven management consulting company established in 1970 by five former officials from the Defense Department, including prominent founders Charles Rossotti and Ivan Selin. Originally based in Arlington, Virginia, AMS capitalized on pioneering work in relational databases and attribute-value frameworks, with Pentagon colleague Hugh Everett III briefly holding a minority stake. The firm specialized in consulting services and tailored software solutions for major government and corporate clients, generating significant revenue primarily through federal contracts.
During the 1990s, AMS grew to exceed 9,000 employees and operated multiple offices throughout the United States and internationally, with European branches making a notable contribution to overall income. Among its landmark projects were the development of New York City’s accounting system during its financial crisis recovery and the delivery of the Defense Department’s acclaimed Standard Procurement System in 1997.
In 1993, AMS established the AMS Center for Advanced Technologies (AMSCAT) located in Fairfax, Virginia. Dr. Jerrold M. Grochow was appointed as director to spearhead innovation efforts consistent with the company’s strategic focus on technology leadership.
The firm underwent a major transformation in 2004 when Canada’s CGI Group acquired it, while AMS’s federal defense division was divested to CACI, signaling a substantial change in its organizational structure and global footprint.
Telecom Practice
Throughout the late 1990s and early 2000s, American Management Systems (AMS) emerged as a prominent telecom consulting organization within the U.S., experiencing rapid growth by harnessing expertise from Competitive Local Exchange Companies. AMS gained market dominance by providing telecom clients with Kenan’s Arbor-B/P, an award-winning solution for convergence billing.
AMS in Europe
In the early 1990s, AMS supplied the PRISM billing platform to PacTel Cellular (later AirTouch). As GSM technology expanded across Europe, AirTouch International invested in overseas GSM operators, enabling AMS to broaden its billing system—renamed Spectrum 2000—throughout the European market. By 1992, AMS had established itself as a leading billing system provider for emerging European mobile telecommunications companies, extending its reach into Portugal, the United Kingdom, Germany, the Netherlands, Belgium, Spain, Switzerland, and Poland. However, AMS allocated insufficient resources toward service delivery and business development. Instead, it invested over $100 million in creating Tapestry, an advanced customer care and billing platform for German fixed-line operator Arcor. Limited promotion of Tapestry contributed to operational difficulties and significant workforce reductions in Europe by 2002. Additionally, AMS lost market share when D2 selected rival Amdocs for its billing services.
By 2002, AMS employed roughly 6,300 personnel worldwide, generated revenues of $986 million with earnings of $21 million, and maintained operations from 51 global offices.
Lawsuits, Divestiture, and Sale
In 1999, Mississippi terminated an $11.2 million contract with AMS aimed at modernizing its tax system and initiated a lawsuit seeking $985 million. A jury awarded $474.5 million in damages in 2000, triggering a sharp decline in AMS’s stock price from 44⅜ to 14. The dispute was later resolved through a $185 million settlement.
Another contract with the Federal Thrift Investment Board was canceled in 2000 due to project delays; AMS agreed to a $5 million settlement in 2003. A Senate investigation attributed failures to contractual shortcomings and design flaws.
In December 2002, AMS divested its Global Energy Group to Wipro Technologies based in Bangalore.
Alfred T. Mockett joined as CEO in 2001 with ambitions to increase sales from $1.1 billion to $3 billion via acquisitions and by positioning AMS as a leading system integrator with plans for a significant merger. When this approach did not succeed, he facilitated the company’s sale. In March 2004, Canada’s CGI Group purchased AMS’s commercial and non-defense government units for $858 million. Due to restrictions on foreign ownership, the defense and intelligence divisions were sold separately to CACI for $415 million. Initially, CGI retained the AMS brand; their U.S. headquarters are located in Fairfax, Virginia.
Location
For more than twenty years, the company maintained its headquarters in Arlington, Virginia, with a view of Washington DC. During the early 1990s, AMS shifted its main office to Fairfax, Virginia to better accommodate its growing international business activities.
List of chief executive officers of AMS
- Ivan Selin – 1970 through the late 1980s
- Charles O. Rossotti – Late 1980s until the mid-1990s
- Paul Brands – Mid-1990s up to October 25, 2000
- Bill Purdy (Interim) – October 26, 2000 to November 30, 2001
- Alfred T. Mockett – December 1, 2001 through 2004