Brains behind the brawn: in the complex world of privatized defense, three firms are giving the military its best weapon--technology.

Among the many lessons government agencies learned after hijacked jetliners plowed into the World Trade Center and the Pentagon on Sept. 11, 2001, a key one involved how computer systems are bought and installed.

"All the technology the government acquired from the early to mid-'90s through the early 2000s was acquired individually by agencies and departments of government," says Joseph M. Kampf, president and CEO of defense contractor Anteon International. "None of it was a coordinated effort to create interoperability. The terrorists took advantage of the fact that they could get in here easily, on false IDs, get on a plane, hijack the plane and carry out their stated goal. We bought all this technology, but none of it talks to each other."

Getting disparate IT systems to communicate is a daunting task, as is creating the intelligence, surveillance and control platforms from which to run the nation's wars in Iraq and Afghanistan. The extent of private-sector involvement has grown to levels previously unheard of. Yet that's just what Fairfax, Va.-based Anteon does, along with CACI International and Praxis Engineering Technologies. They are providing the brainpower for the U.S. government's defense and security efforts. All three are adept at integrating different technological systems, designing new software and providing the specialized training the government needs.

These companies are playing critical roles because information is now seen as a "force multiplier," an important point because there are far fewer military personnel today than even during the First Gulf War. Dealing with such shortages has been a rude awakening for President George W. Bush as U.S. forces struggle to occupy Iraq and snuff out Al Qaeda terrorists globally.

Such scrounging by the Defense Department also can create big pitfalls. In early May, CACI was implicated in the abuse of prisoners in Iraq. Press reports quoting a classified Army report said two CACI interrogators were involved. CEO and Chairman J. Phillip "Jack" London told analysts at an emergency conference call May 5 that his firm had heard nothing about the matter, but said he was launching his own probe.

CACI's dilemma shows just how dicey the world of private defense contracting has become. Contractors have moved from their traditional battlefield chores of running mess halls to interrogating prisoners, a gritty, nasty job usually handled by military intelligence officers.

Yet the scathing investigation of pre-9/11 intelligence shortcomings showed that the federal government simply can't fight terrorism without the private sector, especially when it comes to technology. "Finally, we realize that this is a threat that has to be dealt with immediately, urgently and that a lot of money needs to be spent to do a couple of things that weren't done over the prior 10-year period," says Kampf.

When money and technology are used well, the results can be dramatic. In one example, a couple hundred Special Forces troops riding on horseback and using lasers to mark Al Qaeda targets for smart bombs managed to conquer Afghanistan with their Northern Alliance allies within a few months in 2001 and 2002. Thousands of Soviet troops failed to do that over a 10-year period in the 1980s.

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But, of course, getting systems to work in unison isn't cheap. Bush has proposed a new defense budget for fiscal 2005 of more than $401.7 billion, a 7 percent increase over the previous year. (That's not including an extra $50 billion to continue occupying Iraq and another $47.4 billion for the new Department of Homeland Security.)

Poised to enjoy the largesse, Anteon, CACI and Praxis have been strong financial performers. Anteon has grown from $100 million in revenue and 1,100 workers in 1996 to $1.2 billion in revenue and 7,600 workers today. A public firm since 2002. Anteon has a contract backlog of $5.4 billion. It manages communications for the Federal Emergency Management Agency (FEMA) as well as NATO's intelligence system. Ninety-one percent of its revenues come from the Departments of Defense and Homeland Security and the intelligence community. Among other military applications is work on the Aegis anti-ballistic missile system that might be deployed on cruisers or submarines to intercept any nuclear-tipped missile that North Korea might fire.

Having introduced a new foreign national identity-card system to replace the "green" cards in 1997, Anteon is ready to bid for what could be a huge new contract to completely revamp the State Department's passport system, possibly with biometric identification systems. Globally, the market for identification cards alone could be as high as $100 billion, says Kampf.

Jokingly referred to as "Captains, Admirals and Colonels, Inc.," CACI is the grandfather of the defense technology firms. Founded 24 years ago, it has "a very long, enviable and consistent history with lots of M & A activity," says Mark Jordan, an analyst with A.G. Edwards in St. Louis. Located minutes from the Pentagon in Arlington, Va., it is poised to break the $1 billion revenue mark through its acquisition of the defense unit of American Management Systems for $415 million. CACI is gaining some 900 engineers with hard-to-acquire top-level security clearances in the deal. In the three months ended March 31, sales to the Pentagon increased 37 percent, as earnings rose to $15.8 million on revenue of $288.4 million.

The powerhouse behind CACI's steady growth is CEO London--no stranger to tense international conflicts. In October 1962, London, then a Navy pilot, was sitting anxiously in the cockpit of his SH3A Sikorsky helicopter on the aircraft carrier USS Randolph. President John F. Kennedy had just ordered a naval blockade of Cuba in to force the Soviet Union to remove its nuclear missiles. London waited for details of his mission to locate and, if necessary, destroy Soviet submarines. "We didn't have the Internet, we didn't have TV, we didn't have the communications you do now," says London. "What you had was a clipboard carried around the flight deck by a private in the Marine Corps with a pistol on his side."

Forty-two years later, the clipboard is gone, replaced by a battery of digital communications gear, GPS indicators and satellite imagery, all linked by sophisticated software. What had been a trickle of combat data in 1962 became a torrent by the First Gulf War in 1990. When the U.S. invaded Iraq last year, the volume was eight to 10 times greater still, London estimates.

CACI is known for its command-and-control systems for the Army and also works with the Coast Guard, Customs and other domestic services. In one project, CACI is busy helping the Army Signal Corps in developing new types of communication gear for Special Forces. CACI's involvement in prisoner interrogation represents "less than 1 percent" of the firm's revenues, London says.

Though much smaller than the others, privately held Praxis Engineering has seen its revenues shoot up 82 percent to $8.5 million from 2002 to 2003, says President William S. Dunahoo Jr. Although its executives won't comment, Praxis is believed to work with the ultrasecret, code-breaking National Security Agency, which is headquartered just a mile or so from Praxis at Ft. Meade, Md. NSA constantly monitors the ether looking for communications that might pinpoint the location of the elusive Al Qaeda kingpin Osama Bin Laden.

Praxis handles security on other fronts, too, such as contracts with the Drug Enforcement Administration and the new Transportation Security Administration of the Department of Homeland Security.

One factor that has allowed the relatively small defense companies to crack markets traditionally dominated by big contractors is that the nature of war has changed. Increasingly, the defense community talks about conducting "asymmetrical warfare," in which a powerful but muscle-bound U.S. military should, in theory, be able to deal with tiny cells of highly disciplined terrorists rather than hundreds of Soviet tanks.

What happened on 9/11 is a case in point. In New York City, the FBI's land line was cut, so agents couldn't even call across the Hudson River. And FEMA was ill-equipped for the scale of the attacks. Anteon had built FEMA's National Emergency Management Information System between 1995 and 1999, linking 70 places across the country in case of a natural disaster. "The FEMA system is a shared information database but not to the extent that it could respond to a terrorist attack," says Kampf.

Information flows are also critical in locating the bad guys. When Al Qaeda zealots hide in caves to avoid smart bombs, they aren't really out of touch. "Their communications are as sophisticated and complex as our own because they can go to Radio Shack just like we can," says Jerry L. Kaufman, a member of Praxis's management team. The terrorists have been known to use common, but effective, off-the-shelf data encryption devices first sold in retail electronics stores back in the 1980s.

In some ways, the defense firms are similar to the typical 1990s tech high flyers, but some things set them apart. For one, their work depends on security clearances, which can take up to two years to obtain. And many of their workers are former military officers or enlisted men and women.

Both Anteon and CACI get good reviews from analysts who generally rate each firm a "buy." One question for both of them, however, is how long they can stay independent. Defense giants General Dynamics, Lockheed-Martin and Northrop Grumman all want IT services. General Dynamics made three major IT company acquisitions last year, and Lockheed-Martin is currently acquiring Titan, a $2 billion tech services firm, notes analyst Jordan.

While both London and Kampf say they want to stay independent, some analysts aren't convinced they can. William R. Loomis, an analyst at Legg Mason, notes that although growth for federal IT firms will cool off in 2005, the big defense contractors still want technology companies that'll grow faster than the traditional metal benders. It helps to be a fast mover in a world that serves up such cunning enemies as Bin Laden and Al Qaeda. As CACI's dilemma shows, the new world of private defense work can be confusing and messy. But demand for private sector help is certain to remain high.