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Make Money on the New Mercenary Army

So now here we are again, basically at the IPO price. What do you get on the do-over?

Well, DynCorp is certainly a best-of-breed company as the leading provider of civilian police forces overseas -- sometimes known as peacekeepers -- under contracts with the Department of State. It has expanded to provide personal protective services, drug-eradication services and brute force not just for the U.S. government but also for foreign clients such as the United Arab Emirates, Australia, Nigeria and Afghanistan. And its oldest division continues to perform aircraft maintenance work at U.S. military bases worldwide. All told, it has 14,000 people working in 35 countries.

The new sizzle at the company has come not from its biceps but from its brains, as a joint venture in which it is the lead partner won a massive $4.6 billion contract to provide translation services in Iraq. Its new Global Linguists Solutions division, in conjunction with privately held McNeil Technologies, will add materially to fiscal 2008 earnings. The contract, renewable in 20 quarterly installments, calls for DynCorp to provide 6,000 translators in Iraq and up to 1,000 additional U.S. citizens who speak various Arab and Persian dialects to the U.S. Army and other government agencies.

Of course, there is some hair on the story. The linguistics contract was yanked from the Titan division of L-3 Communications (LLL - Get Report), which has lodged a protest. And DynCorp may not be able to fulfill the contract requirements, as Baghdad is not exactly a safe work environment: Titan has reportedly lost 216 employees in the war so far.

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