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) -- In the perfect world, a business's customers would have deep pockets and an insatiable need for things. In other words, the perfect customer is the government.

For Reston, Virginia-based



, the U.S. government is its only customer. For the past 20 years, NCI has been providing government agencies with information-technology and professional-services support. Recently, the company was awarded a $12.7 million contract to install and support a multi-level video-information system at the new U.S. Central Command headquarters at MacDill Air Force Base in Florida. News of this latest contract comes on the heels of the announcement of another order through the military worth a reported $6.4 million.

Projects such as these have led NCI to weather the downturn better than most. Over the past year, its stock has risen 13% as the

S&P 500 Index

fell 7%. The company has seen its revenue climb in each of the past four quarters and boasts a healthy return on equity of nearly 20%. NCI's performance has far outpaced similar government contractors such as

Lockheed Martin



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, which have dropped as much as 28% over the past year. None has increased.

NCI carries a reasonable amount of debt, the servicing cost of which was a mere $162,000 in the second quarter, and has a strong liquidity position with a current ratio of 1.77. Long-term debt has been decreasing recently as the company paid off loans with cash flow rather than rolling the debts over at a high rate due to the state of the credit markets, a good move for a company that has the cash flow to facilitate such a financing strategy.

Much of the company's success can be attributed to its high-caliber employees. According to NCI, of its 2,500 employees, 70% have at least some security clearance while 29% have security clearance of "top secret" or higher. At the senior-management ranks, employees average 25 years of experience with government agencies or within the contractor industry, leading to operational direction dictated by a highly knowledgeable and competent team.

Government spending has been a bridge over the recessionary chasm of the past year. NCI is a firm that benefits from government spending, so now is the time for this small-cap company to shine.

-- Reported by David MacDougall in Boston.

Prior to joining Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.