Many government contractors view state and local work as a waste of time involving small dollars and difficult, ever-changing regulations. But for several area companies, this business is proving fruitful, particularly as federal spending shrinks. Herndon-based DLT Solutions, which is known as a reseller of computer hardware and software but also provides professional services, saw double-digit revenue growth in 2012. … At Reston-based Maximus, state and local work provided a boost, too. The company has long depended significantly on this business, which makes up about 65 percent of its revenue. Health insurance exchanges and Medicaid program expansion and modernization are a key source of growth, said Bruce L. Caswell, president and general manager of the company’s health services segment. Maximus specializes in managing health and human services programs, from processing applications to providing job placement support….
…But many contractors have had bad experiences with state and local work. Some of the most prominent troubled contracts have been with this type of business. McLean-based Science Applications International Corp., for instance, settled its way out of CityTime, a time-keeping program it ran for New York City but was labeled “a massive and elaborate scheme to defraud the city” by the U.S. Attorney’s Office for the Southern District of New York. Falls Church-based Northrop Grumman had its own troubles when Virginia’s information technology infrastructure — managed through a partnership with Northrop — went down for almost a week, hitting state services from driver’s licenses to tax refunds….