SAIC gets aggressive and wins big
Company targets larger contracts to fuel growth
- By Nick Wakeman
- Jun 09, 2011
When a company measures its revenue in the billions of dollars and has the growth expectations of the public markets, it needs to win large contracts and task orders.
For Science Applications International Corp., 2010 was a year when its wins lived up to its size and growth expectations.
When asked to name a top accomplishment from the past year, SAIC Executive Vice President James Cuff quickly rolled out an impressive statistic: 26 wins, each worth $100 million or more. One win was worth $2.5 billion.
“The wins are reflective of us becoming much more aggressive as a prime contractor,” said Cuff, who oversees SAIC’s business development, strategy, and merger and acquisition activities.
The company’s success in 2010 was enough to garner it the No. 6 spot on the 2011 Top 100 with $5.2 billion in prime contracts.
2011 is off to a similar start, with nine wins on the books worth more than $100 million each.
The company is particularly proud of the 10-year, $2.5 billion Vanguard contract to run the IT infrastructure for the State Department’s Bureau of Information Resource Management. “It is a roll-up of several other programs,” Cuff said.
The success of winning the large number of $100 million-plus contracts is the result of concentrated effort at SAIC.
“When you get to $11 billion [in annual revenue], to move the needle you have to open up the aperture of what you bid on and be more aggressive,” Cuff said.
The company concentrated on getting ahead of requests for proposals so it would have “total visibility into major opportunities,” he said. “We created dedicated capture teams well in advance to pursue them.”
Besides the dollar value, the win on the State Department contract is important because it is a new customer for SAIC and it is difficult work, Cuff said.
“The work is geographically dispersed, technologically challenging, and there is a high level of cybersecurity needs,” he said.
Cuff said the company’s growth strategy is focused on five segments of the market:
- Intelligence, surveillance and reconnaissance.
- Logistics, readiness and sustainment.
- Health IT.
“When we look at the overall government, our market is flat,” he said. “But we picked our strategic growth areas because we see enduring growth patterns, and we already are established in those areas.”
SAIC has always been an active acquirer of other companies, and the deals it pursues are focused in those five market segments, Cuff said.
“We are looking for companies that can bring us access to new customers or a capability we don’t have,” he said. “The acquisition also should benefit a large portion of the company.”
For example, SAIC acquired CloudShield, a cybersecurity company, in February 2010 and made it part of the company's Intelligence, Security and Technology Group. But the technology has applicability in the energy and health IT markets, Cuff said.
“We want to embed cyber into our noncyber offerings,” he aid. “There isn’t a customer we have that isn’t worried about protecting their data,” he said.
SAIC opened its Cyber Innovation Center last year in Columbia, Md., as a place to do research and work with customers in preparing, protecting and responding to cyber threats, he said.
Having the center will help SAIC take its cyber capabilities into new markets and add cyber capabilities to projects as a way of making the company’s proposals stand apart from competitors, Cuff said.
Similarly, analytics and modeling and simulation are other areas that cut across markets, especially as customers become more budget-conscious, he said.
Modeling and simulation tools allow customers to test and evaluate systems without going through the higher expense of building an actual system and testing it. “Everyone is under budget pressures,” he said.
With the current budget situation, it is critical that SAIC stay close to its customers and be agile as needs arise. “While we are a big company and geographically dispersed, we always stay close to the customer and partner with them,” Cuff said. “It goes back to our entrepreneurial roots, and it is something we strive to do and something we do very well.”