Science Applications International Corp. comes through its spinoff with a top 20 spot as it continues to put itself in a position for growth.
For some companies, last year was a time of strategic retrenching, but for Science Applications International Corp. it was a year of total overhaul.
SAIC takes its name from the old SAIC, but technically Leidos is the surviving company and SAIC the newcomer. Despite the split, it is ranked No. 19 on the 2014 Top 100 with $1.5 billion in prime contracts during fiscal 2013.
It was a big change, and it wasn’t painless, but CEO Tony Moraco told Washington Technology that things are looking up overall.
“SAIC’s separation from its former parent company, at this point in our early life, has been compelling,” Moraco said. “The feedback we are receiving is overwhelmingly positive, supported by customer-supplied Contractor Performance Assessment Ratings, of which 97 percent expressed satisfaction with our work.”
The customer base isn’t just satisfied, Moraco said – it’s growing.
“We successfully completed last year as a new company with some big wins,” Moraco said, “including a $224 million prime contract from the Federal Retirement Thrift Investment Board and a $900 million prime contract with the Space and Naval Warfare Systems Center (SSC) Atlantic.”
Those contracts are particularly valuable as SAIC cements its new footing in the industry.
“Our biggest challenge was the spin off of our new company,” Moraco acknowledged. “We knew following this separation that SAIC would be more competitive.”
The old SAIC was a contracting monolith, with last year’s split aimed at producing two more agile companies: Leidos focusing on technology, and the new SAIC focusing on government services.
The split seems to be yielding the desired results.
“In the fourth quarter,” Moraco said, “we submitted over $200 million in proposals to customers we had not pursued in the past due to organizational conflict of interests.”
As any split of an $11 billion industry institution would be, the SAIC-Leidos split took a toll, but a weak year like last year might have been the right time to pull the trigger.
Ultimately, things will be better next year, Moraco said, as funding levels under the two-year federal budget deal are better than full-on sequestration.
“We believe customers will have a more stable budget outlook (going forward) to execute their missions and are now able to prioritize their expenditures over a multi-year period unlike what we have seen recently,” Moraco said.