Uncertainty in the market place isn't deterring SAIC's growth plans as it focuses on keeping its current customers happy and targeting new opportunities in cybersecurity and driving down IT infrastructure costs.
In a market characterized by uncertainty, Science Applications International Corp. has adopted a three-word maxim to help carry the company forward: Protect, Expand and Grow. Since splitting in 2013 from what is now called Leidos, the government services company has deployed this conceptual framework to guide its business strategies and objectives.
“It’s a great way for us to think about the business and drive growth in the business,” said Nazzic Keene, SAIC sector president. “First and foremost, we want to protect the work we have and the customers we serve today. Certainly, as we work with our customers, we are looking for ways to either help them reduce costs or better serve their missions and leverage their capabilities across the federal service lines in doing so.”
SAIC’s expansion strategy, involving selling the breadth of SAIC’s expertise to current customers, and its growth efforts, focused on bringing in new customers, are areas where the company has seen “great seen success across the portfolio” over the last 12 to 18 months, Keene said. The focus on business development has created “momentum” for the company, she added.
The company ranks at No. 10 on the 2016 Washington Technology Top 100 with $2.5 billion in prime contracts.
Among the contract wins last year buttressing its business development, Keene said, was a task order from the General Services Administration valued at a potential $549 million to provide an array of information technology services to the agency’s 11 regions and global operations. Another significant award was a contract from the Federal Aviation Administration for controller training and training-related support services with an estimated value of $425 million and a maximum contract ceiling of $727 million.
“We saw very strong performance on the business-development side last year, which creates opportunities for us to build on that momentum going forward,” she said.
On the acquisition side, it’s been about a year since SAIC acquired Scitor, a company with long-standing customer and industry relationships in the intelligence community, a move that aligned well with SAIC’s market-expansion strategy. However, in its latest earnings report, SAIC said Scitor revenue fell by $24 million to $428 million, while SAIC’s total revenue grew 12 percent to $4.3 million for the year.
Despite Scitor’s 5 percent slide in revenue, SAIC officials are “still incredibly bullish and pleased with how the acquisition has gone,” Keene said. “It adds tremendous value to our organization because it expands our market into the intelligence community and, as it continues to do that, we’ve seen good pipeline growth in the intelligence community and the Air Force market. As a result of the acquisition, we’re also able to sell SAIC’s core capabilities in that particular market. We remain very, very confident with the acquisition.”
In other areas, SAIC is putting increased focus on cyber security and looking for innovative ways to drive cost out of IT infrastructure, Keene said.
SAIC is also investing more in its employees. “It’s a renewed energy on the people aspect of our strategy,” Keene said. “We are fundamentally a people business. The strongest and most important aspect that we have as company is our incredibly talented workforce and our people. We want to ensure that we have the best and brightest and best workforce serving our customers.”
The push to give more federal business to small companies is another a positive development, Keene said. “We are huge advocates of leveraging small business at the enterprise level and will continue to be so,” she said. “So we try to pay attention to what is happening with procurement as it relates to small business, making sure that we play the appropriate role.”
The company’s primary impediment to meeting its objectives is a market environment hit hard by federal spending trends. “The market is still relatively uncertain,” she said. “We certainly don’t see a lot growth as it relates to new initiatives coming out of the government. We do believe that we have an opportunity to modestly grow in the years ahead by serving our customers and bringing the full capabilities of SAIC to bear.”
The coming election and impending change in administrations in January create an even more tentative market. “We can’t predict what’s going to happen with whoever gets in office,” Keene said. “We don’t expect major changes. But it’s something we pay attention to and we’re sensitive to as we get closer to the election cycle and as important procurement decisions are getting made, going through the normal process with the move into the next fiscal year for the government.”