SAIC's deal for Unisys Federal pays dividends for growth
Leaping to No. 5 on the 2021 Top 100, Science Applications International Corp. leaned on Unisys Federal to achieve growth growth and two other recent deals set the stage for more opportunities ahead.
Science Applications International Corp.’s $1.2 billion acquisition of Unisys Federal in March 2020 was a major contributor to the former's success in the past year.
SAIC saw revenues grow by 11 percent over the previous year, hitting $7.1 billion. Backlog reached $21.5 billion, a 40-percent increase year-over-year. The company earned almost $6 billion in prime contract wins and takes the No. 5 spot on this year’s Top 100 list, up from No. 11 last year.
Three of the biggest wins came out of the acquisition. One is the Transportation Department’s award of a $700 million Enterprise IT Shared Services contract to Unisys Corp. and Veritium Ingenuity.
A second worth $330 million came from the Air Force 557th Weather Wing to manage and modernize hardware and software for its Technology Application Development and Sustainment system. The third is a $1.2 billion Army Corps of Engineers deal known as Revolutionary Information Technology Services. It provides integrated, enterprisewide solutions to deliver shared IT services.
The Army and Air Force wins are the first to help propel SAIC into the Defense Department IT market, whereas the company has historically provided mainly engineering services, said Bob Genter, president of SAIC’s defense and civilian sector.
“This was the first time we’ve been really successful in starting to serve the DOD customer with the IT capabilities in addition to our engineering capabilities,” Genter said. “We’ve really been bifurcated up into this, so it was a great catalyst for that.”
Other notable wins include a $973 million task order from U.S. Customs and Border Protection to continue to operate, maintain and enhance the agency’s system for identifying travelers and cargo that present a security risk to the country, and a $2.9 billion contract to continue to support the Army’s Combat Capabilities Development Command Aviation and Missile Center, Systems Simulation, Software and Integration Directorate.
SAIC still had two main holes in its portfolio since it spun off from Leidos in 2013, Genter said: intelligence and health care.
“Right out of the gate, we attempted to fill that (intelligence) gap with Scitor and Engility, and that gave us really great access through contract vehicles’ past performance into the national security community as well as the space community, and that really rounded out that piece that was missing at the spin,” he said.
To address the health gap, SAIC announced this month that it was acquiring for $250 million Halfaker and Associates, which provides health technology solutions to federal agencies.
Halfaker gives SAIC a crucial entry point to working with the Veterans Affairs Department, “one of the crown jewels in the health care portfolio,” Genter said. The other two are the Health and Human Services Department and Defense Health Agency. “Until we’ve built up all three of those, the opportunity is pretty good inside of the health business for us to be able to grow.”
Another growth area for the company is artificial intelligence. Michael Scruggs joined the company as vice president of artificial intelligence, and SAIC acquired AI-focused Koverse in April.
“AI is embedded in many things that we do, whether it’s the engineering side or it’s the IT side of the house,” Genter said.
Low-code development and analytics “sit inside of almost all of the modernization contracts in some form or fashion. We need to make sure that we’re investing in the long-term and not just the operate and maintain.”
SAIC made other leadership changes, too. For instance, it named Prabu Natarajan as chief financial officer and Bridget Chatman as vice president of inclusion, diversity and corporate social responsibility.
The company has additionally put David Ray in charge of all space business to include NASA, Space Force and National Reconnaissance Office work.
Customer groups are also now reorganized with two presidents in Genter and Michael LaRouche, who oversees space and national security.
“In doing that, we’ve gone to an account management model, where the account is a singular point of focus. We have one leader for each one.”
But 2020 was not without its challenges, mainly ensuring continuing operations as the pandemic shut offices down.
“The biggest challenge that we had is Day One of our acquisition of Unisys happened to be Day One of our office shutdown, so it was a case study in how to do an acquisition and integration while you’re in the middle of a pandemic,” Genter said.
Lessons learned from that may change the company for the better however, Genter added. The flexible work environment instituted temporarily may be here to stay.
“There is a constant competition for talent, and I think the more flexible we can be with recruiting and making sure people understand that they’ve got options in their careers and can manage their work life, I think that will set us apart,” Genter said.
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