Leidos lands $12B U.K. logistics contract
- By Nick Wakeman
- Feb 19, 2015
In its biggest win since changing its name from SAIC, Leidos has won a $12 billion U.K. contract to provide Britain’s Ministry of Defense to manage logistics.
Known as the Logistics Commodities Services Transformation contract, the 13-year deal covers the buying of non-military items such as food and medical supplies as well as providing storage and distribution services for U.K. armed forces.
Defense News estimated that the value of the contract as $10.7 billion to $12.2 billion and perhaps larger if more services are added.
The Leidos team was one of two bidders, according to the U.K. publication The Independent. The other team was led by Babcock International.
"Today's announcement will deliver state of the art warehousing systems to improve availability of supplies and better management of inventory for the Armed Forces," Minister for Defence Equipment Philip Dunne said in a statement.
This is the first time the ministry has tried to outsource something on this scale, according to a Leidos statement.
“This contract represents an important milestone for Leidos and will enable us to bring decades of proven logistics performance to help transform the UK armed forces’ storage, distribution and commodities procurement capabilities – all to ensure front-line troops can get what they need, when they need it,” said company CEO Roger Krone.
Leidos’ team includes Kuehne+Nagel, TVS Supply Chain Solutions, Agility Defense and Government Services, and Thales U.K.
Leidos has been operating in the U.K. for many years under its old name of SAIC.
According to reports in the British press, the Defence Ministry is turning to the outsourcing initiative because of large budget deficits. The contract is expected to save $772 million over its 13 years.
Leidos will be building a new fulfillment center as part of the contract.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.