TOP 100

TOP 100: SAIC builds on momentum, looks to intell space with latest acquisition

Almost two years after splitting from a parent company of the same name, Science Applications International Corp. is full speed ahead after a few solid contract wins and a major acquisition.

SAIC has earned the No. 8 spot on Washington Technology’s 2015 Top 100 Federal Prime Contractors list, with $2.6 billion in prime contracts.

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“As we looked at opportunities in the M&A space, one of the reasons that we were very interested in Scitor is because it gave us market access to the intelligence community that we did not have inside of SAIC,” said sector president Nazzic Keene.

SAIC dished out $790 million for Scitor Corp. in a deal that closed in early May 2015. Scitor was not originally looking for a buyer, but when SAIC came to the table, the company made a convincing case that the two were a strategic fit.

SAIC took very little intelligence business with it when it split from Leidos in 2013. “[The transaction for Scitor] allowed us to gain market access in the intelligence space in a very material way,” Keene said. Scitor brings access to classified contracts, 1,500 employees and $600 million in annual revenue, pushing SAIC’s total revenue to $4.5 billion and earnings to $321 million.

That is on top of a few sizable contract wins that the company has won since last summer. September 2014 saw the company winning a recompeted $423.8 million contract to provide the military with logistics support and base maintenance contract—and in doing so, beating out four other contractors vying for SAIC’s spot.

A month later in October, SAIC won a similar contract with a ceiling of $240 million to provide logistics support and supply chain management to the Navy’s fleet readiness centers. "We continue to gain momentum in that area," Keene said.

But a recent, $727 million Federal Aviation Administration contract was top of mind for Keene. Under the contract, SAIC will support the FAA’s plan to hire as many as 6,000 new air traffic controllers in an effort to combat a retiring workforce, and SAIC will be providing all training and training program support services.

The FAA contract is a fruit of the company’s labor, Keene said. After the 2013 split, SAIC reorganized its organization with an emphasis on being able to cross its capabilities and do for one customer what the company typically does for another—in this case, SAIC took the training capabilities that it has developed for the Defense Department and applied that to the FAA, Keene said.

This kind of capability sharing would have been nearly impossible at the old SAIC, Keene added. The new SAIC and its current operating structure “allows us and affords us the opportunity to do that in a much easier way, and thereby bringing what we think as great capabilities that were developed and leveraged for one set of customers across the entire portfolio.”

The company will be looking to do more of that moving forward. Keene said that the budget landscape is largely the same now as it has been over the past year, with agencies having little sense of what their budgets are going to look like, and making decisions accordingly.

“We have had a long history of serving the federal government. We have pattern recognition, we understand the market,” Keene said.

While the company intends to move forward and leverage its capabilities across its entire organization, SAIC also plans on leveraging Scitor and doing the same across that organization, as well, Keene said.

About the Author

Mark Hoover is a senior staff writer with Washington Technology. You can contact him at mhoover@washingtontechnology.com, or connect with him on Twitter at @mhooverWT.

Reader Comments

Wed, Jun 10, 2015

The split to LEIDOS/SAIC was a stupid blunder. Both struggle to regain their former market shares. Meanwhile growth of shareholder value (for either) stopped/shrunk. Someone's incentive bonus was the only winner.

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