COMPANY OUTLOOK

How General Dynamics is positioning IT beyond this transition year

General Dynamics is in a transition year with respect to its information technology services segment that beefed up last year with the CSRA acquisition and since whittled down some through a series of divestitures.

But all of those internal ongoings, including the integration, evidently are not holding up how the GDIT business is looking outward to see what market share it can grab for the rest of this calendar year that includes the current and next federal fiscal years.

WT POWER TRAINING

Mastering Stakeholder Engagement

We have joined with MBDi to offer a one-day course on Mastering Stakeholder Engagement as a way to foster closer relationships and win more business.

DATE: Aug. 2

WHERE: Tower Club, Tysons Corner, VA

Click here for more info.

During General Dynamics’ second quarter earnings call with investors Wednesday, CEO Phebe Novakovic gave a pair of numbers that might help paint a picture of how GDIT has and is throwing its weight around with CSRA in tow.

“In the first half, we submitted almost $24 billion in proposals and that was more than the entire submittals in 2018,” Novakovic told analysts. “For the remainder of the year and the second half, we're looking at about $27 billion proposals.

“We submitted about 350 proposals just in terms of numerically in the second quarter and then 650 in the first half. So that tells you that what you need to undergird that kind of execution in proposals and velocity in submittals.”

GDIT revenue fell slightly in the second quarter to $2.2 billion versus the same period last year, although Novakovic said that was mainly due to the divestitures. Since the CSRA deal closed, GDIT has sold the call center business to Maximus and a next-generation 911 division to Comtech Telecommunications Corp.

Those moves fall under the umbrella of General Dynamics’ corporate-wide focus beyond just GDIT on “prudent growth and the quality of earnings,” as GD Executive Vice President Chris Marzilli told us recently as part of our Top 100 series.

Read that article and also click here to listen to both parts of that interview with Marzilli that doubles as part of our Project 38 podcast. Marzilli is the executive that oversees both GDIT and the mission systems hardware segment.

How is that aggressive pace and cadence of bids going so far for GDIT this year? The win rate came out to 74 percent over the first six months with a recompete success record of 92 percent, Novakovic said.

GDIT’s book-to-bill ratio hit 1.2 to show the business is adding contracts to the backlog -- the funded portion now at $8.9 billion -- faster than drawdowns to record sales. Full-year sales guidance for the GDIT segment nudged slightly up to $8.5 billion from $8.3 billion with “some nice growth in 2020,” Novakovic said.

Clearing those recompete hurdles gives more comfort and freedom to chase new business that includes the types of large, complex technology services jobs GDIT feels better positioned for with CSRA in the equation. GDIT has a central team focused on opportunities worth at least $500 million.

That includes a pair of potential opportunities to take work away from competitors, including the massive Navy “NGEN” contract for broad IT and network services held by Perspecta for nearly two decades.

GDIT, Perspecta and a third known bidder in Leidos will have to wait until early next year to find out who wins the lucrative $3.4 billion recompete that is poised as a flagship program to showcase IT modernization skills at scale.

NGEN is not the only big fish opportunity GDIT might have on its radar. In a July 19 research note for investors, analysts at investment bank Cowen & Co. pegged GDIT as a potential bidder for the almost $8 billion “DEOS” contract to integrate email and calendaring services for the Defense Department, plus the potential $6.5 billion “GSM-O” contract to support DOD’s global information grid that Leidos is an incumbent on.

Also in its earnings release, GD lifted its revenue forecast for mission systems from $4.8 billion to $ billion for this year. Corporate-wide sales should total $39.2 billion, also a slight bump from prior expectations of $38.5 billion.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • POWER TRAINING: How to engage your customers

    Don't miss our Aug. 2 Washington Technology Power Training session on Mastering Stakeholder Engagement, where you'll learned the critical skills you need to more fully connect with your customers and win more business. Read More

  • PROJECT 38 PODCAST

    In our latest Project 38 Podcast, editor Nick Wakeman interviews Tom Romeo, the leader of Maximus Federal about how it has zoomed up the 2019 Top 100. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.