SAIC's three steps for reinvigorating its bids

Just about everything on Toni Townes-Whitley’s agenda as CEO of Science Applications International Corp. feeds into its push to reinvigorate the company's organic growth trajectory.

That has resulted in changes to SAIC’s bid profile in terms of not just the contracts to pursue, but also how the company goes about those pursuits and what it wants to tell the customer.

During SAIC’s second quarter earnings call Thursday, Townes-Whitley told investors the company is “bidding more into enterprise and mission IT” than it has in prior years.

SAIC is also ramping up its push for fixed-price contracts, the type that put the onus on the contractors to bring in efficiencies and savings. That brings a potential upside in profits if everything goes according to plan.

Then there are the technology areas, and approaches, Townes-Whitley has identified almost from the very start as those that SAIC sees as helping it stand out from the field.

“We are tracking the bids with the use of our factory differentiators, and we see an increase in uptick in the use of those differentiators across operational AI (artificial intelligence), digital engineering, secure cloud as well as some of the work that we're doing with secure data platforms,” Townes-Whitley told analysts.

During her opening remarks, Townes-Whitley characterized SAIC’s emphasis on improving business development as a three-step process. It begins with “Bid More,” then to step two of “Bid Better,” then of course “Win More” as number three.

As she has before, Townes-Whitley acknowledged that SAIC’s bid velocity had dropped over the past three years and reversing that trend is necessary if “we were going to underpin the kind of growth that we are setting” and meet “expectations for ourselves.”

SAIC pegged its fiscal year 2024 submit volume at $17 billion and is aiming for a fiscal 2025 figure to hit $22 billion. At roughly halftime in its fiscal 2025, the number is $14.5 billion which puts the company more than halfway through.

Bid Better involves her move to centralize SAIC’s pipeline and processes, plus pick the spots where the company can focus its efforts. The civilian market is one of those priority areas, as are enterprise and mission IT.

Win More appears self-explanatory, but requires everything in the first and second steps to work accordingly. One of Townes-Whitley’s first moves as CEO was to centralize and standardize everything SAIC does on the business development front, an effort to make sure all three of those steps happen.

“The centralization allowed us to allocate resources much more dynamically across the full enterprise towards the bids that needed our attention, the quick determination of whether a bid was qualified, so increasing our conversion rate to from an unqualified to a qualified bid, and again, the resource allocation of our talent towards those bids,” she said. “That's all improved our submission process in terms of the number of bids.”

Revenue of $2 billion was 2% higher than the prior year period, while profit of $170 million showed a 2% year-over-year decrease in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

SAIC held to its full fiscal year outlook with revenue of $7.35 billion-to-$7.5 billion on adjusted EBITDA of $680 million-to-$700 million, indicating an adjusted EBITDA margin of 9.2%-to-9.4%.