CACI's CEO weighs in on efficiency and acquisition

CACI International's corporate headquarters in Reston, Virginia. Courtesy of CACI.
In talking with Wall Street, John Mengucci looked to provide a bigger picture for what he would like to see the DOGE efficiency group look at beyond just protest numbers going down.
One public company chief executive, that being Chris Kubasik of L3Harris Technologies, has made his voice heard to the Department of Government Efficiency in an open letter with ideas on changing defense acquisition.
Now a second public GovCon CEO has weighed in on observations he would share with the Elon Musk-led DOGE if asked, that being John Mengucci of CACI International.
In fact, DOGE and acquisition in a second Trump administration was the subject of analyst question number one to Mengucci during CACI’s fiscal second quarter earnings call with investors Thursday.
Kubasik and Mengucci both referenced what often seems to be an endless cycle of protests in their assessments of the overall landscape. But a key statistic to keep in mind when talking about defense acquisition relates to how many contracts get protested.
Large programs are a certainty to be protested after the award, but a study published in 2018 by Rand Corp. found that less than 0.3% of all DOD contracts are the subjects of challenges to the Government Accountability Office.
Kubasik’s letter cites a four-year delay in L3Harris’ work to develop and deliver the Navy’s Next Generation Jammer-Low Band because of a protest cycle. He concedes that some situations require GAO to look at what unfolded, but also suggests contractors be limited to three protests per year and cover the costs of the review if they lose the protest.
On the other hand, Mengucci sought to pivot the conversation about acquisition away from protests. He instead pointed analysts to the front end of the processes and people in charge of them.
“I'd like to look at it from another view, which was maybe spend some money in training acquisition officials to strictly follow the processes they already have to reduce the protesting that is rampant today in the federal government contracting world,” Mengucci told analysts. “There's a lot of acquisition elements in the government that have a near un-blemish record of protests.”
Mengucci pointed out the discussion around acquisition reform has gone on “forever,” and certainly ever since he joined the industry almost four decades ago.
“If we can get people better trained: I think that cuts down, frankly, a very rampant habit of people lose a program, and they protest for the sole purpose of continuing revenue within their own shop,” Mengucci said.
A second idea Mengucci brought up on the call pertains to countering unmanned aerial systems, a mission he said “in the U.S. is very different than outside the continental U.S.”
The drone sightings in New Jersey especially, and other regions as well, put unmanned tech on the forefront of many minds.
Mengucci said he would ask that a “national strategy be required with, frankly, a singular leader” to bring different agencies together and investigate different priorities. He said that person or entity would work with the departments of Defense and Homeland Security, plus law enforcement bodies.
“If we want to make a difference, authorities and who they are granted to will make a world of difference on understanding what those threats are,” Mengucci said.
CACI's fiscal second quarter revenue of $2.1 billion was 14.5% higher than that of the prior year period and includes an organic growth rate of 8.1%. Profit of $232.9 million in the quarter represented a 36.2% year-over-year increase in EBITDA (earnings before interest, taxes, depreciation and amortization).
Reston, Virginia-headquartered CACI lifted both ends of its full-year financial outlook to between $8.45 billion and $8.65 billion in revenue, with EBITDA margin expectations now in the “low 11% range.”
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