October 13, 2024 | International, Land
Leidos awarded $249 million U.S. Army force protection contract
The follow-on contract has a six-year period of performance with a total ceiling value of $249 million.
September 25, 2018 | International, Land
SAIC boss tackles Engility acquisition, space market and revenue goals
WASHINGTON — News that SAIC would buy Engility was just the latest in a recent string of acquisitions among the professional services firms. But if you ask the CEO of SAIC, Tony Moraco, unlike some of the company's peers this was not transformational. This was instead a merging of two complementary businesses. In his words, “a momentum builder, as we are stronger together in the marketplace.”
It's also the next phase for a company that technically formed five years ago, with the split of the $11 billion legacy company with the same name.
Defense News sat down with Moraco to see how the acquisition fits into SAIC's future strategy, and how far the company has come since gaining independence.
About a year after SAIC split from Leidos, I asked you about your vision for the company. And you said to return to an $11 billion company. How does this acquisition fit into your vision for SAIC these days?
The Engility acquisition is very much consistent with our current strategy. It is not a deviation or a reset, as perhaps some of the other major transactions have been for some of our peers. But it really is about the theme of being stronger together, with [particular] compatibility of the intelligence community ... and also attributes in space market segments that we think we can both serve better. For us, this is opening market access to channels that we didn't have.
It's momentum building, a vision and a strategy that was five years in the making, and it's a continuation of that strategy going forward.
So have you been looking for an extended period of time? And why Engility specifically?
We consistently look at the market. We were not going to be a high-volume buyer, but more selective. The Scitor [acquisition] was more than three years ago. But we felt that we had a good position in the marketplace to grow organically. And we proved very strong performance over five years and since [that last acquisition of] Scitor. And then we've looked at many deals, large and small, to see what makes the most sense to us, staying true to our strategy.
The attraction with Engility was probably first sparked by the multi-intelligence agency portfolio that they have. Instead of buying a number of smaller concentrated firms, we could get a couple agencies in one larger deal. The company is large enough, they have a mature system. Again, in contrast to perhaps some of the small businesses, we think it has been through its own cultural shift to align very much to ours.
Also of interest is the space market. Today, with denied access and with the threats that we have, space is becoming a much more serious domain. The U.S. wants to invest more in it for a range of reasons. And when we think about space, it does cross, in fact, with the intelligence community, the defense sector with Air Force and the other services, and then also the civilian agencies with NASA, [and the National Oceanic and Atmospheric Administration].
As that market evolves, I think the U.S. government will be a principal customer. I believe that the commercial space entities will find a way where they'll also require key outsourced space services just as the government had.
So for a single transaction at scale where we could in fact use our equity, [and face] probably fewer buyers, filling three or four of our strategic initiatives in market access and in capabilities — we felt it was worth a serious look. But it's not just about space and intel. Defense will still be the largest part of our portfolio — 55 percent after we close [from 61 percent]. With the benefit of having the broader diversification in intel and federal civilian agencies, that serves all of our customers from a technology transfer perspective.
We've seen an interesting transition in the market, where the big primes are shedding portions of their services segments. Have we officially returned to the days when manufacturers focus on platforms only and leave the rest to the professional services companies?
I think we [for a period of time] faced a market that was uncertain. Our customers were reprioritizing their mission areas, and the industry was doing the same — looking at where they were going to focus their precious dollars, identify businesses they were going to protect, and areas that maybe weren't core. Then as the market started to improve and move away from cost reductions to protect margins to having some cash and some flexibility, you started seeing more portfolio shaping from the larger players.
It's not just about scale. There's [a focus on] the diversification because as you know, the whole business is based on past performance and on what qualifications you have in people and in contract vehicles; if you have a broader base concentrated in a few key areas, your ability to compete and win in those domains is improved.
There are a lot of technologies that are more heavily influencing the battlefield — whether ISR, electronic warfare, even still cyber, which is evolving. It seems those areas don't fit quite as neatly in one model or the other.
We've been around. It's not a body shop service that we run. It is services and solutions. But technology integration is a direct link to the customer's demand for modernization, the interest in innovative solutions from nontraditional players, the ability to field capabilities faster in a much shorter development cycle, and that leads you to a technology integration model that we have.
It allows us to take mission understanding and translate requirements into capability needs. So we can integrate, we can innovate with the technology and we can implement the solutions, which is fundamentally what the customer needs to migrate them from a current state to a future state.
But we're seeing more and more opportunities through the [Defense Innovation Unit], the [other transaction authorities], and other contract vehicles that provide a little more rapid prototyping flexibility.
SAIC bid for the Marine Corps Amphibious Combat Vehicle and is now working to compete for the Army's Mobile Protected Firepower program.How does that all fit into the broader strategy?
We do see it as a viable area, and I would characterize it as the next tier of complex technology integration, system integration. It's an extension of our command-and-control and ISR integration. I recall we pushed through 30,000 MRAP systematic build packages. That kind of integration of subsystems into a platform is what we felt was a baseline business that we could look to expand; and as the customer looked at, in this case, starting with Assault Amphibious Vehicle. Not a start-from-scratch build — the survivability upgrade really was around the armor, the underbelly and then your armaments protecting the vehicle. And then the related mobility requirements to change out transmissions and engines to support that extra weight. We felt that those subsystems and our mission knowledge afforded us the ability to extend to a little more of the physical platform itself.
We're doing work on the next-gen combat vehicle. And we're using a services model for MPF. Again, nondevelopmental, major integration of existing platforms for rapid field development. That fits well into our technology and integration model.
We see the ground vehicles and perhaps maritime [areas] as one that was probably more approachable versus, say, airframes. Modernization of aircraft has its own barriers of entry of getting flight readiness and the like.
We've extended our test-equipment knowledge to partnering with Lockheed on the propulsion system for torpedoes, for example. So we're just looking for selective areas to do more complex system integration under this broad technology integration umbrella. It just happens to be bigger subsystems. Complex system integration sets us apart from some of the current peers in the marketplace right now. But we're selective in what we go after.
How hard of a hit was the loss of the Marine Corps Amphibious Combat Vehicle in moving forward with that?
It's disappointing. We try to be practical and objective about our market position. It's an alternative model. It's still early in the life cycle. But I think that as we see different opportunities, we learn from it as the customers get more comfortable. So yes, disappointing on ACV, but at the same time we learned a lot from it and I think the customer ultimately got a very good result by having a competitive phase.
And we think that the Army [with MPF] will be as successful and come up with [the] best solution if they can maintain a competitiveness early in the process.
When the split first happened, you and Leidos were generally two different companies. With this acquisition, and with the Leidos acquisition from Lockheed, have you all started to mirror each other more?
I think we may be looking a little more alike. Five years ago I did not expect it. I think we had very clear strategies that [we] were intending to diverge, and therefore we did not have any formal noncompetes. We were looking at the services business model, and Leidos was looking to do more system development. I think their execution of that didn't play out as fast as they'd like. Roger [Krone, Leidos CEO], buying back in the services, more of the information system side, was a bit of a surprise. So if anything, they came back towards us versus us changing direction.
So I'd say they probably navigated slightly different than expected. But even today we're still two different companies. We're still very focused on letting our investors and customers know what we do, and Leidos still has a pretty diverse portfolio from health systems and some engineering services. We compete in similar subsegments but not in all. We're also organized very differently, we go to market differently.
When the deal closes, where does that put your total revenue at?
Right around $6.5 billion.
You told me you wanted to get back to $11 billion. Should we expect more?
No, not right away. That was very tongue in cheek at the time.
You knew I'd remember though.
Oh, I know. I remember it too, actually, because we laughed. There are lots of things we can do, but I felt very comfortable then and still do that we've got a great future and can grow the business organically as well as through acquisition. But it's not to chase the size. It really is about the market leadership. Running good margins and providing good mission capabilities for our employees. I think our market is still very motivated by mission. Our employees are very motivated to serve in different capacities whether it's in uniform or not.
On the same subject
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November 4, 2019 | International, Aerospace, Naval, Land, C4ISR, Security
Contract Awards by US Department of Defense - November 01, 2019
NAVY Rightstar Inc., Vienna, Virginia, is being awarded a multiple-award, firm-fixed-price Department of Defense (DoD) Enterprise Software Initiative (ESI) blanket purchase agreement (BPA) in accordance with the firms' General Services Administration (GSA) Federal Supply Schedule contracts. The potential estimated value of this category of BPA is $820,450,000. This agreement is being awarded as part of a multi-reseller/multi-software publisher software category management award for commercial off-the-shelf information technology asset management software; software maintenance support; information technology professional services; and related services in support of DoD ESI and under the direction of Office of Management and Budget, Enterprise Software Category. The software publisher under this agreement is Nlyte. The BPA provides for the purchase of Nlyte products and services by the DoD, U.S. intelligence community, and the Coast Guard worldwide. The ordering period will be for a maximum of 10 years from Nov. 1, 2019, through July 11, 2029. This BPA is issued under DoD ESI in accordance with the policy and guidelines in the Defense Federal Acquisition Regulation Supplement, Section 208.74. This BPA will not obligate funds at the time of award. Funds will be obligated as task orders using operations and maintenance (DoD) funds. Requirements will be competed among the awardees in accordance with Federal Acquisition Regulation 8.403-3(c)(2), and the successful contractor will receive firm fixed-price orders. This BPA was competitively procured via the GSA E-Buy web site among 679 vendors. Two offers were received and two were selected for award. Naval Information Warfare Center Pacific, San Diego, California, is the contracting activity (N66001-20-A-0006). Northrop Grumman Systems Corp. - Marine Systems, Sunnyvale, California, is awarded a cost-plus incentive-fee $77,377,019 contract modification (P00002) to a previously awarded contract (N00030-19-C-0015) for technical engineering services, design and development engineering, component and full scale test and evaluation engineering, and tactical underwater launcher hardware production to support the development and production of the Common Missile Compartment (CMC). Work will be performed in Sunnyvale, California (55%); Ridgecrest, California (20%); Cape Canaveral, Florida (10%); Bangor, Washington (5%); Kings Bay, Georgia (5%); Barrow-In-Furness, England (2%); New London, Connecticut (1%); Quonset Point, Rhode Island (1%); and Arlington, Virginia (1%), and is expected to be completed by March 31, 2024. Fiscal 2020 shipbuilding and conversion Navy funding in the amount of $34,868,308 will be obligated on this award. Fiscal 2020 United Kingdom common funding in the amount of $42,508,711 will be obligated on this award. No funds will expire at the end of the current fiscal year. Strategic Systems Programs, Washington, District of Columbia, is the contracting activity. Ultra Electronic Ocean Systems, Braintree, Massachusetts, is awarded a $45,161,439 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee and firm-fixed-price contract for engineering and technical service for the design, development, testing, integration, technology insertion/refreshment and system support of the AN/BPS radar software management system on new construction and in-service submarines. Work will be performed in Chantilly, Virginia (50%); and Wake Forest, North Carolina (50%), and is expected to be completed by October 2020. This contract includes options which, if exercised, would bring the cumulative value of this contract to $100,861,439, and be complete by May 2026. Fiscal 2019 shipbuilding and conversion (Navy-SCN); 2015 shipbuilding and conversion (Navy-SCN); 2019 other procurement (Navy-OPN); and 2014 shipbuilding and conversion (Navy-SCN) funding in the amount of $1,700,000 will be obligated at time of award and will not expire at the end of current fiscal year — funding: fiscal 2019 SCN (58%); fiscal 2015 SCN (18%); fiscal 2019 OPN (18%); and fiscal 2014 SCN (6%). In accordance with 10 U.S. Code 2304(c)(5), authorized or required by statute 15 U.S. Code 638(r)(4) states: "To the greatest extent practical, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology." The Naval Sea Systems Command, Washington Navy Yard, District of Columbia, is the contracting activity (N00024-20-D-6202). Lockheed Martin, Rotary and Mission Systems, Baltimore, Maryland, is awarded a $12,019,951 cost-plus-fixed-fee modification to a previously-awarded contract N00024-11-C-2300 to exercise an option for the accomplishment of post-delivery support for USS Minneapolis-Saint Paul (LCS 21) of the Littoral Combat Ship (LCS) program. This option exercise is for post-delivery support for the LCS program. Lockheed Martin, Rotary and Mission Systems, will provide expert design, planning and material support for LCS 21's post-delivery period. Lockheed Martin will perform the planning and implementation of deferred design changes that have been identified during the construction period. The corrections and upgrades are necessary to support USS Minneapolis-St. Paul sail-away and follow-on post-delivery test and trials period. Work will be performed in Marinette, Wisconsin (57%); Hampton, Virginia (14%); Moorestown, New Jersey (11%); San Diego, California (11%); and Washington, District of Columbia (7%), and is expected to be completed by October 2021. Fiscal 2015 shipbuilding and conversion (Navy) funding for $7,000,000 will be obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. General Electric Co., Cincinnati, Ohio, is awarded an $8,747,720 firm-fixed-price delivery order (N00024-20-F-4117) under a previously-awarded basic ordering agreement N00024-18-G-4113 for integrated electronic controller kits for LM2500 marine gas turbine engines. The materials procured under this basic ordering agreement are LM2500 MGTEs and related material. MGTEs are installed in FFG 7, CG 47, DDG 51, LCS Independence variant, LHD 8 and LHA 6AF-class vessels. Work will be performed in Cincinnati, Ohio, and is expected to be completed by December 2020. Fiscal 2020 other procurement (Navy) funding in the amount of $8,747,720 will be obligated at time of award and will not expire at the end of the current fiscal year. This order was not competitively procured, in accordance with 10 U.S. Code 2304(c)(1) (only one responsible source and no other supplies or services will satisfy agency requirements). The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. DEFENSE INTELLIGENCE AGENCY Dynetics Inc., Hunstville, Alabama (HHM402-19-D-0023), was awarded a five-year base with possible five-year option indefinite-delivery/indefinite-quantity contract with a ceiling value of $737,992,267. This contract will provide support services for the Missile and Space Intelligence Center. Work will be performed at Redstone Arsenal and Huntsville, Alabama, with an expected completion date of Oct. 31, 2029. The contract was awarded through a full and open solicitation and one offer was received. The Virginia Contracting Activity, Washington, District of Columbia, is the contracting activity. Booz Allen Hamilton, Alexandria, Virginia (HHM402-20-D-0002); Deloitte Consulting LLP, Arlington, Virginia (HHM402-20-D-0003); Logistics Management Institute, Tysons, Virginia (HHM402-20-D-0004); and Solutions Through Innovative Technologies, Fairborn, Ohio (HHM402-20-D-0005); were awarded a one-year base plus four one-year options indefinite-delivery/indefinite-quantity (ID/IQ), multiple-award contract for strategic workforce analysis planning and management (SWAPM) with a maximum obligation amount of $88,714,746. This contract will provide support services to strategic workforce planning and analysis initiatives to support career field managers and organizational talent and position management requirements. Work will be performed in the National Capital Region with an estimated completion date of Oct. 17, 2024. No funds were obligated at time of award. The SWAPM contract was awarded through a full and open solicitation and five offers were received. Each company will receive a $2,500 minimum guarantee. Task Orders (TO) will be issued competitively under this ID/IQ, which will allow for the following TO contract types: firm-fixed-price, labor hour and time-and-material. The Virginia Contracting Activity, Washington, District of Columbia, is the contracting activity. (Awarded Oct. 18, 2019) MISSILE DEFENSE AGENCY Raytheon Missile Systems, Tucson, Arizona, is being awarded a sole source, cost only contract modification (P00069) under previously awarded contract HQ0276-15-C-0003 to increase the CLIN 0014 undefinitized contract action not-to-exceed value by $267,178,800 from $387,187,200 to $654,366,000. Under this modification, the "pacing items only" restriction is removed and the contractor is now authorized to work the full, unchanged, effort to manufacture, assemble, test and deliver 20 Standard Missile-3 Block IIA missiles and related efforts, and four missiles under Foreign Military Sales (FMS) case JA-P-ATB to Japan. The value of the contract is increased by $267,178,800 from $1,198,400,240 to $1,465,579,040. The work will be performed in Tucson, Arizona; and Huntsville, Alabama, with an estimated completion date of December 2022. Fiscal 2018 procurement, defense-wide funds in the amount of $209,000,000; and FMS funds in the amount of $7,652,000 will be obligated at the time of award. The Missile Defense Agency, Dahlgren, Virginia, is the contracting activity (HQ0276-15-C-0003). ARMY Ravenswood Solutions, Fremont, California, was awarded a $62,896,230 hybrid (cost-no-fee and firm-fixed-price) contract for a fully instrumented, highly realistic, and immersive training environment. Bids were solicited via the internet with three received. Work locations and funding will be determined with each order, with an estimated completion date of Oct. 31, 2024. U.S. Army Contracting Command, Orlando, Florida, is the contracting activity (W900KK-20-D-0002). General Dynamics Land Systems, Sterling Heights, Michigan, was awarded a $9,043,846 modification (P00091) to contract W56HZV-17-C-0067 for Abrams systems technical support. Work will be performed in Sterling Heights, Michigan, with an estimated completion date of Sept. 30, 2021. Fiscal 2019 and 2020 procurement of weapons and tracked combat vehicles; and operations and maintenance, Army funds in the amount of $9,043,846 were obligated at the time of the award. U.S. Army Contracting Command, Warren, Michigan, is the contracting activity. Montana State University, Bozeman, Montana, was awarded an $8,600,000 modification (P00001) to contract W911W6-18-C-0050 for or primary aircraft structure, to understand and overcome challenges to production of primary aircraft structure using stretch-broken carbon fiber. Work will be performed in Bozeman, Montana, with an estimated completion date of Sept. 30, 2021. Fiscal 2018 and 2019 research, development, test and evaluation, Army funds in the amount of $8,600,000 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. Shearwater Mission Support LLC,* Anchorage, Alaska, was awarded a $7,238,172 modification (P00008) to contract W911S8-18-D-0018 for installation support services. Bids were solicited via the internet with six received. Work locations and funding will be determined with each order, with an estimated completion date of Oct. 30, 2020. U.S. Army Mission Installation Contracting Command, Yuma Proving Ground, Arizona, is the contracting activity. DEFENSE LOGISTICS AGENCY U.S. Foods Inc., Salem, Missouri, has been awarded a maximum $43,988,785 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution for customers in the Missouri and Illinois area. This was a sole source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a 364-day bridge contract with no option periods. Location of performance is Missouri, with an Oct. 31, 2020, performance completion date. Using customers are Army, Air Force, Army National Guard, Air National Guard and other federal agencies. Type of appropriation is fiscal 2020 defense working capital funds. The contracting agency is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3243). Oshkosh Defense LLC, Oshkosh, Wisconsin, has been awarded an estimated $25,340,721 fixed-price, indefinite-delivery/indefinite-quantity contract for tire and wheel assemblies. This was a competitive acquisition with one response received. This is a three-year base contract with two one-year option periods. Locations of performance are Wisconsin and New Jersey, with an Oct. 31, 2022, performance completion date. Using customers are Army and foreign military sales. Type of appropriation is fiscal 2019 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Land and Maritime, Columbus, Ohio (SPE7LX-20-D-0022). AIR FORCE Raytheon Missile Systems, Tucson, Arizona, has been awarded a $16,553,897 cost-plus-fixed-fee contract for universal armament interface. This contract provides for system engineering and program management for universal armament interface development. Work will be performed in Tucson, Arizona, and is expected to be completed by Nov. 19, 2024. This award is the result of a sole source acquisition. Fiscal 2020 research, development, test and evaluation funds in the amount of $923,829 are being obligated at the time of award. The Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8628-20-C-2267). Pacific Scientific Energetic Materials Co., Hollister, California, has been awarded a $13,394,557 firm-fix-price with economic-price-adjustment for sustainment of B-1B Aircraft. This contract provides 48 shield mild detonating cord (SMDC) kits for B-1B aircraft; with each kit contains 461 SMDC lines. Work will be performed at Hollister, California, and is expected to be completed by June 30, 2023. This award is the result of a sole source acquisition. Fiscal 2018, 2019 and 2020 aircraft procurement funds in the amount of $13,394,557 will be obligated at the time of the award. The Air Force Life Cycle Management Center, Ammunition Contracting Division, Hill Air Force Base, Utah, is the contracting activity. *Small Business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2006604/source/GovDelivery/
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September 17, 2021 | International, Land
US Air Force picks same bomb-detecting robot used by the British Army
The goal is to field the core system as rapidly as possible, as the global supply chain for critical subsystems like cables and connectors remains backlogged across sectors since the start of the pandemic.