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Thursday, 04/08/2021 8:14:56 PM

Thursday, April 08, 2021 8:14:56 PM

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Science Applications (SAIC) Secures $3.6B U.S. Army Contract

Science Applications SAIC recently received a contract from the U.S. Army to continue supporting the U.S. Army Combat Capabilities Development Command, Aviation & Missile Center (DEVCOM AvMC), Software, Simulation, Systems Engineering and Integration (S3I) Directorate. The Directorate will leverage Science Applications’ engineering services to support its hardware-in-the-loop and modeling & simulation development.

The contract can continue for eight years, allowing Science Applications to support the development of embedded systems, including systems, subsystems, components and software versions, and hardware configurations.

Science Applications International Corporation Price and Consensus

Notably, this contract adds to the previous three major awards to support the S3I Directorate secured by Science Applications, exceeding $8.1 billion in total. Markedly, the past year saw the company secure a $2.9-billion contract for software development and maintenance services, an $830-million contract for aviation systems engineering services and an $800-million contract for modeling & simulation systems engineering support services.

Science Applications is benefiting from the continued flow of high-value contracts. A record level of awards reflects its disciplined business-development actions, consistent operational excellence and high customer satisfaction. Notably, as of Jan 31, 2021, the company’s total contract backlog was $21.5 billion.

Furthermore, having the government as a big client lends stability to the business and moderates fluctuation in revenues. Although the government generally has a lengthy approval process, the projects keep earning money for several years after their approvals.

Bright Prospects Amid Competition

Competition from CACI International CACI in the IT services space is steady. CACI continues to win high-value contracts and received contracts worth $789 million during its first-quarter fiscal 2021.

In the IT services industry, Science Applications also competes with IBM IBM and Accenture ACN, which are among the top IT service providers in the world.

Nonetheless, we believe the company is comfortably positioned in this space, given its back-to-back contract wins, which are supporting the business perennially.

Science Applications currently carries a Zacks Rank #5 (Strong Sell).


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