Coast Guard Deal for CSC

Zacks

Computer Sciences Corporation (CSC) has won a new contract yet again. This is basically a contract from the U.S. Coast Guard that was awarded to 11 companies, for a total value of $11 billion.

As per the agreement, the company will provide support services to the U.S. Department of Homeland Security (DHS). A closer look at the contract reveals that CSC has to manage issues related to the support and design, development, utilization and other related actions with respect to assets, processes and systems being acquired by DHS agencies.

The work agreement includes ship system design and engineering, enterprise architecture and information systems management. This apart, modeling and simulation, enterprise resource management, quality assurance and R&D are other important aspects of the contract.

Computer Sciences has been on a deal winning spree.  A couple of months back, the U.S. General Services Administration (:GSA) awarded CSC with blanket purchase agreements (BPAs) to help provide email as a Service (EaaS). CSC is one of the 17 companies to have won the $2.5 billion contract.

Additionally, CSC won two GSA contracts, of which, one will be based on the Microsoft (MSFT) Exchange platform and the other on the Google (GOOG) platform. The contracts have a two-year base period with renewal options over the next three years. The BPAs have been awarded as GSA Schedule 70 contracts.

Moreover, the company has decided to focus on its core competencies. A couple of months back, the company signed a definitive agreement to sell its credit service business to Equifax Inc. (EFX) for $1.0 billion. Around $300 million to $400 million of the proceeds will be used by the company for share buyback, around $300 million to $400 million for its pension plans and the rest for general corporate purposes.

Although the company is making headway in every possible segment of its business, intense competition in the IT and cloud computing space from both small and big players and a challenging macroeconomic condition in Europe may pose some challenges for the company.

Currently, Computer Sciences has a Zacks Rank #2 (Buy).

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