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GD Awarded FBI Task Orders

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General Dynamics Information Technology, a business unit of General Dynamics Corporation (GD), has received an eight-year Federal Bureau of Investigation Information Technology Supplies and Support Services (FBI IT Triple S) contract. Per the contract, the company will provide information technology (“IT”) services and cover three task orders with a combined value of $19 million.

To assist the FBI Digital Evidence Section, the company will provide it with a full range of information assurance and security support according to the first task order. Particularly, the company will be involved in executing systems engineering, administration and security duties, as well as look after the training development and office management. Moreover, to develop and update certification and authorization processes and programs for both new and legacy IT systems, the company will work with FBI intelligence analysts.

Per the second task order, the company will be responsible for FBI’s Enterprise Management System (“EMS”). Also, it will manage workflow and implement and maintain software and image-management tools so that the users can access and share data steadily. According to its third task order, the company will engineer, configure, integrate, and advise on the procurement of virtual server platforms in enterprise-wide FBI environments.

General Dynamics is well aware of the unique needs of FBI. The company has been providing IT services to the FBI since 2008. The company received this multiple, indefinite delivery/indefinite quantity contract as one of the 46 awardees from the FBI in November 2010. The contract had a potential value of $30 billion over eight years if all options are exercised.

General Dynamics plans to deliver cost-effective IT solutions and training to the FBI to gear it for the next generation of enterprise operations and management. Currently, the company carries out engineering, deployment, operations and maintenance services at FBI headquarters in Quantico, Virginia, and in several field offices throughout the United States.

Based in Falls Church, Virginia, General Dynamics is engaged in mission-critical information systems and technologies, land and expeditionary combat vehicles, armaments and munitions, shipbuilding and marine systems, and business aviation. The company’s revenue exposure that is spread over a broad portfolio of products and services helps it in keeping the overall growth momentum steady.

However, we are concerned as the company is largely tied to the U.S. defense budget, where the threat of budget cuts is high. Also, we have turned slightly cautious about the risks related to the execution of key projects. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

General Dynamics has to mainly compete with Lockheed Martin Corporation (LMT) and Textron Inc. (TXT).

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