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Science Applications Wins IT Modernization Contract From FAA

Zacks Equity Research

Science Applications International Corp. SAIC recently received a $378-million, single-award, indefinite-delivery, indefinite-quantity (IDIQ) contract to provide its enterprise IT services to the Federal Aviation Administration (FAA).

The award carries a 10-year performance period. Per the deal, Science Applications will modernize FAA’s 50,000-strong workforce with service-desk support, business and administrative systems infrastructure support, training services, and IT asset management. Science Applications’ automation and predictive analytics-based IT support services will enhance the FAA’s IT user experience.

Science Applications International Corporation Price and Consensus

Science Applications International Corporation Price and Consensus
Science Applications International Corporation Price and Consensus

Science Applications International Corporation price-consensus-chart | Science Applications International Corporation Quote

Contract Wins Boost Growth

Science Applications is benefiting from the continuous 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 Apr 30, 2020, the company’s total contract backlog was $15.3 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 earn money for several years after approval.

Notably, Science Applications reportedly was awarded $2.8 billion in national security contract awards for fiscal 2020. Last month, the company received multiple contracts worth $982 million from the U.S. Naval Sea Systems Command to provide its products and services.

Besides, in March, the company received a three-year contract worth $45.2 million to continue providing technical support for tactical warfare training to various Navy and Marine training formations.

Moreover, in January, the company received a $727-million Common Computing Environment (Cloud One) contract from the U.S. Air Force to aid the transformation of about 800 Air Force and U.S. Army mission applications to the cloud.

Bright Prospects Despite Competition

Competition from CACI International CACI in the IT services space remains steady. CACI continues to win high-value contracts and received contracts worth $1.4 billion in its March quarter.

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 that the company is comfortably positioned in this space, given its back-to-back contract wins, which are driving the business perennially.

Science Applications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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