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Science Applications (SAIC) Secures DoD Contract Worth $126M

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Science Applications (SAIC - Free Report) recently received a five-year, $126-million, single-award task order from the Department of Defense Information Analysis Center to provide research and development (R&D) support to the U.S. Army Combat Capabilities Development Command (DEVCOM) Ground Vehicle Systems Center (GVSC).

The company’s R&D and engineering support will help the U.S. Army with modeling and simulation of ground combat systems, among other things.

Continued Flow of Contracts

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 Apr 30, 2021, the company’s total contract backlog was $24 billion.

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

Last month, Science Applications received a major single-award defense contract with an estimated ceiling value of approximately $200 million, to provide laboratory operations and support to the Defense Intelligence Agency.

Moreover, in April, the company received a contract worth $3.6 billion 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.

Intensifying Competition

Competition from CACI International (CACI - Free Report) in the IT services space is steady. CACI continues to win high-value contracts and received contracts worth $1.6 billion during its third-quarter fiscal 2021.

In the IT services industry, Science Applications also competes with International Business Machines (IBM - Free Report) and Accenture (ACN - Free Report) , 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).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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