CACI International Inc (CACI - Free Report) recently won a $1.5-billion, single-award Indefinite Delivery Indefinite Quantity (IDIQ) contract to render its enterprise Information Technology, transport and cybersecurity services to the National Geospatial-Intelligence Agency (NGA) and its mission partners. Notably, this is the largest contract CACI has ever received.
The award has a base period of five years and can be extended for another year, five times.
John Mengucci, president and chief executive officer, CACI, said, "This record award demonstrates CACI is delivering on its strategy to win larger, more enduring contracts. It also represents our steadfast commitment to protecting and defending our nation’s networks so the NGA can deliver mission-critical geospatial intelligence to the warfighter around the globe."
Contracts Keep Flowing for CACI
CACI has been winning a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. The company’s reliability with contracts makes it a preferred choice among contractors.
Notably, in the last reported quarter, CACI secured several notable contracts. These included a five-year, $1.1-billion task order to provide advanced and full-lifecycle information technology support to enterprise and mission technologies.
The company’s wins as a prime contractor in most of its deals are a positive. In the last reported quarter, revenues generated as a prime contractor accounted for 91.7% of total revenues.
In May, CACI was chosen as a prime contractor in a $249-million, multiple-award, IDIQ contract by the Naval Sea Systems Command.
Preceding this, in April, the company won a single-award task, $83-million order for one base year and four option-years from the U.S. Navy to provide mission expertise, including planning maintenance and repair of submarines, to the Portsmouth Naval Shipyard in Kittery, Maine.
In March, CACI won a $249-million, six-year, single-award task order to support U.S. Africa Command (AFRICOM) with its advanced mission expertise.
CACI has a large pipeline of new projects and continues to win deals at regular intervals. Notably, as of Mar 31, 2020, its total backlog was $19.9 billion. These back-to-back wins are the key catalysts driving success perennially for the company.
Bright Prospects Despite Competition
Competition from Science Applications (SAIC - Free Report) 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, the company also competes with IBM (IBM - Free Report) and Accenture (ACN - Free Report) , 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 favored relationship with the DoD. Moreover, cyberattacks are creating increased awareness, leading to more demand for cybersecurity solutions.
CACI 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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