Saic

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SAIC: AT A GLANCE
I. Recommendations

II. Company Backgroundu
Science Applications International Corporation (SAIC), headquartered in McLean, Virginia is a publicly traded Fortune 500 company that provides information technology services to promote security and overall safety worldwide. SAIC delivers scientific and technological products and services in the computer integrated-systems design sector. Total SAIC personnel consists of 41,100 employees worldwide (Hoover’s, 2012). SAIC secures over 90% of its revenues from the U.S. government, primarily serving the Department of Defense, the Department of Homeland Security, the U.S. Army, and the U.S. Navy. (Hoover’s 2012). Exhibit 1: 2012 Sales Revenue Generated by SAIC's Defense Business Sector: 40% of Total Sales

SAIC Operates in 5 Major Applications:
* Cyber Security
* Energy and Environment
* Health
* Intelligence, Surveillance, and Reconnaissance
* Logistics, Readiness, and Sustainment
SAIC Operates in 5 Major Applications:
* Cyber Security
* Energy and Environment
* Health
* Intelligence, Surveillance, and Reconnaissance
* Logistics, Readiness, and Sustainment

Sources: Mergent Online; SAIC’s 2012 Annual Report.

The SAIC Leadership Team Consists of Five Key Executives:
* Chairman of the Board, A. Thomas Young (Chairman since 1995); * President & CEO, John Jumper (USAF-Ret);
* Executive Vice President & CFO, Mark Sopp;
* Executive Vice President and General Counsel, Douglas Scott; * Executive Vice President for Government Affairs, Communications, and Support Operations, Arnold Punaro Industry Overview The US Security and Exchange Commission classifies SAIC as a computer-integrated system design company (SIC 7373). Additional classifications include: * Engineering Services (SIC 8711)

* Commercial Physical Research (SIC 8731)
* Computer Programming Services (SIC7371)
* Holding Companies (SIC 6719).
The IT industry requires technical expertise and constant innovation, and is largely dependent on annual government budgeting and spending. The industry anticipates continued growth throughout the year and into 2013 with very limited budget cuts. SAIC competes with three major companies: CACI International, SRA International, and ManTech. CACI International is the main benchmark competitor. Despite CACI’s strong performance over the last year and an abundance of secure contracts, we estimate that SAIC will have very little problem maintaining its dominance in FY 2013. Major Developments and Important Events On March 14, 2012, SAIC agreed to a $540M settlement with U.S. Attorney for the Southern District of New York and the City of New York concerning at automated workforce management system. As a result, SAIC has reviewed process and control improvements. The effects of this litigation on financial performance will be detailed throughout the remainder of this report. In August of this year, SAIC announced it will divide into two separate businesses by the end of 2013. The first is to be a $4B company that will focus on providing government technical services and IT businesses; the other will deliver science and technology solutions, which the company says will generate $7B a year in revenue. This division will prevent the conflict of interest of having a government contractor responsible for building systems as well as testing them. (Converge, 2012) In 2012 alone, SAIC acquired two new businesses: Vitalize Consulting Solutions, which provides clinical businesses and IT service for healthcare, and Patrick Energy Services, which provides performance based transmission and distribution of power systems solutions. SAIC also received 40 new contract awards in the past fiscal year totaling over $100M....
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