Insourcing, Outsourcing: SAIC Wins OSD Support Contract

by: Matthew Potter
February 13, 2012

Category: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, Events, Federal Budget Process, IT, logistics, Restructuring, SAIC, Services, SETA | RSS 2.0

As the debate about eliminating contractor jobs in the Defense Department and insourcing those positions continues the Defense Department and Services continue to award support contracts. SAIC (SAI) the latest contractor to benefit by winning a large award to support the Assistant Secretary of Defense for Nuclear, Chemical and Biological Defense (OASD(NCB)).

The contract has one base year and four options years and could be worth up to $95 million if all options are exercised. SAIC, one of the largest defense contractors in the U.S., will provide professional, technical, analytical and executive services through the contract.

The OASD(NCB)’s office is chartered with “Drive the capability to prevent, protect against, and respond to weapons of mass destruction threats” and provide “A world safe from nuclear, chemical, and biological threats” as part of the Office of Secretary of Defense. Under it are offices for Chemical and Biological Defense, the Defense Threat Reduction Agency, Nuclear Matters and Threat Reduction and Arms Control. The current office was created in 2011.

As with all such offices throughout DoD and the different Services and Agencies they still rely on contractor support in different areas. These include direct office and mission support. The goal of insourcing was to reduce these positions by making sure that any “inherently government work” was being done by a civil servant and not a contractor. There have been disputes among the government, unions and contractors as what jobs should be insourced and how much work is being taken away from private industry. There have also been arguments about who is cheaper, civil servants or contractors, and various politicians weighing in on both sides.

The fact that these types of contracts are still being awarded is a good sign for the industry and SAIC especially. SAIC is one of the larger defense contractors with projected revenues of $10 billion or more in 2012 and it does this primarily by providing services rather then manufacturing large, defense systems. As the Defense Department reduces contracts and positions it might hit SAIC hard although they have shown the ability to win some major contracts.

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