Filed under: Business Line, CACI, Companies, CSC, Earnings, Events, IT, logistics, Seeking Alpha
This is an article I wrote for Seeking Alpha discussing trends in CSC and CACI earnings and stock price.
Filed under: Business Line, Companies, Contract Awards, CSC, Events, Hewlett Packard, IT, logistics, Services
In a move that surprised some observers the British Ministry of Defence (MOD) awarded the contract to manage their payroll and personnel services to CSC (CSC). The current contract is being executed by Hewlett Packard (HP).
The seven year contract which will begin in late 2012 has an estimated value of almost $1.5 billion. HP has been executing this work since 1997.
CSC was one of two other bidders then HP who had attempted to win the contract alongside Capita.
The decision was somewhat a surprise due to CSC’s recent failure on a contract with the British National Health Service (NHS) for a patient administration IT system. The fallout from this contract is currently under negotiation between CSC and the NHS to reach a settlement. It was recently reported that these negotiations are ongoing and some sort of agreement will be reached by 1 June. CSC has said that they have had to write off their nearly $1.5 billion investment into the system.
The agreement will manage the reduction in CSC’s support and the use of the system.
Despite this past performance the British MOD has clearly stated that CSC submitted the best proposal and believe the contract was evaluated fairly and properly.
As the U.S. military has had the British military also experienced problems in the past paying personnel the right amounts due to the large movement to and number of troops in Afghanistan and Iraq.
Filed under: Business Line, Canada, Companies, Contract Awards, Countries, CSC, Department of Defense, development program, England, Events, medicine, Services, U.S. Army
Since the end of World War II where several different chemical and biological weapons were developed by the Axis and Allies most major nations have invested in defenses against these Weapons of Mass Destruction (WMD). In the Gulf War of the early Nineties the U.S. and its allies faced potential anthrax and other biological agents attacks. One aspect of these defenses has been work on developing drugs to immunize soldiers or treat the diseases.
U.S. defense contractor CSC’s (CSC) business unit, DynPort Vaccine, was awarded a contract by the British government to assist in planning and gaining a European Union (EU) license for a plague vaccine the company has been developing and testing in the U.S.
The vaccine was originally developed at the U.S. Army’s labs at Fort Detrick, MD. DynPort has further developed it and is working with the Food and Drug Administration (FDA) on clinical trials to license it in the U.S. The goal for this vaccine is to provide protection against the plague for U.S., British and Canadian troops. E.U. licensing would also allow it to be used by other nations expanding the market for CSC.
Filed under: Business Line, Companies, Congress, CSC, Department of Defense, development program, Earnings, Events, Federal Budget Process, Lockheed Martin, logistics, Northrop Grumman Corp., production program, Restructuring, S&T, Satellites, Services, SETA, space, U.S. Air Force
It was reported late last week that CSC (CSC) has agreed to sell its Mission Solutions Engineering unit to avoid potential Organizational Conflict-of-Interest (OCI) issues. CSC follows Northrop Grumman (NOC) and Lockheed Martin (LMT) in this kind of move brought on by stricter OCI rules proposed for defense contracting. CSC will sell the 500 person unit to ASRC Federal Holding Co. which is an Alaskan Native Corporation.
Terms of the deal have yet to be announced. Previously CSC had set up the group as a stand alone affiliate in order to try and firewall off potential conflicts. The Scientific, Engineering, Technical and Analytical (SETA) branch of defense contracting has been focused on as the government worries that contractors will bid on hardware contracts while other parts of the same company are supporting the program offices conducting the purchase. In the past companies relied on firewalls, subsidiaries and Non-Disclosure Agreements to manage that conflict. The new rules make it harder and many of the big contractors have been jettisoning there SETA groups.
Northrop was the first with the sale of their TASC arm worth about $1.6 billion after the U.S. Air Force expressed concerns about two upcoming satellite programs that TASC worked on at the Air Force Space Command. Northrop felt the new satellites would be more valuable to the company then TASC.
Lockheed Martin (LMT) announced in June that they would be selling their Enterprise Integration Group (EIG) due to some of the same concerns.
CSC is following these two large contractors but are not happy with the situation feeling that there are better ways for the DoD to manage the risks in the situation.
The continued separation into different parts of these types of companies may see a return to the Eighties and early Nineties where smaller contractors provide the primary SETA work while the large companies focus on big hardware and IT programs. In the Nineties companies bought or acquired SETA contractors as a way to broaden their work base as these companies grew with the downsizing of the defense civil servant and military workforce.
SETA work is also being reduced by Secretary Gates’ initiative to reduce the number of contractors working in the acquisition field. Several thousand positions have been eliminated and “insourced” into government jobs. This directly reduces the revenue of these companies as they earn only if people are working at these jobs. These concerns of reduced future earnings may also cause companies to re-think their commitment to this type of contracting.
For whatever reason there will probably be more deals similar to these as the OCI rules become more firm and the effect of insourcing or the latest proposal to reduce contractors thirty percent over the next three years start to show some affects. This may be a business area that sees serious decline for the next few years although the swing back-and-forth between contractors and government workers seems to occur cyclically. That means in five or ten years there may be a new demand for contractors of this type.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, CSC, Events, IT, logistics, Services, U.S. Army
The U.S. Army has been designing and executing the Logistics Modernization Program (LMP) for several years. LMP is a computer and web based system utilizing SAP to provide integrated logistics management of “supply, demand, asset availability, distribution, and maintain data, financial control and reporting.” It replaces two older systems and is slowly being rolled out across the various Army acquisition and sustainment organizations.
CSC (CSC) is one of the prime contractors involved in developing and supporting the program. The Army announced yesterday that they received execution of further contract modifications worth over $260 million to continue to provide this support. The current operations in Iraq and Afghanistan have placed great stress on the U.S. Army’s logistics train. LMP’s main goal is to expedite the ordering, tracking and receipt of key equipment to increase operational readiness and capabilities.
Filed under: Business Line, Companies, Contract Awards, CSC, Events, IT, logistics, Press Releases
CSC Wins SAP System Support Agreement From U.S. Department of the Interior
FALLS CHURCH, Va., Dec. 2 /PRNewswire/ — CSC (NYSE:CSC) announced today that the U.S. Department of the Interior’s National Business Center (NBC) awarded the company a blanket purchase agreement (BPA) to provide SAP system support. CSC is one of two companies that won the competitively awarded BPA, which has a five-year period of performance. This contract was awarded to CSC during the company’s fiscal 2010 second quarter.
Services delivered under the BPA will support NBC’s Financial Management line of business, which was established to provide financial management systems and accounting services in support of federal agencies. These services include SAP implementation, integration, operations and maintenance to help federal finance officers strengthen management systems, accountability and transparency.
“We are pleased to enter into this partnership with CSC, which brings world-class SAP experience to our team,” said Jim Beall, the National Business Center’s chief financial officer and associate director of its Financial Management and Budget Directorate. “By providing SAP as an additional choice to agencies, we can help our customers meet their federal financial management needs more effectively and efficiently.”
“CSC is proud to offer best-value solutions to improve the cost, quality and performance of financial management for small and mid-sized government agencies,” said Tom Anderson, president of CSC’s North American Public Sector Civil and Health Services Group. “Our proven SAP Federal Financial Management solution is scalable, making it affordable for a range of agencies.”
The NBC is a federal shared services provider offering business management systems and services to government agencies, including finance, human resources, payroll, training, IT and administrative support.
For more information about CSC’s Federal Financial Management solutions, visit www.csc.com/ffm.
CSC is a global leader in providing technology-enabled solutions and services through three primary lines of business. These include Business Solutions and Services, the Managed Services Sector and the North American Public Sector. CSC’s advanced capabilities include systems design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting. Headquartered in Falls Church, Va., CSC has approximately 92,000 employees and reported revenue of $16.0 billion for the 12 months ended October 2, 2009. For more information, visit the company’s Web site at www.csc.com.
CONTACT: Michelle Herd, Senior Manager, Communications, North American
Public Sector, +1-703-205-6186, [email protected], or Chris Grandis, Media
Relations Director, Corporate, +1-703-641-2316, [email protected], or Bryan
Brady, Vice President, Investor Relations, Corporate, +1-703-641-3000,
[email protected], all of CSC
Web Site: http://www.csc.com/
CSC stated that since the start of Fiscal Year 2008 it had won 72 contracts from the US Government for IT services. 40 of these are from DoD. See this article for more.
Computer Sciences Corporation (CSC) signed a contract with the DISA to manage their various networks. CSC will be the lead on a team of various companies including BAE and CACI. More details can be found here. CSC continues to cement its role as a major systems integrator for the Department of Defense and the three services.