The Defense Logistics Agency (DLA) last Friday awarded Science Applications International Corp. [SAIC] a potential $950 million contract to provide various construction materials that will be used by the Armed Forces, a contract that represents new business for the company.
The award announcement said that SAIC was one of three bidders for the work, which previously had been performed by DLA.
The contract has a three-year base period and two, two-year options.
Last Thursday, SAIC reported its second quarter financial results, saying it has $13.5 billion in proposals outstanding, with 75 percent of the potential work new business.
Charlie Mathis, SAIC’s chief financial officer, said on the company’s earnings call that its logistics and supply chain business is relatively lower margin compared to the rest of the company’s portfolio but that it “generates a ton of cash” and is “a very stable business, very well run.” Despite the lower margins, “the economics of the supply chain business is quite well,” he said.