Leidos

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Leidos Holdings, Inc.
Public
Traded as NYSE: LDOS
Industry national security, health and engineering
Predecessor
Founded La Jolla, California (1969 (1969))
McLean, Virginia
Founder J. Robert "Bob" Beyster
Headquarters Reston, Virginia, U.S.
Key people
 Roger Krone (CEO)
Revenue Decrease US$ 5.06 billion (2014) [1]
Decrease US$ 214 million (2014) [1]
Decrease US$ 323 million (2014) [1]
Total assets Increase US$ 443 million (2014) [1]
Total equity Decrease US$ 951 million (2014) [1]
Number of employees
 19,000 [2]
Website leidos.com
Footnotes / references
[3][4][5][6]
File:Accenture building Reston.jpg
Headquarters at Reston Town Center.

Leidos, a joint spin-off of Science Applications International Corporation (SAIC),[7] is an American defense company headquartered in Reston, Virginia, that provides scientific, engineering, systems integration, and technical services. Leidos works extensively with the United States Department of Defense (4th largest DoD contractor FY2012), the United States Department of Homeland Security, and the United States Intelligence Community, including the National Security Agency, as well as other U.S. government civil agencies and selected commercial markets. On September 27, 2013, SAIC changed its name to Leidos and spun off a $4 billion government services and information technology company, which retains the name Science Applications International Corporation.[3][4] Before the split, Leidos employed 39,600 employees and reported $11.17 billion in revenue and $525 million net income for its fiscal year ended January 31, 2013,[7] making it number 240[8] on the Fortune 500 list. In 2014, Leidos reported US$5.06 billion in revenue.[4] As of March 2015, the company currently has 19,000 employees.[5][9]

History

File:SAIC Logo.svg
Company Logo, 2010

The company was founded by J. Robert "Bob" Beyster in 1969 in the La Jolla neighborhood of San Diego, California, as Science Applications Incorporated (SAI).[10][11]

SAIC conducted an initial public offering of common stock on October 17, 2006.[12] The offering of 86,250,000 shares of common stock was priced at $15.00 per share. The underwriters, Bear Stearns and Morgan Stanley, exercised overallotment options, resulting in 11.25 million shares. The IPO raised US$1.245B.[12]

In September 2009 SAIC relocated its corporate headquarters to their existing facilities in Tysons Corner in unincorporated Fairfax County, Virginia, near McLean.[13]

In 2012 SAIC was ordered to pay $550 million to the City of New York for overbilling the city over a period of seven years on the CityTime contract.[14] In 2014 Gerard Denault, SAIC's CityTime program manager, and his government contact were sentenced to 20 years in prison for fraud and bribery related to that contract.[15]

In August 2012, SAIC announced its plans to split into two publicly traded companies.[16][17] The company spun off about a third of its business, forming an approximately $4 billion-per-year service company focused on government services, including systems engineering, technical assistance, financial analysis, and program office support. The remaining part became a $7 billion-per-year IT company specializing in technology for the national security, health, and engineering sectors. The smaller company was led by Tony Moraco, who beforehand was leading SAIC’s Intelligence, Surveillance and Reconnaissance group, and the bigger one was led by John P. Jumper.[18] The split has allowed both companies to pursue more business, which it could not pursue as a single company due to conflicts of interest.[19] In February 2013, it was announced that the smaller spin-off company would get the name "Science Applications International Corporation" and would stay in the current headquarters, while the larger company would change its name to Leidos,[20] (created by clipping the word kaleidoscope) and would move its headquarters to Reston.[21]

Management

After Beyster's 30+ years of leadership Kenneth C. Dahlberg was named the CEO of SAIC in November 2003. In May 2005, the company changed its external tagline from An Employee-Owned Company to From Science to Solutions.

The third CEO was Walt Havenstein, who pushed for tighter integration of the company's historically autonomous divisions, which led to lower profit and revenue. The strategy was reversed by the (fourth) CEO, retired Air Force general John P. Jumper, appointed in 2012.[22] On July 1, 2014 Leidos announced that Roger Krone will become its CEO on July 14, 2014.[23]

Operations

The Defense Intelligence Agency (DIA) transitioned a Remote Viewing Program to SAIC in 1991 which was renamed Stargate Project.

In March 2001 SAIC defined the concept for the NSA Trailblazer Project. In 2002, NSA contracted SAIC for $280 million to produce a "technology demonstration platform"[clarification needed] for the agency's project, a "Digital Network Intelligence" system to analyze data carried on computer networks. Other project participants included Boeing, Computer Sciences Corporation, and Booz Allen Hamilton.[24] According to science news site PhysOrg.com, Trailblazer was a continuation of the earlier ThinThread program.[25] In 2005, NSA director Michael Hayden told a Senate hearing that the Trailblazer program was several hundred million dollars over budget and years behind schedule.[26]

In fiscal year 2003, SAIC did over $2.6 billion in business with the United States Department of Defense, making it the ninth largest defense contractor in the United States. Other large contracts included a bid for information technology for the 2004 Olympics in Greece[27]

From 2001 to 2005, SAIC was the primary contractor for the FBI's unsuccessful Virtual Case File project.[28]

During fiscal year 2012 (latest figure available), SAIC had more than doubled its business with the DoD to $5,988,489,000, and was the 4th largest defense contractor on the annual list of the top 100.[29]

Subsidiaries

  • Leidos Biomedical Research, Inc., formerly SAIC - Frederick, a wholly owned subsidiary of Leidos manages Frederick National Laboratory for Cancer Research.[30]
  • MEDPROTECT, LLC supports US government health-payer organizations[30]
  • Reveal, develops dual-energy X-ray computed tomography systems for explosives-detection at airports and similar facilities[31]
  • CloudShield Technologies a wholly owned subsidiary, specializing in cyber-security
  • Varec, Inc., liquid petroleum asset management company
  • Leidos Health
  • Leidos Canada, formerly SAIC Canada, wholly owned subsidiary, works with Canadian government.[30]
  • Leidos Australia (Leidos Pty Ltd), wholly owned subsidiary, specializing in document technologies and cyber-security.[30] Produces TeraText software.
  • Leidos Engineering, LLC, formerly SAIC Energy, Environment & Infrastructure LLC, assembles the legacy of engineering capabilities of Benham Investment Holdings, LLC, R. W. Beck Group, Inc.,[32] and Patrick Energy Services.

Former subsidiaries

AMSEC LLC, a business partnership between SAIC and Northrop Grumman subsidiary Newport News Shipbuilding divested on July 13, 2007.[citation needed] Network Solutions was acquired by SAIC in 1995,[33] and subsequently was acquired by VeriSign, Inc. for $21 billion.[34]

Controversies

Revolving door

The company has had as part of its management, and on its Board of Directors, many well known ex-government personnel including Melvin Laird, Secretary of Defense in the Nixon administration; William Perry, Secretary of Defense for Bill Clinton; John M. Deutch, President Clinton's CIA Director; Admiral Bobby Ray Inman who served in various capacities in the NSA and CIA for the Ford, Carter and Reagan administrations; and David Kay who led the search for weapons of mass destruction after the 1991 Gulf War and served under the Bush Administration after the 2003 Iraq invasion.

In 2012, 26 out of 35 SAIC Inc. lobbyists previously held government jobs.[35][36]

Campaign contributions

SAIC is among the 8 top contributors to federal candidates, parties, and outside groups with $1,209,611 during the 2011–2012 election cycle according to information from the Federal Election Commission. The top candidate recipient was Barack Obama.[37]

FBI allegations

In June 2001 the FBI paid SAIC $122 million to create a Virtual Case File (VCF) software system to speed up the sharing of information among agents. But the FBI abandoned VCF when it failed to function adequately. Robert Mueller, FBI Director, testified to a congressional committee, "When SAIC delivered the first product in December 2003 we immediately identified a number of deficiencies – 17 at the outset. That soon cascaded to 50 or more and ultimately to 400 problems with that software ... We were indeed disappointed."[this quote needs a citation]

SAIC executive vice president Arnold L. Punaro claimed that the company had "fully conformed to the contract we have and gave the taxpayers real value for their money." He blamed the FBI for the initial problems, saying the agency had a parade of program managers and demanded too many design changes. He stated that during 15 months that SAIC worked on the program, 19 different government managers were involved and 36 contract modifications were ordered.[38] "There were an average of 1.3 changes every day from the FBI, for a total of 399 changes during the period," Punaro said.[39]

See also

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ 3.0 3.1 Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ 4.0 4.1 4.2 Lua error in package.lua at line 80: module 'strict' not found.
  5. ↑ 5.0 5.1 Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ 7.0 7.1 Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Dr. J. Robert Beyster with Peter Economy, The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company, John Wiley & Sons (2007) p.xiii
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ 12.0 12.1 SAIC - News & Media - "SAIC, Inc. Announces Closing of Initial Public Offering". Investors.saic.com. Retrieved on August 17, 2013.
  13. ↑ "SAIC Moves Corporate Headquarters to McLean, Virginia"
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  19. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  24. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  25. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  26. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  27. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  30. ↑ 30.0 30.1 30.2 30.3 Lua error in package.lua at line 80: module 'strict' not found.
  31. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  32. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  33. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  34. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  35. ↑ The Center for Responsive Politics. http://www.opensecrets.org/orgs/summary.php?id=D000000369a. Accessed 6/9/13.
  36. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  37. ↑ The Center for Responsive politics. http://www.opensecrets.org/orgs/summary.php?id=D000000369a. Accessed 6/9/13.
  38. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  39. ↑ Lua error in package.lua at line 80: module 'strict' not found.

Further reading

  • The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company (ISBN 978-0470097526)

External links

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