Leidos

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Leidos Holdings, Inc.
TypePublic
Traded asNYSELDOS
Industrynational security, health and engineering
Predecessor(s)
  • Science Applications Incorporated (SAI)
  • Science Applications International Corporation (SAIC)
FoundedLa Jolla, California (1969 (1969))
Founder(s)J. Robert "Bob" Beyster
HeadquartersReston, Virginia, U.S.
Key peopleJohn P. Jumper (CEO)
Stu Shea (COO)
RevenueUS$ 7 billion (projected)
Employees23,000
Websiteleidos.com
References: [1][2][3][4]
 
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Leidos Holdings, Inc.
TypePublic
Traded asNYSELDOS
Industrynational security, health and engineering
Predecessor(s)
  • Science Applications Incorporated (SAI)
  • Science Applications International Corporation (SAIC)
FoundedLa Jolla, California (1969 (1969))
Founder(s)J. Robert "Bob" Beyster
HeadquartersReston, Virginia, U.S.
Key peopleJohn P. Jumper (CEO)
Stu Shea (COO)
RevenueUS$ 7 billion (projected)
Employees23,000
Websiteleidos.com
References: [1][2][3][4]
Headquarters at Reston Town Center.

Leidos, previously known as Science Applications International Corporation or SAIC,[5] 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, 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 retained the name Science Applications International Corporation.[1][2] 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,[5] making it number 240[6] on the Fortune 500 list. After the split Leidos is projected to have $6 billion in revenue[2] and 23,000 employees.[3]

History[edit]

Company Logo, 2010

SAIC was founded by J. Robert "Bob" Beyster in 1969 in the La Jolla neighborhood of San Diego, California, as Science Applications Incorporated.[7]

SAIC conducted an initial public offering of common stock on October 17, 2006.[8] 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.[8]

In September 2009 SAIC relocated its corporate headquarters to their existing facilities in Tysons Corner in unincorporated Fairfax County, Virginia, near McLean.[9]

In 2012 the company announced its intention to split into two publicly owned companies in 2013. The two new companies would consist of a services company earning approximately $4 billion a year and an IT company earning approximately $7 billion a year.[10] That year the company was also ordered to pay $500.4 million to the City of New York for overbilling the city over a period of seven years.[11]

Management[edit]

CEO John P. Jumper (left) and COO Stu Shea (right) in Sep. 2013

On November 3, 2003, Kenneth C. Dahlberg was named the CEO of SAIC, ending Beyster's 30+ years of leadership. In May 2005, under the new CEO, the company changed its external tagline from An Employee-Owned Company to From Science to Solutions, retaining the former for internal communications.

The third CEO was Walt Havenstein, who pushed for tighter integration of the company's historically autonomous divisions. The strategy led to lower profit and revenue, and was reversed by the current (fourth) CEO, retired Air Force general John P. Jumper, appointed in 2012.[10]

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 for the U.N. following the 1991 Gulf War and for the Bush Administration following the 2003 Iraq invasion. In 2012, 26 out of 35 SAIC Inc lobbyists have previously held government jobs.,[12] also known as revolving door (politics).

Operations[edit]

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 include their contract for information technology for the 2004 Olympics in Greece[13] and from 2001 to 2005, SAIC was the primary contractor for the FBI's unsuccessful Virtual Case File project.[14]

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

In 2002, SAIC was chosen by the NSA to produce a technology demonstration platform for the agency's Trailblazer Project in a contract worth $280 million. Trailblazer was a "Digital Network Intelligence" system, intended to analyze data carried on computer networks. Project participants included Boeing, Computer Sciences Corporation, and Booz Allen Hamilton. SAIC had participated in the concept definition phase of Trailblazer, beginning March 2001.[15] According to science news site PhysOrg.com, Trailblazer was a continuation of the earlier ThinThread program.[16] 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.[17]

Campaign contributions[edit]

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.[18]

Subsidiaries[edit]

Former subsidiaries[edit]

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,[26] and subsequently was acquired by VeriSign, Inc. for $21 billion.[27]

FBI allegations[edit]

In June 2001 the Federal Bureau of Investigation (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.[citation needed]

"There were an average of 1.3 changes every day from the FBI, for a total of 399 changes during the period," Punaro said.[28]

2013 split into two companies[edit]

In August 2012 SAIC, months after retired Air Force General John P. Jumper was appointed its fourth chief executive, SAIC announced that it plans to split into two publicly traded companies.[29] In November 2012, SAIC announced more details of the split, which will occur on September 27, 2013.[30] The company will spin-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 will become a $7 billion-per-year IT company specializing in technology for the national security, health, and engineering sectors. The smaller company will be led by Tony Moraco, who heads SAIC’s Intelligence, Surveillance and Reconnaissance group, and the bigger one will be led by John P. Jumper.[31] The split will allow both companies to pursue more business, which it could not pursue as a single company due to conflicts of interest.[32] In February 2013, it was announced that the smaller spun-off company will get the name "Science Applications International Corp." and will stay in the current headquarters, while the larger company will change its name to Leidos.,[33] (created by clipping the word kaleidoscope) and will move its headquarters to Reston.[34]

See also[edit]

References[edit]

  1. ^ a b Aitoro, Jill R. (27 September 2013). "What to expect from Leidos and SAIC when they start trading Sept. 30". Washington Business Journal. Retrieved 29 September 2013. 
  2. ^ a b c Aitoro, Jill R. (27 September 2013). "Exclusive: John Jumper explains why the Leidos-SAIC split had to happen". Washington Business Journal. Retrieved 26 September 2013. 
  3. ^ a b "www.leidos.com". Retrieved 29 September 2013. 
  4. ^ "SAIC, Inc.'s Board of Directors Approves Spin-Off of its Services Business". 9 September 2013. Retrieved 29 September 2013. 
  5. ^ a b Science Applications International Corporation. "Fiscal Year 2013 annual report on Form 10-K". Retrieved 9 August 2013. 
  6. ^ SAIC. "Industry Rankings". Retrieved 9 August 2013. 
  7. ^ 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
  8. ^ a b SAIC - News & Media - SAIC, Inc. Announces Closing of Initial Public Offering. Investors.saic.com. Retrieved on 2013-08-17.
  9. ^ SAIC Moves Corporate Headquarters to McLean, Virginia
  10. ^ a b Censer, Marjorie (August 30, 2012). "SAIC to split into two public companies". The Washington Post. Retrieved 8 January 2013. 
  11. ^ Paul McDougall (March 15, 2012). "SAIC Pays $500 Million In Record Settlement With NYC". InformationWeek. Retrieved September 25, 2013. 
  12. ^ The Center for Responsive Politics. http://www.opensecrets.org/orgs/summary.php?id=D000000369a. Accessed 6/9/13.
  13. ^ "After Olympics contractors leave behind IT legacy". Washington Technology. Archived from the original on May 6, 2006. Retrieved August 13, 2006. 
  14. ^ Eggen, Dan; Witte, Griff (August 18, 2006). "The FBI's Upgrade That Wasn't". Washington Post. Retrieved February 8, 2007. 
  15. ^ Patience Wait (October 21, 2002). "SAIC team gets demonstration phase of Trailblazer". Washington Technology. 
  16. ^ "NSA datamining pushes tech envelope". PhysOrg.com. May 25, 2006. 
  17. ^ Martin Sieff (August 18, 2005). "NSA's New Boss Puts Faith In Hi Tech Fixes". Space War. 
  18. ^ The Center for Responsive politics. http://www.opensecrets.org/orgs/summary.php?id=D000000369a. Accessed 6/9/13.
  19. ^ a b c d http://www.leidos.com/about/companies. Retrieved 19 December 2013.  Missing or empty |title= (help)
  20. ^ "Reveal CT-800 Baggage Inspection System". Retrieved 19 December 2013. 
  21. ^ http://www.cloudshield.com/. Retrieved 19 December 2013.  Missing or empty |title= (help)
  22. ^ http://www.varec.com/. Retrieved 19 December 2013.  Missing or empty |title= (help)
  23. ^ http://www.leidoshealth.com/. Retrieved 19 December 2013.  Missing or empty |title= (help)
  24. ^ http://www.leidos.com/engineering. Retrieved 19 December 2013.  Missing or empty |title= (help)
  25. ^ "R. W. Beck Is Now SAIC Energy, Environment & Infrastructure, LLC". Retrieved 2013-03-25. 
  26. ^ "Science Applications International Corporation vs. Comptroller of the Treasury" (PDF). txcrt.state.md.us. Retrieved 2008-04-17. 
  27. ^ "Company History". networksolutions.com. Retrieved 2008-03-29. 
  28. ^ "SAIC Says FBI Should Deploy its Software". SignOnSanDiego.com. Retrieved September 18, 2008. 
  29. ^ Censer, Marjorie (August 30, 2012). "SAIC to split into two public companies". Washington Post. Retrieved March 4, 2013. 
  30. ^ "SAIC, Inc. (SAI) to Spin Off Services Business". streetinsider.com. 9 September 2013. Retrieved 9 September 2013. 
  31. ^ Censer, Marjorie (November 5, 2012). "When SAIC splits, Jumper and Moraco will head companies". Washington Post. Retrieved March 4, 2013. 
  32. ^ Censer, Marjorie (March 3, 2013). "SAIC to name technology business Leidos". Washington Post. Retrieved March 4, 2013. 
  33. ^ Censer, Marjorie (February 25, 2013). "SAIC to name solutions business Leidos". Washington Post. Retrieved March 4, 2013. 
  34. ^ SAIC. "Leidos Headquarters To Be In Reston, VA". Retrieved 15 August 2013. 

Further reading[edit]

External links[edit]