Science Applications International Corporation

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Science Applications International Corporation
Type Public (NYSE: SAI)
Founded 1969
Headquarters La Jolla, California, USA
Key people Ken Dahlberg (CEO)
Dr. J. R. Beyster (Founder)
Industry Defense contractor
Revenue $10.07 billion (2009)
Operating income $776 million (2009)
Net income $452 million (2009)
Employees approximately 46,000
Website www.saic.com
SAIC headquarters in La Jolla

Science Applications International Corporation (SAIC) NYSE: SAI is a FORTUNE 500 scientific, engineering and technology applications company headquartered in the United States with numerous federal, state, and private sector clients. It 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.

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[1] and from 2001 to 2005, SAIC was the primary contractor for the FBI's failed Virtual Case File project.[2]

Contents

[edit] History

SAIC was founded by Dr. J. Robert "Bob" Beyster in 1969 in La Jolla, California, as Science Applications Incorporated.[3] As of 2009, SAIC employed 45,000 employees in 150 cities worldwide and reported $10.07 billion in revenue for its fiscal year ended January 31, 2009,[4] making it number 285[5] on the Fortune 500 list.

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 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 Deutsch, 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.

[edit] Initial public offering

SAIC conducted an initial public offering of common stock on October 13, 2006. The IPO raised US$1.7 billion. After the proposed IPO, existing employee-owners would retain between 80 percent and 90 percent of the new company, meaning that the employee ownership would be substantially preserved.[citation needed]

On September 27, 2006, during a special meeting of stockholders, employee-owners voted by a margin of 86% to proceed with the IPO. The initial stock price is estimated at $13–15 per share, with a public offering of 75 million shares. If the underwriters, Bear Stearns and Morgan Stanley, exercise overallotment options, an additional 11.25 million shares will be offered. The company also plans to pay a special dividend to existing stockholders, upon completion of the IPO, of $1.6 billion to $2.4 billion.

[edit] Operations

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

In January 1999, new SAIC consultant Steven Hatfill and his collaborator, SAIC vice president Joseph Soukup, commissioned William C. Patrick (a retired leading figure in the old U.S. bioweapons program) to report on the possibilities of terrorist anthrax mailings in the United States. (There had been a spate of hoax anthrax mailings in the previous two years.) Barbara Hatch Rosenberg said that the report was commissioned "under a CIA contract to SAIC". However, SAIC said Hatfill and Soukup commissioned it internally—there was no outside client.

Patrick produced his 28-page report in February 1999. Some subsequently saw it as a "blueprint" for the 2001 anthrax attacks. The report suggested the maximum amount of anthrax powder—2.5 grams—that could be put in an envelope without producing a suspicious bulge. This was just a little more than the actual amounts—2 grams each—in the letters sent to Senators Tom Daschle and Patrick Leahy. But the report also suggested that a terrorist might produce a spore concentration of 50 billion spores per gram. This was only one-twentieth of the actual concentration—1 trillion spores per gram—in the letters sent to the senators.[6]

In 2002, SAIC was chosen by the NSA to produce a technology demonstration platform for the agency's Trailblazer program in a contract worth $280 million. Trailblazer is 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 also participated in the concept definition phase of Trailblazer, beginning March 2001.[7] According to science news site PhysOrg.com, Trailblazer was a continuation of the earlier ThinThread program.[8] 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.[9]

[edit] Subsidiaries

  • bd Systems
  • Bechtel SAIC Company, LLC, a joint venture between SAIC and Bechtel
  • Benham, a subsidiary of SAIC and its subsidiaries
  • Danet
  • Eagan, McAllister Associates, Inc a wholly owned subsidiary of SAIC under the C4I business unit.
  • Hicks & Associates
  • SAIC-Frederick, Inc.
  • SAIC International Subsidiaries
  • SAIC Venture Capital Corporation
  • Varec
  • Applied Marine Technology Corporation, A SAIC Operation
  • EAI Corporation, a wholly owned subsidiary

[edit] SAIC's India presence

SAIC has its development center in Delhi and Bangalore. Scicom Technologies Noida was acquired by SAIC in September 2007.

[edit] Former subsidiaries

AMSEC LLC, a business partnership between SAIC and Northrop Grumman subsidiary Newport News Shipbuilding divested on 13 July 2007.[citation needed] Network Solutions was acquired by SAIC in 1995,[10] and subsequently was acquired by VeriSign, Inc. for $21 billion.[11]

[edit] FBI allegations

In June 2001 the Federal Bureau of Investigation (FBI) paid SAIC $122 million to create a virtual case file system (VCF) software 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."

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. During 15 months that SAIC worked on the program, 19 different government managers were involved and 36 contract modifications were ordered, he said.

"There were an average of 1.3 changes every day from the FBI, for a total of 399 changes during the period," Punaro said. [12]

[edit] References

  1. ^ "After Olympics contractors leave behind IT legacy". Washington Technology. http://www.washingtontechnology.com/news/19_12/cover-stories/24520-1.html. Retrieved on August 13 2006. 
  2. ^ "The FBI's Upgrade That Wasn't". Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2006/08/17/AR2006081701485.html. Retrieved on February 8 2007. 
  3. ^ 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
  4. ^ "Company Overview". SAIC Web Site. http://investors.saic.com/releasedetail.cfm?ReleaseID=373048. Retrieved on March 26 2009. 
  5. ^ "SAIC Ranks Among Highest Revenue Businesses". SAIC Web Site. http://www.saic.com/cover-archive/saicachieve/500.html. Retrieved on August 13 2006. 
  6. ^ William J Broad, "Terror Anthrax Linked to Type Made by U.S.", New York Times, 3 December 2001; Barbara Hatch Rosenberg (director of the Federation of American Scientists' biochem weapons working group), "Analysis of the Anthrax Attacks" (copy); Guy Gugliotta and Dan Eggen, "Biological Warfare Experts Questioned in Anthrax Probe", Washington Post, June 28, 2002 (UCLA copy); Brian Ross, "Blueprint for Anthrax Attack", ABC News online, 27 June 2002; Marilyn W Thompson, "The Pursuit of Steven Hatfill", Washington Post, 14 September 2003, p.W06.)
  7. ^ Patience Wait (October 21, 2002). "SAIC team gets demonstration phase of Trailblazer". Washington Technology. http://www.washingtontechnology.com/online/1_1/19355-1.html. 
  8. ^ "NSA datamining pushes tech envelope". PhysOrg.com. May 25, 2006. http://www.physorg.com/news67784662.html. .
  9. ^ Martin Sieff (August 18, 2005). "NSA's New Boss Puts Faith In Hi Tech Fixes". Space War. http://www.spacewar.com/news/miltech-05zx.html. 
  10. ^ "Science Applications International Corporation vs. Comptroller of the Treasury" (PDF). txcrt.state.md.us. http://www.txcrt.state.md.us/decisions/pdf/saic.pdf. Retrieved on 2008-04-17. 
  11. ^ "Company History". networksolutions.com. http://about-networksolutions.com/corporate-history.php. Retrieved on 2008-03-29. 
  12. ^ "SAIC Says FBI Should Deploy its Software". SignOnSanDiego.com. http://www.signonsandiego.com/news/business/20050203-1653-cnssaiccrx.html. Retrieved on September 18 2008. 

[edit] External links

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