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SAIC CEO Tony Moraco on The ‘New’ SAIC, Post-Spinoff Goals and Market Strategy

SAIC CEO Tony Moraco on The 'New' SAIC, Post-Spinoff Goals and Market Strategy - top government contractors - best government contracting event
Tony Moraco - SAIC

Next Gen SAIC - bell openingTony Moraco - SAIC, ExecutiveMosaic

 

 

 

 

 

 

After more than four decades of doing business as Science Applications International Corp., the iconic contractor founded by Dr. Robert Beyster divided into two independent companies in September.

Tony Moraco (above), who joined SAIC in 2006 and formerly led its government solutions group prior to the split, now leads one of those companies as chief executive: the “new” SAIC, which hones its primary focus on enterprise information technology and technical services work for federal agencies.

In this conversation with ExecutiveBiz, Moraco discussed some of his immediate priorities in leading the company post-split, what he sees as key to maintaining the company’s brand recognition in the federal market and how agencies have changed their purchasing strategies.

 

Tony Moraco in front of SAICExecutiveBiz: What have you been up to since the spin-off?

Tony Moraco: It’s been an exciting few weeks after a year devoted to designing the next generation SAIC and completing our separation from Leidos Holdings, Inc. We had the wonderful opportunity to celebrate our first week of operation by ringing the Closing Bell at the New York Stock Exchange with our leadership team and board of directors.

However, in reflecting over the past year, what I am most excited about is how our people maintained their laser focus on supporting our customers' missions while much change was occurring all around them; we really do have the best and brightest. We really do make the most of our strong 40+ year partnership with our customers, reinforced by having two-thirds of our employees deployed and working alongside our clients every day.

It has been an intense year of change ““ as we rolled out the new company, implemented a new operating structure, and articulated SAIC's value proposition for our customers and investors. With all that in place now, I'm most eager for SAIC to begin to tap our full potential.

Click here to read GovCon Wire’s coverage of Moraco’s election to lead SAIC.

 

Systems EngineeringExecutiveBiz: Looking ahead to the business operations, what are some of the addressable markets that SAIC has increased access to now?

Tony Moraco: With the creation of the new SAIC, two principal elements of our business model's value creation shifted. Thanks to the creation of the new company, we eliminated most ““ albeit not all – concerns of organizational conflicts of interest in the federal acquisition process.

We now have broader market access to our larger customers in the Navy and the Army, particularly with our engineering capabilities that conflicted with our former parent company.

We also believe we have strong adjacencies in the Air Force and Marine Corps for our existing and expanded capabilities. We believe there are a lot of technology transfer opportunities and untapped synergies in the DoD agencies and military services, as well as some select system engineering-type contracts within the intelligence community.

There are also market expansion opportunities for us as a leading technology integrator to provide full lifecycle services and solutions in the technical, engineering and enterprise IT markets. These are some of the many unique opportunities to expand our operational apertures to broader markets and leverage four decades of past performance to offer capabilities to more potential customers.

Click here to read Moraco’s take on the market conditions surrounding SAIC’s separation.

 

SAIC HQExecutiveBiz: SAIC has strong brand recognition within this industry. What’s the key for SAIC to leverage that recognition in a changing market landscape?

Tony Moraco: A large part is continuity with our customers with whom we have served for many years in very critical mission areas. Our opportunity here is to continue the proud heritage and the trusted brand that SAIC has in this marketplace while adapting to the changes in the market.

We’ll promote SAIC as a leading technology partner for those mission critical areas that our customers demand. And we’re going to deliver the proven capabilities that we’ve developed, refined and honed over time.

We have organized and optimized our capabilities, such that we can deliver on a larger scale and diverse base to ensure that the customers are getting the services and solutions they need at a very competitive price.

At our scale of $4 billion, we believe the convergence of technical and engineering services, and enterprise IT, adds high value as a reliable, proven, and integrated performer for the customer. We believe our proven ability to deliver, combined with our technical capabilities and in-depth systems integration experience will be recognized and valued by the marketplace.

Click here to read Moraco’s comments on SAIC’s recently announced plan to buy back 5 million shares.

 

Pic courtesy of Defense News
Pic courtesy of Defense News
ExecutiveBiz: Agency procurement and acquisition has changed in recent years. How is SAIC adapting its strategy to win business in the federal market?

Tony Moraco: Our sense is that the customer's acquisition strategies have shifted, in part, to using more indefinite-delivery and indefinite-quantity (IDIQ) contracts as a means to consolidate many independent contracts into one.

The IDIQ contracts offer flexibility to customers and allow them to be selective and specific in what they buy under a broader services business model.

That is the model that SAIC has considerable experience in operating. Also given that we just redesigned our company and optimized our operating model and reduced our cost structure, we intend to meet customer requirements in a much more competitive way.

So, we’re leveraging our broad portfolio of existing IDIQ contracts, as well as pursuing new ones, which we believe positions SAIC well given we are the prime on 91 percent of our contracts. That's a significant differentiator for a company of our size.

That prime contractor footprint allows us to control our destiny, gives us access to agency-level strategies and road maps. It enables us to facilitate solutions on behalf of our customers with our broad insights from the full life cycle of support.

So, as the customers buy on a broader scale and consolidate contracts into larger prime vehicles/IDIQs, we think this strategic shift aligns extremely well to our portfolio, our capabilities and our ability to serve our customers.

Click here to read more details about the separation of SAIC and Leidos.

 

SAICExecutiveBiz: Do you have any other thoughts you'd like to add?

Tony Moraco: SAIC has an incredible culture committed to ethical behavior, an entrepreneurial spirit to drive innovation, and takes great pride in mission performance. Every one of our 14,000 employees is part of a 40 year heritage of delivering on commitments and solving the most challenging problems for our customers.

We navigated a major organizational change and never lost sight of the value creation objectives to better serve our customers, increase shareholder return, and create opportunities for our employees.

We know this market very well and we will continue to add value on a very competitive basis in the areas most critical to our customers.. SAIC is a great company of exceptional people and I am honored to lead such a fantastic team.

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