SAIC's former headquarters in La Jolla, San Diego

 

Science Applications International Corporation, also known as SAIC, is an American defense company headquartered in Tysons Corner, Virginia that provides scientific, engineering, systems integration, and technical services and solutions. SAIC 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. As of 2009, SAIC employed 45,000 employees in 150 cities worldwide and reported $10.8 billion in revenue for its fiscal year ended January 31, 2009, making it number 285 on the Fortune 500 list.

 

History

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

 

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

 

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

 

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 worth about $7 billion a year.

 

Management

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 Walter P. 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.

 

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.

 

Operations

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 and from 2001 to 2005, SAIC was the primary contractor for the FBI's unsuccessful Virtual Case File project.

 

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 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. According to science news site PhysOrg.com, Trailblazer was a continuation of the earlier ThinThread program. 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. 

 

Subsidiaries

• bd Systems

• Bechtel SAIC Company, LLC, a joint venture between SAIC and Bechtel

• Beck Disaster Recovery BDR

• Benham, a subsidiary of SAIC and its subsidiaries

• Calnais

• CloudShield

• Danet

• Eagan, McAllister Associates, Inc a wholly owned subsidiary of SAIC under the C4I business unit.

• Hicks & Associates

• MEDPROTECT, LLC

• Reveal Imaging

• R. W. Beck, Inc.

• SAIC-Frederick, Inc.

• SAIC International Subsidiaries

• SAIC Venture Capital Corporation

• Varec (Red)

• Applied Marine Technology Corporation, A SAIC Operation

• EAI Corporation, a wholly owned subsidiary

• Vitalize

• maxIT Healthcare

 

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, and subsequently was acquired by VeriSign, Inc. for $21 billion.

 

Anthrax report

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.

 

FBI allegations

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."

 

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.

 

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

 

2013 Split into two companies

In August 2012 SAIC, months after retired General John P. Jumper was appointed its fourth chief executive, SAIC announced that it plans to split itself into two publicly traded companies. In November 2012, SAIC announced more details of the split, which is expected to occur sometime between July 2013 and January 2014. The company will divide in two, forming approximately $4 billion-a-year service company focused on government services, like systems engineering and technical assistance, financial analysis and program office support, and approximately $7 billion-a-year IT company specializing in technology for the national security, health and engineering sectors. The smaller company will be lead by Tony Moraco, who heads SAIC’s Intelligence, Surveillance and Reconnaissance group, and the bigger one will be lead by John P. Jumper. In February 2013, it was announced that the smaller IT company will retain the name "Science Applications International Corp." while the larger company will change name to Leidos. The name Leidos was created by clipping the word kaleidoscope. The split will allow both companies to pursue more business, which it could not pursue as a single company due to conflict of interests.