From saic at vision.moundalexis.com Wed May 2 13:40:22 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 2 May 2007 09:40:22 -0400 (EDT) Subject: [saic] A Look at Several Recent IPOs Message-ID: <20070502094013.I13243-100000@vision.moundalexis.com> 2 May 2007 ; Morningstar A Look at Several Recent IPOs http://news.morningstar.com/article/article.asp?id=192216 --- By Michael Hodel, CFA Several interesting firms have gone public recently, but valuation is an issue. Last quarter [1], we offered some thoughts on the initial public offering market and looked at three recently public stocks that we thought looked attractive: Energy Transfer Equity (ETE), SAIC (SAI), and Stanley (SXE). Since then, our opinion on each of these firms has not changed, but the share prices have. Though IPO activity in the energy sector has cooled somewhat over the past three months, the share prices of many pipeline operators have risen steadily. Energy Transfer Equity is no exception; the stock is up about 19% since we highlighted it, and we no longer believe it is a bargain. The business, however, continues to perform well. Also, we think the financial performance of the recently acquired Transwestern pipeline demonstrates that management paid a great price for this asset, especially given the growth opportunities it faces. Shares of Stanley have fallen a bit, while SAIC's shares have been essentially flat when compared with the numbers three months ago, and we still think each is attractively priced. Both firms recently reported strong quarterly results, but the cancellation of some nonessential contracts serviced by other commodity government contractors is weighing on the sector. In addition, congressional debate over troop funding could delay some of SAIC's contracts, while Stanley has faced protests concerning a contract it was recently awarded. Despite any trouble in the short term, we still believe that both firms will prosper over time thanks to their ability to uniquely service federal government and military contracts. Since two of our picks from last quarter are still trading at what we believe are attractive valuations, we thought we'd take a look a handful of recent IPOs that we think investors should avoid at current prices. However, each is a firm we'd love to own if given the chance to buy at an attractive valuation. Last time we mentioned that financial services has been a "hot" sector for IPOs, a condition that tends to exist when valuations are stretched. Though the overall IPO market remains tepid, financials still seem to be sparking a lot of investor interest. Two recent financial IPOs, in particular, have attracted lots of attention and have seen their shares soar. NYMEX Holdings (NMX) and Fortress Investment Group (FIG). Both companies have earned our "wide" moat rating, but both are also currently have 1-star Morningstar Ratings for stocks because of their valuations. Finally, National CineMedia (NCMI) has garnered some attention among Morningstar's analysts because of its interesting position in the world of advertising. Unlike the two financial firms, we think the shares are roughly fairly valued, but we aren't quite as enamored with the firm's competitive position. Below we've provided excerpts of our analysts' reports on these three firms. In future columns we'll discuss these stocks and other interesting ideas that emerge as we look through the ranks of the newly public. NYMEX Holdings Futures exchanges have one of the best business models going, and Nymex, which today is the largest physical commodity-based futures exchange in the world, has seen earnings take off since becoming a for-profit firm. In fact, earnings have more than doubled each year since 2003. Much of this gain can be attributed to the fundamental attractiveness of the futures industry. Trading demand has grown rapidly as new technology has made it easier to invest in futures contracts. The barriers to entry are also high, as futures exchanges hold a monopoly on the clearing of their contracts. Lastly, industry economics are very attractive, with low variable costs leading to impressive operating margins. Nymex's refusal to allow electronic trading opened the door for the startup IntercontinentalExchange (ICE) to steal up to half of its crude oil market share. Nymex has since recaptured much of the lost share, but not until its monopoly in energy trading had been destroyed. We think the overall market is growing fast enough for both of these firms to succeed, and Nymex should continue to turn oil into cash for its investors. However, this firm is still riskier than the some of the other exchanges we cover--including CBOT Holdings (BOT) and Chicago Mercantile Exchange (CME). Nymex went public in November at $59 per share; enthusiasm for the exchanges has pushed the stock up to about $129, which we think is much too high. Fortress Investment Group As a publicly traded alternative asset manager, Fortress is the first of its kind in the U.S. The firm runs more than $30 billion in assets across a suite of private-equity and hedge fund products. These have been heady times for investment managers like Fortress; assets under management increased by more than 90% annually from 2001 to 2006. The good times won't last forever, but Fortress boasts advantages that should endure over the long haul. The firm has amassed an excellent performance record in both its hedge fund and private-equity strategies. In so doing, Fortress has carved out a niche that resonates with institutional investors, engendering deep loyalty and attracting additional investment capital. In addition, the firm's record should enhance its ability to launch new funds while reassuring prospective lenders of its turnaround acumen. The Fortress brand is also well recognized, a factor that's likely to increasingly benefit the company as the alternative investment field grows more crowded. Finally, as institutions increasingly broaden their gaze to hedge funds and private equity, they're likely to seek out firms with staying power, characterized by size, stability, and infrastructure. Fortress went public in February at $18.50 per share and now trades around $30, but we think that the fair value of the shares is substantially lower. Our assessment assumes that demand for the firm's funds will remain brisk and profitability will remain strong, but the firm faces several risks that we think should force investors to require a fairly high return on this stock. These risks include the firm's reliance on performance-based fees, its byzantine ownership structure, and the potential that one of its principals may leave. National CineMedia National CineMedia develops an entertainment and advertising program that is played before feature films at movie theaters. The company makes money by selling advertising inventory to advertisers, who have begun to appreciate that cinema advertising can be tailored to movie genre, rating, time, and theater location. Movie theaters also deliver an engagedience, whereas radio, television, and outdoor advertising is mostly ignored by consumers. National d its main competitor, Screenvision, effectively control 91% of the market through exclusive contractheater chains. This makes i very difficult for a smaller competitor to gain any scale. National Cin 30-year exclusive contracts with the three largest movie theater chains in the country, which are ambers. The firm is very profitable, and it would have posted a 46% operating margin during 2006 had urrent form. There are soe risks here, though. In exchange for lowering the fees National CineMediathe founding members loaded the company with debt and were entitled to the proceeds from the debt isal CineMedia's initial public offering. National CineMedia must also pay 55% of its free cash flow to the founding members. Finally, National CineMedia also has complex ownership structure. The stock, which went public in February at $21 per share, now trades at $28. We think the current price is pr to its fair value, based on the assumption that growth will remain strong and profitability actuallime. --- [1] http://news.morningstar.com/article/article.asp?id=184534 From saic at vision.moundalexis.com Wed May 2 13:41:16 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 2 May 2007 09:41:16 -0400 (EDT) Subject: [saic] SAIC Receives Eisenhower Award from the U.S. Small Business Administration Message-ID: <20070502094110.C13243-100000@vision.moundalexis.com> 2 May 2007 ; PRNewswire SAIC Receives Eisenhower Award from the U.S. Small Business Administration http://www.sys-con.com/read/365679.htm --- SAN DIEGO and MCLEAN, Va., April 23 /PRNewswire-FirstCall/ -- Science Applications International Corporation announced today that it received the Dwight D. Eisenhower Award for Excellence from the Small Business Administration (SBA). SAIC received this award in the research and development category, recognizing its commitment to using small businesses as subcontractors and suppliers. During the federal government fiscal year 2006, SAIC subcontracted more than $1.2 billion to small businesses. This amount accounts for approximately 15 percent of SAIC's total revenue for the same period. The Eisenhower Award was presented to George Otchere, SAIC senior vice president and director of small business programs, during Small Business Week in Washington, D.C. "SAIC believes that working with small businesses makes good business sense," said Otchere. "By working together, we tap the strength of diversity. Our highly talented employees, in conjunction with the capable professional staff of our small business teammates, create innovative solutions that help solve complex challenges facing our customers and the nation." The SBA, created in 1953 during the Eisenhower administration, is dedicated to helping the growth of small businesses. The Eisenhower Award, created in 1991, is given to firms that qualify as large businesses and operate as federal prime contractors in the areas of research and development, manufacturing, service, construction, and utility. Nominees for the Eisenhower Award are selected from a large pool of contractors. To be considered for the award, companies must provide maximum, practicable opportunities for small businesses as required by the statute and regulations. Eisenhower Award winners are chosen from a select group. From saic at vision.moundalexis.com Wed May 2 13:42:17 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 2 May 2007 09:42:17 -0400 (EDT) Subject: [saic] SAIC Pushes Past Web 2.0 to Web 3.0 Message-ID: <20070502094212.L13243-100000@vision.moundalexis.com> 2 May 2007 ; SOAWorld SAIC Pushes Past Web 2.0 to Web 3.0 http://ajax.sys-con.com/read/368248.htm --- SAIC is building a newfangled dynamic SSOA on a recovery-oriented Service Fabric Science Applications International Corporation (SAIC) is putting a consortium together that is building a newfangled dynamic Semantic SOA Solution (SSOA) on a recovery-oriented Service Fabric. It is supposed to be self-assembling, self-healing, self-managing, self-scaling and self-auditing, apparently limiting humans to just throwing the switch. It runs on commercially available hardware and is supposed to make users aware of changes in data and in business services, translating into adaptive processes and so-called "persistent awareness." SAIC will be demonstrating a prototype at the Department of Defense Intelligence Information System Worldwide conference this week. The SSOA Consortium so far includes Agent Logic, Dynamic Research Corporation, Kapow Technologies, Paremus, Siderean Software and SoftPro Technologies. They say the next generation of semantic-based systems could be called Web 3.0. From saic at vision.moundalexis.com Wed May 2 13:44:20 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 2 May 2007 09:44:20 -0400 (EDT) Subject: [saic] AMSEC LLC Receives Department of Defense Award Message-ID: <20070502094414.C13243-100000@vision.moundalexis.com> 2 May 2007 ; PRNewswire AMSEC LLC Receives Department of Defense Award http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-02-2007/0004578758 --- SAN DIEGO and MCLEAN, Va., May 2 /PRNewswire-FirstCall/ -- Science Applications International Corporation (NYSE: SAI) announced today that AMSEC LLC received a prestigious 2007 Department of Defense Pro Patria award from the Virginia Committee for Employer Support of the Guard and Reserve (ESGR). AMSEC LLC received this award recognizing its personnel policies and practices in support of its employees who also serve in the National Guard and armed forces reserves. According to a press release from the Virginia Committee for ESGR, AMSEC LLC was one of nine businesses, organizations and government agencies in the state selected to receive an award. AMSEC LLC was nominated by Petty Officer 1st Class Ryan Harwood, U.S. Navy Reserve. "I was recalled to active duty with very short notice and AMSEC LLC as well as my coworkers provided exceptional support of my military service," said Harwood. "AMSEC took extraordinary actions to make sure that my sudden recall had little or no impact on my benefits, pay, vacation accrual and retirement plan." AMSEC also provided Harwood with constant updates via email and access to the same training as his coworkers. They volunteered to relay messages on behalf of Harwood's family when they were unable to contact him and sent care packages monthly gathered by his co-workers. The Pro Patria award, meaning "For the Country" recognizes outstanding support and dedication to the men and women of the Guard and Reserve. AMSEC LLC was formed in June 1999 as a joint venture between Science Applications International Corporation (SAIC) and Newport News Shipbuilding (NNS). Prior to the creation of the limited liability corporation (LLC), AMSEC had been a wholly owned subsidiary of SAIC since 1987, and has been in existence since 1981. Throughout its history, AMSEC has provided various engineering and technical services to the U.S. government and the commercial maritime industry. From saic at vision.moundalexis.com Thu May 3 01:32:23 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 2 May 2007 21:32:23 -0400 (EDT) Subject: [saic] Contracts for 5/2/2007 Message-ID: <20070502213147.O13243-100000@vision.moundalexis.com> 2 May 2007 ; United States Department of Defense Contracts for 5/2/2007 http://www.defenselink.mil/contracts/contract.aspx?contractid=3508 --- CONTRACTS from the United States Department of Defense No. 519-07 FOR RELEASE AT May 02, 2007 Media Contact: (703) 697-5131/697-5132 Public/Industry(703) 428-0711 CONTRACTS DEFENSE LOGISTICS AGENCY Science Applications International Corp., Fairfield, N.J., is being awarded a maximum $6,200,000,000 fixed price with economic price adjustment contract for privatization of chemicals and packaged petroleum, oils and lubricants. Using services are Army, Navy, Air Force, Marine Corps, and Federal civilian agencies. This is an indefinite quantity contract with a five-year base period and one 5-year option periods. Proposals were Web-solicited and 3 responded. Contract funds will expire at the end of the current fiscal year. Date of performance completion is May 1, 2012. Contracting activity is Defense Supply Center Richmond, Richmond, Va. (SPM4AR-07-D-0001). [...] From saic at vision.moundalexis.com Fri May 4 01:12:55 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 3 May 2007 21:12:55 -0400 (EDT) Subject: [saic] Contracts for 5/3/2007 Message-ID: <20070503211244.Y13243-100000@vision.moundalexis.com> 3 May 2007 ; United States Department of Defense Contracts for 5/3/2007 http://www.defenselink.mil/contracts/contract.aspx?contractid=3509 --- CONTRACTS from the United States Department of Defense No. 524-07 FOR RELEASE AT May 03, 2007 Media Contact: (703) 697-5131/697-5132 Public/Industry(703) 428-0711 CONTRACTS [...] AIR FORCE Science Applications International Corp., San Diego, Calif., is being awarded an $5,699,067 cost-plus-fixed-type contract.This action provides for clean sweep, identification algorithm development.The objective of the clean sweep is to develop a wide area search (detection) and high-confidence identification (HCID) capability to sweep clean an area of quiescent (non-moving, non RF-emitting) military objects of interest.Innovative solutions will be developed under this contract to detect, characterize, and provide HCID of targets in 3D data. At this time, $419,860 have been obligated.Solicitations began January 2007 and negotiations were complete May 2007.This work will be complete February 2011.Air Force Research Laboratory, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8650-07-C-1129). [...] From saic at vision.moundalexis.com Thu May 17 21:25:19 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 17 May 2007 17:25:19 -0400 (EDT) Subject: [saic] Budget Cuts Would Harm Military Upgrade Message-ID: <20070517172510.E13243-100000@vision.moundalexis.com> 17 May 2007 ; Forbes (AP) Budget Cuts Would Harm Military Upgrade http://www.forbes.com/feeds/ap/2007/05/15/ap3724728.html --- By DONNA BORAK 05.15.07, 5:14 PM ET A congressional threat to slash another 25 percent from next year's budget for a key military modernization program would jeopardize the program, an Army official said Tuesday. Boeing (nyse: BA) Co. and SAIC (nyse: SAI) Inc., the lead contractors on a multiyear, multibillion-dollar contract to modernize U.S. ground forces, are hoping the Army's protest will convince U.S. lawmakers to reconsider a House Armed Services committee vote last week, recommending that $857 million be cut next year from what the Army says is its most crucial program. The money would be used instead to build a controverial replacement engine for the F-35 Joint Strike Fighter. General Electric Co. (nyse: GE) and Britain's Rolls-Royce PLC (other-otc: RYCEY.PK) are lead contractors on that deal. Congress must approve any proposed cuts and some lawmakers have criticized the modernization program in the past for cost overruns and failing to meet deadlines although the Senate has voted favorably when funding requests for the program have been on the table. In February, President Bush proposed a $3.4 billion reduction through fiscal 2012 - $680 million a year - to help rein in military spending. If approved, the two cuts would leave 2.8 billion in next year's budget to fund the program, 35 percent below original plans. "If these cuts stand, it will have a material impact to Future Combat Systems. We will be doomed to spend the next 20 to 30 years with the existing combat platform that we have today," Lt. Gen. Stephen Speakes told reporters at a Pentagon briefing Tuesday. The latest proposed cutback would cancel two parts of the program, including manned ground vehicles and a type of unmanned aerial vehicle used for surveillance, Speakes said. Systems engineering would also be targeted, which would set back the Army's efforts to coordinate various programs aimed at helping soldiers in Iraq, Speakes added. Boeing, along with partners Morris Township, N.J.-based Honeywell International Inc. (nyse: HON), and SAIC, have insisted that stable funding is critical to meeting program requirements. "Repeated funding cuts directly impact the delivery of essential FCS capabilities to our nation's soldiers," said Mary McAdam, a spokeswoman for Boeing Co. The costs of the war in Iraq have forced the military and policymakers into tough budget choices. FCS plans are being trimmed to pay for additional personnel and vehicles, such as the Mine Resistant Ambush Protected unit, needed on the ground in Baghdad. While "we need to ensure that we get funding for MRAPs ... we shouldn't sacrifice the future of America's Army," Speakes said. The Army agrees it needs more than the 2,500 MRAPs already ordered to curb rising death tolls caused by improvised explosive devices used by the enemy in Iraq and Afghanistan. How many more has not been decided although Pentagon officials have met with the Secretary of Defense to discuss funding and a timetable for a new competitive bid. Defense analyst Loren Thompson of the Lexington Institute in Washington says the Army sought to make FCS relevant in the global war on terror, but delivery dates extended until 2014 convinced some U.S. lawmakers that there are other ways to provide protection for U.S. soldiers in the near term. "The problem FCS has is that although losing $800 million is a big budget hit, nobody can prove that it is going to hurt a soldier by taking the money out," said Thompson. Shares of Boeing rose 48 cents to $94.82 in extended trading after gaining 78 cents to close at $94.34 in the regular trading session. Shares of SAIC rose 21 cents to end at $18.28 Tuesday and Honeywell shares rose 93 cents to $58.94 in extended trading after falling 69 cents to close the regular trading session at $58.01. From saic at vision.moundalexis.com Thu May 17 21:26:50 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 17 May 2007 17:26:50 -0400 (EDT) Subject: [saic] Contracts for 5/16/2007 Message-ID: <20070517172520.X13243-100000@vision.moundalexis.com> 17 May 2007 ; United States Department of Defense Contracts for 5/16/2007 http://www.defenselink.mil/contracts/contract.aspx?contractid=3518 --- CONTRACTS from the United States Department of Defense No. 594-07 FOR RELEASE AT May 16, 2007 Media Contact: (703) 697-5131/697-5132 Public/Industry(703) 428-0711 CONTRACTS DEFENSE LOGISTICS AGENCY [...] Science Applications International Corp., Fairfield, NJ., is being awarded a maximum $27,000,000 fixed price with economic price adjustment, indefinite delivery/indefinite quantity contract for maintenance, repair and operations supplies. Using services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. This proposal was web solicited with 7 responses. Contract funds will not expire at the end of the current fiscal year, exercise of 2nd one-year option. Date of performance completion is May 18, 2008. Contracting activity is Defense Supply Center Philadelphia, Philadelphia, Pa. (SPM500-04-D-BP08). [...] From saic at vision.moundalexis.com Thu May 24 16:07:11 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 24 May 2007 12:07:11 -0400 (EDT) Subject: [saic] SAIC Awarded it Services Contract to Support Alyeska Pipeline Service Company Message-ID: <20070524120703.C13243-100000@vision.moundalexis.com> 21 May 2007 ; PRNewswire SAIC Awarded it Services Contract to Support Alyeska Pipeline Service Company http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-21-2007/0004592328 --- SAN DIEGO and MCLEAN, Va., May 21 /PRNewswire-FirstCall/ -- Science Applications International Corporation [NYSE: SAI] announced today that it won a recompete contract to continue to provide information technology (IT) outsourcing services to Alyeska Pipeline Service Company. SAIC has provided these services since 2002. The single award, five-year fixed-unit-price contract is valued at $35 million. The contract contains two one-year options for recurring services for an estimated value of $14 million. If all options are exercised, the total value of the contract could reach $49 million. "Alyeska has had a productive business relationship with SAIC over the past five years. At the termination of the original contract, SAIC participated in a recompete for Alyeska's future services contract," said Erv Barnes, chief information officer for Alyeska. "They were challenged to provide even better service and support with cost efficiencies. This competitive process resulted in Alyeska and SAIC entering into a new contract for the next five years." Under the terms of the agreement, SAIC will provide IT services including local and wide area network support, security, application maintenance and enhancement, and cross functional services. SAIC also will support approximately 1,800 desktops and approximately 100 servers and multiple storage area networks. "SAIC is pleased to continue our long-term commitment to Alyeska to deliver high-quality IT outsourcing and technical services," said Doug Charles, SAIC senior vice president and manager of the Commercial Services Business Unit. "We have developed a strong relationship over the last five years, and we look forward to leveraging SAIC's upstream oil and gas industry knowledge and capabilities to help drive further value to their business." Services in Alaska will be performed in Anchorage, Fairbanks, Valdez, and along the 800 miles of the Trans-Alaskan Pipeline. From saic at vision.moundalexis.com Thu May 24 16:08:43 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 24 May 2007 12:08:43 -0400 (EDT) Subject: [saic] Simtrol Signs Reseller Agreement with SAIC to Support Digital Arraignment(tm) Solutions Message-ID: <20070524120835.F13243-100000@vision.moundalexis.com> 24 May 2007 ; Business Wire Simtrol Signs Reseller Agreement with SAIC to Support Digital Arraignment(tm) Solutions http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070521005430 --- NORCROSS, Ga.--(BUSINESS WIRE)--Simtrol, Inc. (OTCBB: SMRL), a leading provider of software solutions for device rich environments, has signed a valued-added reseller agreement with Science Applications International Corporation (NYSE: SAI) to provide and support the Company's Curiax Arraigner. software. The Curiax Arraigner system provides digital arraignment solutions to county, state and regional governments throughout the United States. "By working with SAIC, we hope to give our customers an attractive offering," said Rick Eaton, Senior Vice President of Sales, Simtrol. "SAIC has proven it has the capabilities to implement and service the government sector while helping streamline complex processes. We hope to leverage SAIC's experience to take advantage of opportunities at the state and local level." Simtrol's Curiax Arraigner software provides courtrooms, jails and police precincts an alternate way to deal with the dangerous and costly logistical problems associated with the transport of prisoners and the overcrowding of court dockets. By integrating multipoint videoconferencing, digital document management, digital signatures and evidence into a unified platform, the solution is designed to substantially reduce the time associated with transporting prisoners to and from court for arraignments, while helping to improve court security and lowering law enforcement costs. About Simtrol, Inc. Simtrol develops scalable software solutions that cost-effectively manage disparate devices in courtrooms, operating rooms, and boardrooms to achieve dramatically improved efficiency. Simtrol's solutions are sold directly and through professional system integrators, value-added resellers (VARs) and other distributors who are supported by the Company's sales and technical support staff. For more information about Simtrol, please visit www.simtrol.com. From saic at vision.moundalexis.com Thu May 24 16:09:28 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 24 May 2007 12:09:28 -0400 (EDT) Subject: [saic] SAIC Schedules First Quarter FY2008 Earnings Release and Conference Call Message-ID: <20070524120844.F13243-100000@vision.moundalexis.com> 24 May 2007 ; PRNewswire SAIC Schedules First Quarter FY2008 Earnings Release and Conference Call http://sev.prnewswire.com/computer-electronics/20070523/CLW10423052007-1.html --- SAN DIEGO and McLEAN, Va., May 23 /PRNewswire-FirstCall/ -- SAIC, Inc. (NYSE: SAI) will issue its first quarter fiscal year 2008 earnings press release after close of market Wednesday, June 6, 2007. Management will discuss the first quarter's financial results in a conference call beginning at 5 p.m. Eastern time. The conference call will be Webcast live on SAIC's public Web site (http://www.saic.com/). An archived version of the conference call, along with the financial results news release, also will be available on the Web site. SAIC is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. With more than 44,000 employees in over 150 cities worldwide, SAIC engineers and scientists solve complex technical challenges requiring innovative solutions for customers' mission-critical functions. SAIC had annual revenues of $8.3 billion for its fiscal year ended January 31, 2007. From saic at vision.moundalexis.com Thu May 24 21:33:47 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 24 May 2007 17:33:47 -0400 (EDT) Subject: [saic] Contracts for 5/24/2007 Message-ID: <20070524173341.E13243-100000@vision.moundalexis.com> 24 May 2007 ; United States Department of Defense Contracts for 5/24/2007 http://www.defenselink.mil/contracts/contract.aspx?contractid=3524 --- CONTRACTS from the United States Department of Defense No. 636-07 FOR RELEASE AT May 24, 2007 Media Contact: (703) 697-5131/697-5132 Public/Industry(703) 428-0711 CONTRACTS [...] NAVY [...] Science Applications International Corp., San Diego, Calif., is being awarded a $10,438,103 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee contract for research and development, test and evaluation in environmental technology and engineering, marine science, chemistry, biological science, information technology and management, advanced sensor development, environmental platform systems, decision support systems and ocean/harbor/coastal surveillance in support of the Advanced Systems and Applied Sciences Division. This contract is one of two contracts awarded: both awardees will compete for task orders during the ordering period.This three-year contract includes one two-year option, which, if exercised, will bring the potential, cumulative value of the contract to $17,969,822. Work will be performed in San Diego, Calif., and is expected to be completed May 2010. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via publication on the Federal Business Opportunities website and posting to the Space and Naval Warfare Systems e-Commerce Central website, with two offers received. The Space and Naval Warfare Systems Center, San Diego, Calif., is the contracting activity (N66001-07-D-0091). [...] From saic at vision.moundalexis.com Tue May 29 11:24:53 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 29 May 2007 07:24:53 -0400 (EDT) Subject: [saic] SAIC founder isn't done yet Message-ID: <20070529072442.I13243-100000@vision.moundalexis.com> 29 May 2007 ; San Diego Union-Tribune SAIC founder isn't done yet http://www.signonsandiego.com/news/business/20070529-9999-1b29beyster.html --- Ex-CEO greeted warmly at event at Salk Institute By Bruce V. Bigelow UNION-TRIBUNE STAFF WRITER La Jolla has always provided a safe harbor for J. Robert Beyster. The onetime nuclear scientist got a standing ovation last week at the Salk Institute, as he rose to talk about SAIC, the company he started 38 years ago in a small office with a sweet view of La Jolla Cove. Last month, his admirers gathered at Warwick's bookstore as Beyster and co-author Peter Economy signed copies of their book, "The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company." Beyster, who turns 83 next month, has been embraced in recent months by the San Diego community that includes his family, friends and former employees. As a sailing enthusiast, Beyster undoubtedly appreciates the comfort of a safe port -- and the waters beyond San Diego haven't been all that smooth. Just weeks before "The SAIC Solution" was released, two Pulitzer Prize-winning journalists battered Beyster and SAIC in an article published in Vanity Fair. Or "Vanity Unfair," as Beyster calls it. In a story laden with sinister overtones, Donald Barlett and James Steele exhume SAIC's "colossal failures" over the past 38 years as "the largest government contractor you've never heard of." In a recent interview, Beyster repudiated the accusations, both general and personal, that were raised in the article. A more painful bruise, though, apparently stems from the boardroom intrigue that preceded Beyster's 2004 ouster from the business he founded, the company also known as Science Applications International Corp. Beyster, who has made more public appearances in the past few months than he did in 35 years as SAIC's chairman and chief executive, only hinted of the behind-the-scenes battle that ended his reign. He said during his appearance Wednesday that he did not think SAIC needed to become a public company. That change occurred in October with an initial stock offering pushed by Ken Dahlberg, who replaced Beyster as SAIC's chairman and chief executive. Asked what advice he might offer today to a startup technology company, Beyster emphasized the importance of selecting the right people to serve as board members and to be sure to know how directors are going to vote. "Self-interest crops up every now and then," Beyster said. He explained that after Congress passed the Sarbanes-Oxley Act in 2002, SAIC's board members began worrying "they would be on the hook if anything went wrong." The legislation, passed after the Enron debacle, aimed to reform corporate governance by assigning oversight responsibilities more clearly to board members. "I thought we'd be OK," Beyster said. Other directors, however, apparently argued that operating SAIC as a public company would provide greater protection for board members' personal liability. "Some board members agreed with me," Beyster said. "But most did not." Beyster's appearance at the Salk Institute was sponsored by the San Diego chapter of the MIT Enterprise Forum and Connect. His voice was steady, but soft, throughout a nearly two-hour panel discussion. Beyster had said earlier that his health has been "fine," although he walks with an air of frailty. He said he signed copies of his book for more than five hours during a book signing last month in Virginia. Beyster told the audience he founded SAIC in 1969 "because I wanted to create a good place to work. I really wasn't interested in making money." Within the first year, Beyster's ownership of the company went from 100 percent to less than 10 percent. For most of his tenure, Beyster's stake in the company he founded was less than 2 percent. Beyster used the stock he divested to recruit prominent scientists -- offering them shares that represented a substantial ownership stake in the company. Many of them already were conducting research for the government, and they brought their contracts with them when they joined Beyster at SAIC. Such moves enabled the company to grow rapidly, and post an annual profit every year since it was founded. Gene Ray, who left SAIC to start San Diego's Titan Corp., said 27 of SAIC's employees had doctorates when he joined SAIC as its 32nd employee. "I had to take a cut in what I was getting paid by the government to come work for SAIC," said Ray, who appeared with Beyster in a panel discussion about the company. "But I was getting paid within $500 of what Bob was getting." Beyster's approach to employee ownership offered long-term benefits. As moderator Scott Horsley observed, an investment of $100 in SAIC shares when the company was founded in 1969 would be worth more than $3.5 million today. The generosity of Beyster's share-the-wealth philosophy puts him at odds with most American capitalists. He told the audience that executive pay in corporate America "is totally out of control." In response to a question about executive compensation, Beyster questioned people who make "billions of dollars" a year. "I don't understand how they can spend it," he said. "They're going to end up giving it to charity anyway. It would've been better if they had shared the wealth with the people who helped the company succeed." Beyster's anti-capitalist tendencies also were evident in the unusual steps he took during SAIC's early years to avoid venture capital funding. He arranged critical financing through a $3 million loan from Bank of America at a time when the company's worth was at most $3 million. "I had observed VCs around town," Beyster said of the venture capitalists that now finance most of America's technology companies. "And I had not detected any that were particularly patient." Beyster's decentralized system of employee-ownership also allowed the company's senior scientists and engineers to operate relatively freely, as long as they met certain business goals, such as winning new contracts. As a result, the company operated like a commune within a fortress, because so much of SAIC's business involved classified work for the Pentagon and national intelligence agencies. The personality that loomed largest in this Cold War collective was Beyster, the founding chairman and CEO. It was his fervor for solving critical problems of national importance, his sense of patriotism and his disdain for publicity that permeated SAIC's corporate culture. Beyster hinted of his inner zeal when he was asked about the Cold War hysteria that gripped the country during the 1950s, when he worked on the development of the hydrogen bomb at the Los Alamos National Laboratory. "It didn't affect me," Beyster said. But did the political upheavals shape his views about working on classified programs? "No, I liked it," he said. "The problems were exciting and if you didn't have classified access, you really couldn't work. . . . You weren't able to make a contribution unless you had total access." After decades of such work, Beyster remains relatively unknown -- though SAIC now generates nearly $8 billion in revenue as one of the nation's largest government contractors. He is revered most by people like William Proffer, who has worked for 13 years at SAIC as a computer scientist. At the Warwick's book-signing last month in La Jolla, Proffer waited in line nearly an hour for Beyster to sign two copies of "The SAIC Solution." Proffer told Beyster that one copy was for himself and the other was for his son, whose private schooling was paid mostly by the stock options Proffer got during his years at SAIC. From saic at vision.moundalexis.com Tue May 29 11:27:47 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 29 May 2007 07:27:47 -0400 (EDT) Subject: [saic] More Texas counties ditching state-OK'd voting system Message-ID: <20070529072734.C13243-100000@vision.moundalexis.com> 29 May 2007 ; Houston Chronicle More Texas counties ditching state-OK'd voting system http://www.chron.com/disp/story.mpl/politics/4842517.html --- Two more counties drop it in wake of election woes and others may follow By HELEN ERIKSEN and HARVEY RICE --- TALE OF TWO VENDORS Science Applications International Corp./VOTEC * Headquarters: Both in San Diego * Bid: $13.1 million * Received more points from a vendor evaluation team than did IBM/Hart-InterCivic * Proposed the VOTEC Election Management and Compliance System product from VOTEC as basis of the state system * Recommended by vendor evaluators to build TEAM IBM/Hart-InterCivic * Headquarters: IBM in Armonk, N.Y., and Hart-InterCivic in Austin * Bid: $13.9 million * Ranked higher than SAIC/VOTEC by five out of eight members of a vendor evaluation team * Proposed modifying Hart-InterCivic's commercial off-the-shelf product to work on a statewide level --- More Texas counties are abandoning a centralized voting records system after experiencing difficulties in the May 12 election, as the state struggles to get it running smoothly. Critics of the system, known as Texas Election Administration Management, or TEAM, say former Texas Secretary of State Geoffrey Connor made a mistake by accepting the higher of two final bids for an unproven system. Connor says the critics are wrong. "I remain confident that we made the best decision we could at the time with the information that was available," Connor said. Enacted in response to allegations of fraud during the 2000 presidential election, the Help America Vote Act of 2002 requires that states have an interactive centralized list in which election workers can easily determine whether a person is eligible to vote and to prevent citizens from being registered in more than one location. Two counties, Hidalgo and Tarrant, recently confirmed they were leaving TEAM to contract with VOTEC, the vendor that Connor rejected in a close contest. The defections raise the number of counties abandoning TEAM to five, and others are considering a similar move. Connor chose a $13.9 million bid from IBM and Austin-based Hart InterCivic instead of a $13.1 million bid by Science Applications International Corp. and VOTEC. Connor said the bids were not the only factors he took into consideration in the decision he made in 2004, nor was he obligated to go with the lowest bidder. He said states across the nation were in the same predicament as Texas in being compelled to deal with technology that had not been tested to comply with a new federal law. Some states modified existing statewide systems while others built new ones. "It wasn't just about the money, it was about selecting the best product," Connor said. "It was about technology, innovation and leadership." But Connor's recollection of events puts him at odds with one of his strongest critics, Harris County Tax Assessor-Collector Paul Bettencourt. "If it's his discretion, he made a poor choice," Bettencourt said. Bettencourt blames Connor, saying he passed over the low bidder with a proven system already in use by Harris County for a proposal from a bidder lacking experience in voter registration systems. Slow TEAM TEAM, used only in the state of Texas, is designed to allow counties to add voter registration information to a centralized data base via the Internet. The TEAM system spurred complaints from voter registration officials soon after it went online in January. Officials complained TEAM's slowness made preparation for the May 12 election difficult and that subsequent improvements have not solved the problems. They said flaws in the system caused it to kick voters' names off the lists and forced voters to wait in line up to 10 minutes while the system verified eligibility. Teresa R. Navarro, Hidalgo County elections administrator, said the county's Commissioners' Court voted this month to ditch TEAM and purchase the VOTEC system for $215,000. Tarrant County Commissioners' Court also voted this month to purchase a VOTEC system for $594,000. The state pays for TEAM but counties that use an alternative system must pay their own way. Connor contends his decision to award the contract to IBM and voting-machine maker Hart InterCivic was the best choice for a centralized system to comply with the Help America Vote Act of 2002. Problems foreseen The top three reasons listed on the state's vendor selection report for Connor choosing IBM-Hart over SAIC-VOTEC were that IBM provided a true statewide application; a better understanding of security; and an easy system to learn. Harris, Texas' largest county and a VOTEC user, and 27 other counties foresaw problems with an unproven system and chose not to join TEAM. Their predictions of trouble proved correct when TEAM went online in January. Unresolved problems left at least 17 jurisdictions without up-to-date lists of voters for use at polling places for the May 12 election, the Secretary of State's Office said. After experiencing problems with TEAM this year, three counties -- Bastrop, Kerr and Rockwall -- left TEAM and signed contracts with county-based systems. Counties that opt out of TEAM are required to update voter registration in the state system daily. Panel chose other vendor The eight-member group that evaluated vendors vying to build TEAM had representatives from Harris, Victoria and Dallas counties and five staff from Connor's office. They graded each vendor on the way it solved voter registration tasks, company information and pricing. IBM Hart and SAIC-VOTEC emerged as the front-runners from among the five vendors invited to make presentations. Five out of eight members gave the IBM-Hart team a higher individual score, but when all the points were tallied, the SAIC-VOTEC team had a higher combined score, according to Scott Haywood, spokesman for Secretary of State Roger Williams. 'A close call' "It was a close call; it could have easily gone either way," Connor said. Victoria County elections administrator George Matthews was in the group that evaluated the vendors. He said members came to a consensus to offer the contract to VOTEC but pointed out that IBM-Hart scored well, too. "We didn't have a problem offering it to either company," Matthews said. "In reality, VOTEC had more experience in election management systems, which is important to my job." Bettencourt said he was surprised to learn that after the committee recommended VOTEC, Connor wanted a second presentation by the bidders to his office. Bettencourt said it was his understanding that the committee was making the final decision. Connor says the committee's opinion was advisory. Connor said he took the second presentation and the committee's evaluations along with other factors into consideration before choosing IBM-Hart. "This was new, and sure there was a little trepidation," Connor said. "All the finalists were good quality vendors with good expertise." VOTEC woes elsewhere VOTEC's voting systems have not been trouble-free in other states. The Denver Post reported in February that a VOTEC glitch caused postcards to be sent to 22,000 Jefferson County voters in Colorado telling them that they didn't vote in the November election, when in fact they did. County officials said they would ask VOTEC for reimbursement for sending the erroneous postcards as part of a voter-roll cleanup. Despite the problems with TEAM, Haywood said the state has not decided to dump it. He said the state's focus is on evaluating TEAM's performance during the May 12 election and making improvements. Connor said it is too early to tell whether the counties that have switched to VOTEC made a good decision. "They may not be happy with this system either," he said. From saic at vision.moundalexis.com Wed May 30 21:35:30 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 30 May 2007 17:35:30 -0400 (EDT) Subject: [saic] U.S. Army's 'Future Combat Systems' Program Remains Under Fire Message-ID: <20070530173517.T13243-100000@vision.moundalexis.com> 30 May 2007 ; World Politics Review U.S. Army's 'Future Combat Systems' Program Remains Under Fire http://www.worldpoliticsreview.com/article.aspx?id=807 --- BY Richard Mullen WASHINGTON -- The U.S. Army's Future Combat Systems [1] (FCS) program, under new pressure from congressional budget-cutters, continues to draw criticism that its underlying concept is flawed. The massive, ambitious FCS program would unite a large number of Army vehicles and weapons systems through a common computerized network, in theory allowing for better interoperability and coordination of troops in the field. The problem: "The whole concept doesn't work," according to Winslow Wheeler, a defense analyst at the Center for Defense Information [2] in Washington. The Army heartily disagrees with this viewpoint, as does The Boeing Co., which is one of two main contractors to the Army on the FCS program. The FCS program is on track, and it promises to improve military capabilities in multiple ways, according to an Army press briefing reported by the American Forces Press Service. In that briefing, an Army spokesman attacked proposed congressional cuts in the Army's fiscal 2008 request [3] (pdf file) for FCS, saying that the cuts would cripple or eliminate parts of the program. He was reacting to the move by the House Armed Services Committee [4] to cut the Army's fiscal 2008 request of $3.7 billion for FCS by $867 million. The committee defended the cuts as necessary in order to fund more immediate needs of troops in the field. FCS "will enable unprecedented levels of joint interoperability, shared situational awareness, and the ability to execute highly synchronized mission operations," according to Boeing, which is acting as partner with Science Applications International Corporation (SAIC) to develop FCS for the Army. Leading subcontractors to the Boeing-SAIC team include General Dynamics Corp., BAE Systems, and a who's-who of leading defense industry companies. Boeing describes FCS as a "system of systems" that would "link soldiers to a wide range of weapons, sensors, and information systems by means of a mobile ad hoc network architecture," which would govern battle command software; tactical and strategic communications; and intelligence, surveillance and reconnaissance (ISR) sensors. The subsystems within FCS would include ground sensors, non-line-of-sight missiles, cannons, and mortars, unmanned aerial vehicles, infantry carrier vehicles, command and control vehicles, and more. 'Look at Iraq' But FCS still doesn't add up, according to Wheeler, who noted that the program's total price tag, originally $92 billion, now is projected to soar past $200 billion (an estimate reportedly in agreement with the Office of the Secretary of Defense). Moreover, "the classic phase for major cost overruns has not even begun," Wheeler said in a statement. "Doubling the cost has resulted in a smaller number [of FCS components] to be bought, but worse still is that the whole concept is proving itself in Iraq to be an abject failure," he said. The concept of FCS is "to identify where our forces are, and where the enemy is, and for us to zap them at a distance beyond [their] range. For that reason, we can have medium- and lightly armored vehicles," Wheeler told World Politics Review. But, "Look at Iraq. Our systems now can't tell us where the enemy is," he said. "In terms of the work we're doing in Iraq, [the FCS approach is] no help at all. The concept is foolish," Wheeler said. He also charged that the FCS program "is doing the standard thing for highly complex modern programs: it's way over budget and behind schedule." Other defense analysts strongly disagreed with Wheeler. "Unlike many other weapons programs, the Future Combat System is not over budget or behind schedule," according to Loren Thompson, defense analyst at the Lexington Institute [5], based in Arlington, Va. "Boeing has kept the program on track and generated a viable networking architecture," he said in response to email questions from World Politics Review. "It is important to keep in mind that FCS is an entire family of ground and air vehicles tied together by the most sophisticated battlefield network ever devised. Its high cost is partly a reflection of the advanced technology being used, and partly a reflection of the very large amount of equipment that will be bought. FCS will eventually replace over a third of the Army's force structure, and become the centerpiece of force modernization," Thompson said. He also defended the program's cost. "While its price tag is quite imposing, the total acquisition cost for FCS is less than two years of Army spending at current rates. In return, it will deliver three decades' worth of fighting capability. That doesn't sound like such a bad bargain to me," Thompson said. Thompson also challenged the notion that FCS is proving itself a failure in Iraq. "It is not accurate to say that FCS has failed to produce results in Iraq, because no element of the program has been deployed with forces there," Thompson said. While conceding that FCS is not yet deployed in Iraq per se -- the "fully integrated [FCS] 'future force'" won't arrive until 2014, according to Boeing -- Wheeler maintained that "prototype systems of FCS are deployed in Iraq." The FCS premise of networking disparate battlefield elements "relies on a concept of warfare that doesn't exist: conventional warfare where it's easy to know where the enemy is," Wheeler said. "The whole concept has fallen flat on its face." 'Learning Curve' While defending the FCS program's "viable networking architecture," Thompson noted that "FCS faces two problems in the near term. "First, it is not particularly responsive to the threats the U.S. faces in Iraq," Thompson said. "Second, it does not have a political constituency capable of sustaining it that is proportional to the amount of money required. These two problems increase the likelihood it will become a bill-payer for more immediate needs" -- an observation consistent with the recent budget-cutting decision by the House Armed Services Committee. The Government Accountability Office has predicted [6] (pdf file) budgetary problems for FCS based on the program's sheer complexity. "FCS is at significant risk for not delivering required capability within budgeted resources," the GAO said in congressional testimony in 2004. "Three-fourths of [the FCS program's] needed technologies were still immature when the program started. . . . Because it is promising to deliver unprecedented performance capabilities to the warfighter community, the Army has little choice but to meet every high standard and has limited flexibility in cutting FCS requirements." But it is not the fault of the FCS program that "requirements have changed," noted James Carafano, senior fellow at the Heritage Foundation [7], a Washington think tank. In assessing FCS, he said, it is important to consider that the program's original requirements were "not well defined," and "timelines [were] not realistic." "We're going through a learning curve" with respect to FCS, Carafano told World Politics Review. "Some of it will work, some of it won't work. It's like making sausage: you don't want to look at it too closely." As FCS reaches the full deployment stage, the program will not look like it was envisioned to look like at the beginning, Carafano said. "I'm okay with that," he said. Defense acquisition is not directly comparable to private business enterprise, where efficiency and profit are the gauges of success, he noted. In the case of a program such as FCS, "The 'profit' is keeping the nation secure." Said Carafano: "I would not write FCS off. I'd call it a work in progress." Richard Mullen is a Washington-based journalist who has covered national defense issues for Defense Today, New Technology Week and other publications. --- [1] http://www.army.mil/fcs/ [2] http://www.cdi.org/ [3] http://www.asafm.army.mil/budget/fybm/fy08-09/overview.pdf [4] http://armedservices.house.gov/ [5] http://www.lexingtoninstitute.org/ [6] http://www.gao.gov/new.items/d07672t.pdf [7] http://www.heritage.org/