) recently won a five-year contract from the U.S. National
Science Foundation ('NSF') worth $24.4 million. The government
department has chosen Accenture Federal Services to support the
agency's financial accounting system.
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The NSF was formed to provide funds to support fundamental
research and education in the fields of science, health and
defense. The agency provides financial support to national
universities and colleges for conducting researches for the U.S.
government, which are used in formulating federal decisions.
Per the terms, Accenture will deploy its cloud-based 'Federal
Financials as a Service' suite to help transform the agency's
25-year old legacy system to a more user-friendly shared services
platform. This will boost the NSF's ability to streamline
operations across various departments efficiently, better manage
funds and promote scientific research nationwide.
Accenture has become a popular choice for the federal agencies.
Last month, Accenture plc won 2 three-year contracts from the
U.S. Department of Navy at an aggregate value of $30.0 million.
Under the first contract, Accenture would review the business
processes and internal controls at Naval Air Systems Command,
Naval Sea Systems Command, the Navy's Assistant for
Administration, Field Support Activity, Office of Naval Research,
Naval Research Laboratory and the Marine Corps. The review will
help the naval agency to accelerate audit functions, which will
ultimately lead to improved operations across the department.
Per the second contract, Accenture will support the department in
the smooth running of its Navy Enterprise Resource Planning
('ERP') system. For this, Accenture will monitor the computer
systems and automated business processes required for the ERP
system to be effective.
Back-to-back government contracts at the beginning of 2013 have
certainly ensured a good start for Accenture. The company has won
a series of government deals in the past. However, the lower
margin of the government contracts is something to worry about.
The federal budget is also a cause of concern. IT research firms,
) and IDC anticipate government spending on IT to decline in
2013. This could reduce the amount of deals and eventually put
pressure on Accenture.
However, we are positive on Accenture's wide industry exposure as
this could mitigate weakness from the fed sector.
Currently, Accenture has a Zacks Rank #3 (Hold). Investors may
also look into other technology stocks, which are better
positioned such as
) with a Zacks Rank #1 (Strong Buy) and
Computer Sciences Corp.
) with a Zacks Rank #2 (Buy).