CSC Secures NITAAC Contract - Analyst Blog


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Computer Sciences Corporation ( CSC ) recently announced that it has secured a place among the 54 companies, which have been selected for an information technology (IT) services solutions contract by the National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC).

The contract spans for 10 years and is estimated at $20 billion. The contract was signed in the first quarter of CSC's fiscal year 2013.

The company has a long standing relationship of over 15 years with National Institutes of Health, and has provided world-class solutions to the federal agencies. As per the terms of this agreement, the company will offer its service solutions to different federal, civilian and defense verticals, in order to enhance their IT requirements.

Last month, Computer Sciences also won two similar contracts. The company's Enterprise Scheduling solution (a healthcare suite) was chosen by a Singapore-based multi-disciplinary hospital, Tan Tock Seng Hospital.

Apart from this, Computer Sciences also won a multi-year contract extension from Safety Insurance Group for an undisclosed sum.

Moreover, a change in the healthcare system is coming from the increasing use of IT on the ground level, which includes the meaningful use of electronic health records (EHR), The company is also playing a major role in enhancing the cloud based EHR solution.

The company is an old vendor of the U.S. government and has some existing contracts with some government agencies. Moreover, the time taken to secure a new government contract is substantial, as the government's decision-making process is tedious.

Deal wins act as catalysts for any company and Computer Sciences has no dearth of them. But the growing uncertainty regarding the European economy, intense competition in the IT and cloud computing space from both small and big players such as Accenture plc ( ACN ) and Hewlett-Packard Company ( HPQ ), and strained federal budgets have prompted our bearish outlook on the stock.

Currently, CSC holds a Zacks #4 Rank (implying a short-term Sell rating).

ACCENTURE PLC (ACN): Free Stock Analysis Report
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HEWLETT PACKARD (HPQ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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