General Dynamics Corporation
) unit, General Dynamics Information Technology ("GDIT"), has
received a 5-year task order, worth $42.2 million, from the
Federal Bureau of Investigation ("FBI"). The company has already
appointed more than 30 new employees in several locations to
support this task order.
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Per the agreement, the company will deliver information
technology ("IT") services to FBI's Computer Analysis Response
Team Storage Area Network ("CARTSAN") segment. General Dynamics
will deliver required infrastructure to CARTSAN to obtain,
develop and present hidden digital information. In addition, the
company will provide maintenance and administrative support to
the Computer Analysis Response Team - Forensic Analysis Unit for
its Forensic Networks Program and other forensic programs.
This task order was awarded under the FBI Information Technology
Supplies and Support Services contract ("FBI IT Triple S"). It is
an 8-year multiple-award, indefinite delivery and indefinite
quantity ("IDIQ") contract with total award-value of $30 billion
and was first awarded in October 2010.
Earlier, the company obtained three task orders under the IT
Triple S program to deliver information assurance and security
services, operate and maintain the Enterprise Management System
("EMS"), and support virtual server platforms and thin client
configurations in enterprise-wide FBI environments to the FBI.
General Dynamics' strong expertise to provide cost-effective and
innovative IT services, enables it to get contracts from the
several federal agencies on a regular basis. At the end of
third-quarter 2012, Information Systems and Technology segment's
total backlog was $10.1 billion compared with $9.3 billion in the
Post third-quarter 2012 earnings release, GDIT received numerous
orders. In November 2012, GDIT received a 5-year multiple-award
IDIQ contract from the Space and Naval Warfare Systems Center
("SSC") Atlantic to deliver the worldwide Command, Control,
Communications, Computers, Intelligence, Surveillance and
Reconnaissance and IT support to its European Office and its
Combatant Command and Unified Command customers. This agreement
had a potential value of $750 million to all five awardees, if
all options are applied.
We have identified several key growth drivers like improvement in
global jet business market, stability in U.S. military vehicles
demand, a backlog of $51.5 billion, an ongoing share repurchase
program and strong cash flow generation, which may fuel General
Dynamics' future financial performance.
However, we are skeptical about the company's over-reliance on
the U.S. government orders, and risks related to postponement and
cancellation of key projects. General Dynamics currently has a
short-term Zacks #3 Rank (Hold rating).
Falls Church, Virginia-based General Dynamics Corporation engages
in mission-critical information systems and technologies; land
and expeditionary combat vehicles, armaments and munitions;
shipbuilding and marine systems; and business aviation. The
company was the third largest U.S. defense contractor in terms of
revenue in fiscal 2011, after
The Boeing Company
Lockheed Martin Corporation