Another Contract For CGI's Stanley Unit To listen to the doom and gloom crowd you's swear Stanley was just another piece of garbage - a big waste of money, and CGI was just dumb to do it.
I'd like to challenge that assertion. I'd been a shareholder of Stanley since shortly after it went public a few years ago. When CGI bought us out at a nice premium, I did a little research on CGI and decided to put half my investment back into CGI (at $14 a share) until I got a better feel for its prospects.
It isn't easy to evaluate a company like Stanley due to the confidential nature of many of its services. Stanley is restricted from describing many of the services it provides because those services are classified by the customers ie, government, military, and intelligence agencies.
But one quick way to get an impression of a company's quality is to take a look at who is buying from it. When you see a long list of Airforce, Army, Navy, along with many governmental departments and various levels of intelligence CIA, Homeland Security, etc...all buying from Stanley, you know these guys must have something worthwhile to offer.
Many members of the company's staff come from the military and other customers Stanley provides services to and are trained and cleared to the higest levels of security. If we use the same approach for CGI itself we see a long list of high profile Canadian and U.S. companies, government agencies, and some military and intelligence stuff itself.
These people don't buy junk. IT services contracts tend to be given after a competition is held by the customer, and the provider offering the best service at a reasonable cost usually wins the award. If the customer feels he/she gets good value for the money they're likely to renew.
CGI and Stanley appear to have a pretty good rate of customers renewing their service contracts. That's an indication they're in touch with what the customer wants and how to price their services competitively.
Here's an article describing a recent contract win. Although this isn't a big contract, it's a typical small contract. CGI has won much larger contracts, but this one is a good example of the kind of deal that gets announced on a fairly regular basis.
CGI to Deliver Intelligence Surveillance Reconnaissance (ISR) and Information Operations (IO) Support to the Space and Naval Warfare Systems Command
Multiple-award US$77.78 million ceiling ID/IQ supports ocean surveillance systems
FAIRFAX, VIRGINIA--(Marketwire -03/30/12)- The
Space and Naval Warfare Systems Command (
SPAWAR) Systems Center Pacific (SSC Pacific) has awarded
CGI Federal Inc. (CGI), a wholly-owned U.S. operating subsidiary of
CGI Group Inc. (NYSE:
GIB -
News)(TSX: GIB.A), a prime position on the indefinite-delivery, indefinite-quantity (ID/IQ), multiple-award contract for
Intelligence Surveillance Reconnaissance (ISR) and Information Operations (IO) in support of ocean surveillance systems. The ID/IQ has a three-year base value of US$46.68 million as well as one, two-year option which brings the potential contract value to US$77.78 million. CGI is one of five awardees that will compete for task orders on the vehicle.
Under the vehicle, CGI will provide a range of services, including systems engineering, software development, research, and test & evaluation in support of software and hardware for emerging technologies, system security architecture, and Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) systems. "CGI is proud to support critical multi-service military intelligence missions through this new contract vehicle," said Amy Bleken, Senior Vice-President, CGI. "We have a long history of support to SPAWAR, so we look forward to building on our partnership to continuously improve service to the warfighter."
About CGI Federal Inc.
CGI Federal Inc. is a wholly-owned U.S. operating subsidiary of CGI Group Inc., dedicated to partnering with federal agencies to provide solutions for defense, civilian, and intelligence missions. Founded in 1976, CGI Group Inc. is one of the largest independent information technology and business process services firms in the world. CGI provides end-to-end IT and business process services to clients worldwide with approximately 31,000 professionals located in offices and centres of excellence in Canada, the United States, Europe and Asia Pacific. As at December 31, 2011, CGI's annualized revenue was approximately $4.1 billion and its order backlog was approximately $13.6 billion. CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are included in both the Dow Jones Sustainability Index and the FTSE4Good Index. Website: www.cgi.com/usfederal.