Long Time Gone

In Defense of SAIC

There is trouble on the horizon for SAIC and for many other Government Contractors. Here is why. When you consider that every tax dollar collected from people with incomes from $1.00/year to $100,000 per year goes to Government Contractors (Reference: FedWeekly.org), you can see that we are talking about an enormous amount of money. (I believe FedWeekly said it was 80% of the federal budget). Companies like SAIC are in the tradition of overrunning their contracts via expenses and handing the government an invoice for their overruns. I believe that Government Contract and Program fiscal accountability and oversight will be the Hallmark of either new administration in Washington. The Pentagon/Homeland Security vis a vi SAIC will not continue to have an $800 billion piece of tax payer revenues... that is just not going to happen. My belief is that SAIC is not a good long term bet for anyone's future portfolio. I still own some employee shares but I intend to sell. Additionally SAIC Management is under pressure to improve relations with their employees. The autocratic, quasi military management hierarchy within SAIC will need to change if SAIC seeks to retain any significant talent long term primarily because there is no career path within SAIC for a "contractor". A contractor comes in performs his function and moves on. SAIC is a "body shop" a waystation for some one that seeks experience before moving on to a long term position with another company where the future is not measured by the acquisition of the next government contract.