SAIC Takes Significant Loss In Wake of Contract Investigation

Government contractor SAIC Inc. which is headquartered in McLean, said Tuesday it slipped to a loss for the third quarter, hurt by  losses  related to a contract with New York City  and lower revenues, according to reports from several news reports.

The Washington Post reported: SAIC (Science Applications International Corp.) "said Tuesday that its third-quarter profit was wiped out by $232 million in anticipated losses relating to a contract with New York City that now figures in a criminal investigation."

The Post report continued: The U.S. Attorney’s Office for the Southern District of New York has alleged that “a massive and elaborate scheme to defraud the city” corrupted the program, and two former SAIC employees have been charged with receiving millions of dollars in kickbacks.

The Post also reported: In October, SAIC said it removed three top executives — Deborah Alderson, president of the company’s defense solutions group; John Lord, her deputy; and Peter Dube, general manager of the enterprise and mission solutions business — and began an internal review of CityTime, an employment timekeeping system that SAIC was under contract to manage.

At the time, the company said there was no evidence that any of the three departing executives were personally involved in the fraud.

The company’s chief executive, Walter P. Havenstein,announced this fall that he will depart next year, The Post reported.

SAIC said in its earning statement: "Our actions taken in the third quarter in connection with the CityTime situation, including taking the loss provision, were significant and appropriate. During this time, our employees have consistently remained focused on continuing to deliver operational excellence and new capabilities for our customers," Havenstein said.

Havenstein said in a call with investors Tuesday that the company saw encouraging results in the quarter, including an increased number of large contract victories and a greater number of awards in strategic growth areas, such as maintaining older military equipment, The Post said.

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