CGI Federal is the U.S. Government-focused subsidiary of CGI Group, a global IT and business consulting firm headquartered in Montréal, Canada. CGI Federal provides support in advanced engineering and technology, application management, business process management, systems integration and consulting, and technology management.
What is CGI Federal?
CGI Federal employs approximately 7,000 personnel, with offices located across the United States. Its parent company, by comparison, employs 76,000 personnel, with 400 offices located worldwide.
According to Washington Technology’s Top 100 list, CGI Federal earned $1 billion in prime federal contract obligations in FY2020. By comparison, CGI Group generated approximately USD $9.6 billion in revenue in FY2020 (CAD $12.16 billion).
CGI Federal’s work is clearly a small portion of the CGI Group’s overall business. However, CGI Federal can easily enhance their qualifications by leveraging CGI Group’s worldwide corporate capabilities and global commercial IT work.
The CGI Federal of today was greatly shaped by CGI Group’s acquisitions. The first noteworthy acquisition of American Management Systems (AMS) in 2004 created a robust foundation and the foundation of their successful Momentum® business (discussed later). The defense and intelligence portion of AMS’ business was sold to CACI, while the company’s federal civilian work was sold to CGI.
In 2010, CGI Federal’s business doubled in size, gaining entry into the defense market, through its acquisition of the systems integrator, Stanley Inc. From this acquisition, CGI Federal additionally inherited large-scale work providing passport production services to the U.S. Department of State (DoS).
Most recently, in March 2020, CGI announced its acquisition of TeraThink, an IT and management consulting firm. The acquisition aims to strengthen CGI Federal’s consulting expertise and expand its enterprise application development and management services. Other acquisitions have been made to quietly transform this business into the CGI Federal we know today.
Core federal customers
CGI Federal makes the majority of its revenue in the federal civilian space. The company maintains a steady footprint at CMS despite the criticism it faced for its work on the HealthCare.gov website. Since completing work on the website in 2014, the company’s CMS sales decreased from $129 million in FY2014 to approximately $90 million in subsequent years. However, in FY2020, CGI Federal’s CMS sales increased to $144 million. These figures demonstrate that CGI Federal successfully avoided long-lasting stigma from the HealthCare.gov rollout and maintains a significant working relationship with CMS.
CGI Federal provides federal civilian customers with a range of services, such as software support, cloud and applications services, cybersecurity support, and other businesses services centered on their federal Enterprise Resource Planning (ERP) solution called Momentum®. Select contracts demonstrating the variety of CGI Federal’s work includes:
- U.S. Agency for International Development (USAID), Hybrid Cloud Migration Support – In April 2017, CGI Federal was awarded a 5-year, $79 million ceiling value contract to help USAID implement a new, hybrid cloud computing environment. According to CGI, USAID did not suffer a single unplanned outage of an application during the migration. CGI Federal has been obligated $63 million thus far.
- U.S. Department of Agriculture (USDA), Cloud-Based Financial Shared Services Contract — In July 2016, CGI Federal was awarded this 10-year, $824 million ceiling value contract to provide cloud hosting, operations, maintenance and reporting services under the USDA’s financial management shared services program, which supports more than 85 federal agencies. CGI Federal leverages their Momentum solution to help these agencies manage their budget, financial and procurement functions. CGI Federal has been obligated $126 million thus far.
- U.S. Department of Homeland Security, Continuous Diagnostics and Mitigation (CDM) Dynamic and Evolving Federal Enterprise Network Defense (DEFEND) Program, Groups C and F — CGI Federal holds two out of the six CDM DEFEND contracts. The company was awarded the $530 million ceiling value contract for Group C agencies in July 2018 and the $267 million ceiling value contract for Group F agencies in April 2020. On these contracts, CGI Federal delivers CDM cybersecurity products to numerous federal agencies, aiming to strengthen their overall cybersecurity posture and improve visibility and insight into their cyber vulnerabilities.
Corporate capability highlight: Momentum®
One of CGI Federal’s most significant corporate capabilities is their Momentum® solution. Momentum® is CGI Federal’s financial, acquisition, and budgeting solution that was specifically developed for the federal government. It has been utilized by more than 190 federal agencies, including over half of the intelligence community. A recent use case includes the announcement of Momentum’s rollout at the U.S. Department of the Veterans Affairs (VA) this month.
FedSavvy Strategies Takeaway
- CGI Group’s federal business is small in comparison to their other work. However, CGI Federal has the benefit of leveraging the capabilities of the CGI Group, which has a global footprint and a large commercial IT portfolio.
- CGI Federal’s largest foothold in the federal market continues to be in the federal civilian space, underpinned by its work at CMS and DoS.
- CGI Federal continues to be successful in selling its Momentum® solution to a wide range of federal government agencies, highlighting their expertise in ERP solutions and business process.
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