It has been nearly two years since the birth of Perspecta, which came about from the merger between Vencore, DXC Technology U.S. Public Sector and KeyPoint Government Solutions in June 2018. That same month, we wrote a blog outlining our take on the newly formed company and its potential impact on the competitive landscape in GOVCON.
Over the course of its existence, Perspecta has had time to integrate the three companies. In that short window, it has experienced a somewhat volatile existence, suffering both impactful recompete losses and netting some significant wins. With major changes to its federal portfolio, we found now to be as appropriate a time as ever to revisit Perspecta with a fresh FedSavvy take.
Significant Losses
Perspecta’s initial two years had some significant losses.
- From DXC, Perspecta inherited the NASA Agency Consolidated End-User Services (ACES) In February 2019 it lost the massive 10-year, potential $2.9 billion ACES recompete, now called NASA End-User Services & Technologies NEST, to Leidos. In May 2019, the GAO denied Perspecta’s protest, solidifying the takeaway win for Leidos.
- Through legacy HP Enterprise Services, Perspecta inherited the five-year, $3.5 billion Next Generation Enterprise Network (NGEN) contract providing end-to-end IT services to operate the U.S. Navy-Marine Corps Intranet (NMCI). Under the latest iteration of NGEN, NGEN-R, the Navy split the contract into two components, neither of which were initially re-awarded to Perspecta. In February 2020, Leidos was given the 10-year, $7.7 billion Service Management, Integration and Transport (SMIT), while in the October 2019, HP won the potential $1.4 billion contract to upgrade hardware at 400,000 seats. It’s worth noting that Perspecta is weighing its options to protest the outcome of the Leidos takeaway on NGEN-R SMIT, so there is still time for the GAO to reverse the decision on SMIT.
Enduring Classified Footprint
Through legacy Vencore, Perspecta is well-entrenched in the Intelligence Community (IC). In 2019, the company continued to make headway in the classified space including:
- Scoring a seat on the $17.1 billion Defense Intelligence Agency (DIA) Solutions for Intelligence Analysis 3 (SIA 3) IDIQ.
- Winning an $824 million contract to perform full life cycle systems engineering and integration work for the National Geospatial-Intelligence Agency (NGA).
Perspecta also inherited Vencore’s work supporting cyberspace operations within the Department of Defense (DoD), supporting Army and Air Force classified networks and providing cyberspace operations support for USCYBERCOM. In 2019, the company continued to expand its footprint in this space.
- In February 2019, Perspecta won a five-year, potential $906 million contract to provide comprehensive cyberspace operations support to U.S. Army Cyber Command.
- In August 2019, the U.S. Air Force awarded the company the five-year, $162 million Secret Internet Protocol Router Network (SIPRNet) Enterprise Modernization
- In October 2019, Perspecta Labs (legacy Vencore Labs) received a $25 million task order from the U.S. Army as a partner in their cybersecurity Collaborative Research Alliance (CRA) program to help strengthen cyber resiliency of U.S. Army networks.
Re-defining wins in FEDCIV
Although they continued to gain momentum with classified work throughout 2019, Perspecta began 2020 by making waves with some new customers in the FEDCIV space.
- In January 2020, Perspecta was awarded a seven-year, potential $810 million U.S. Department of State Consular Affairs Enterprise Infrastructure Operations (CAEIO) With barely any prior work at DoS, one might regard the CAEIO win as ‘transformational’ for Perspecta.
- Perspecta won another new FEDCIV customer in January 2020 winning a contract with the U.S. Department of Labor (DoL). The seven-year, $277 million program will provide enterprise IT operations and management support more than 4,000 users at DoL office headquarters and 16,000 end users throughout the United States.
A Changing Customer Base
With their NASA work diminishing and the potential loss of their absolute largest contract with the U.S. Navy, pending protest, Perspecta’s customer base is clearly changing.
The graphic below offers a side-by-side comparison of how we project Perspecta’s main customer-base to transform; from its infancy in 2018 to 2021 in the aftermath of contract changes.
Significant losses and some major wins will change the customer mix for Perspecta in the years to come
What’s next for Perspecta?
- A changing customer base may prompt Perspecta to shift its focus to finding work within FEDCIV. In June 2019, the company hired Rocky Thurston to manage its Civilian, State and Local Group, the business unit responsible for the 2020 wins at the Departments of State and Labor. Thurston helped grow cybersecurity, analytics and software infrastructure businesses at AT&T, Wyle, Lockheed Martin, and Booz Allen Hamilton.
- The company will look to leverage its August 2019 acquisition of Knight Point Systems to accelerate growth as it onboards Knight Point’s cloud, cyber, digital transformation, and enterprise IT offerings.
- Perspecta cyberspace support within DoD has persisted, and the $906 million ARCYBER win only strengthens its position within this domain. The company continues to refine its cyber capabilities through Perspecta Labs. This is a unique R&D capability for emerging cybersecurity product development and methodology.
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