Contract Deobligations Alert — June 24, 2026

SAIC secured a $76.5M base NITES contract with GSA FEDSIM (cost-plus award fee, low risk) and a $77.6M VA IT operations delivery order, with combined option potential of $434.1M. Both were full-and-open competitive wins, reinforcing SAIC's position in federal IT modernization.

Network Designs won a $85.3M time-and-materials delivery order under the ITSS-5 program for EOIR, with options up to $95.2M through 2027. The SDVOSB set-aside provides competitive insulation and signals policy-driven demand for veteran-owned small businesses in DOJ IT.

Leidos secured a $167M time-and-materials delivery order from CMS to host over 300 business applications, with potential value of $217M through 2027. Full-and-open competition validates Leidos' competitive strength in federal health IT services.

Walsh Federal won a firm-fixed-price contract for an air traffic control tower in Grand Forks, ND, with 2.5-year performance through early 2029. Fixed-price construction contracts carry cost overrun risk, and Walsh Federal is not a small business, reducing set-aside advantages.

Only one of nine contracts is defense-related, with the remaining $761.5M from civilian agencies (HHS, NASA, VA, DOJ, GSA, DOT, State). Contracts awarded in Q4 are particularly vulnerable to continuing resolution disruptions, especially the 2026 awards to Walsh Federal and GDIT.

Walsh Federal's $74.4M firm-fixed-price FAA tower construction contract has high execution risk due to fixed-price structure and 2.5-year construction timeline. Cost overruns would directly impact margins.

QTC Medical Services (Leidos subsidiary) has a $93.6M VA contract with only $878K outlayed, indicating most revenue is contingent on future task orders. This creates revenue recognition uncertainty for Leidos.

Eight of nine contracts are civilian agency awards, making the portfolio vulnerable to continuing resolution impacts in Q4 2026. The 2026 awards to Walsh Federal ($74.4M) and GDIT ($73.2M) are particularly exposed.

Caltech's $107.7M NASA SPHEREx contract is cost-no-fee, meaning Caltech receives zero profit. This limits the contract's financial benefit despite the large award size, and $93.5M of $111M ceiling is already outlaid.

SAIC's NITES contract with GSA FEDSIM has options that could increase total value from $76.5M to $228.6M through 2031, with cost-plus award fee pricing providing stable margins. Option exercise would significantly boost SAIC's IT services backlog.

Leidos' $167M CMS hosting contract has options up to $217M through 2027, with only $126M outlaid as of data date. Continued CMS investment in healthcare IT modernization could drive additional task orders.

Network Designs' SDVOSB set-aside win at DOJ ($85.3M) and ZenPoint Solutions' 8(a) sole-source award at State ($74.4M) demonstrate policy-driven demand for small business contractors. These firms could see follow-on awards as agencies meet small business contracting goals.

Only 1 of 9 contracts is defense-related, suggesting potential upside for defense IT contractors as NDAA priorities drive DOD spending. SAIC and GDIT are well-positioned to capture DOD IT modernization contracts.

Five of nine contracts totaling $483.7M are for IT services at civilian agencies (HHS, VA, DOJ, GSA, State), indicating sustained investment in enterprise IT modernization across the federal civilian landscape. SAIC, Leidos, and GDIT are the primary beneficiaries.

Two contracts totaling $159.7M were awarded under set-aside programs (SDVOSB and 8(a)), demonstrating that policy preferences continue to channel federal dollars to small businesses. Network Designs and ZenPoint Solutions are direct beneficiaries.

Caltech's $107.7M SPHEREx contract through 2028 signals continued NASA investment in space-based scientific surveys, though the cost-no-fee structure limits financial upside for the contractor.

{"entity"=>"Science Applications International Corporation", "reason"=>"SAIC won two contracts totaling $159.1M base value with combined option potential of $434.1M, representing significant backlog growth. The NITES contract's cost-plus award fee structure provides margin stability.", "trigger"=>"Option exercise announcements for NITES and VA contracts in 2026-2027"}

{"entity"=>"Leidos, Inc.", "reason"=>"Leidos won the largest single contract ($167M CMS hosting) and has a subsidiary (QTC Medical) with a $93.6M VA contract showing minimal outlay, creating revenue recognition uncertainty.", "trigger"=>"CMS option exercise decisions in 2025-2026; QTC Medical outlay acceleration"}

{"entity"=>"Network Designs, Inc.", "reason"=>"SDVOSB set-aside win at DOJ provides competitive insulation; follow-on awards could drive significant revenue growth for this small business.", "trigger"=>"DOJ ITSS-5 re-compete; option year exercises through 2027"}

{"entity"=>"Walsh Federal LLC", "reason"=>"High execution risk on $74.4M fixed-price FAA tower construction contract; cost overruns could materially impact margins.", "trigger"=>"Quarterly construction progress reports; any modification or change orders"}

{"entity"=>"General Dynamics Information Technology", "reason"=>"GDIT's $73.2M State Department contract has options up to $211.9M; performance on this delivery order will influence future recompete outcomes.", "trigger"=>"Option exercise decisions by State Department; IT compute services re-compete"}