What changed in this filing

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Item 1. Business

2022-03-28 compared with 2021-03-26 · 90 added, 50 removed, 176 unchanged (44% of the section changed)

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We have approximately 26,000 employees that are led by an experienced executive team of proven industry leaders.

On July 2, 2021, the Company completed the acquisition of Halfaker and Associates, LLC (Halfaker), a mission focused, pure-play health IT company, which grows the Company's digital transformation portfolio.

Additionally, on May 3, 2021, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data.

On March 13, 2020, we completed the acquisition of Unisys Federal, a former operating unit of Unisys Corporation, which enhances our capabilities in government priority areas, expands our portfolio of intellectual property and technology-driven offerings, and increases our access to current and new customers.

On January 14, 2019, we completed the acquisition of Engility Holdings, Inc.

(collectively with its consolidated subsidiaries, "Engility"), which provides increased customer and market access, as well as increased scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence and space.

Our core strengths have supported our successful performance on programs of national importance.

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We have strong and long-lasting customer relationships throughout the U.S.

Our track record of serving the missions of our government customer spans decades, including several enduring customer relationships that have lasted 20 years or more.

Our track record of serving the missions of our government customers spans decades, including several enduring customer relationships that have lasted 20 years or more.

Our employees, many of whom are deployed at customer sites, work closely with our customers in fulfilling their missions.

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Significant Scale and Diversified Contract Base.

With approximately $7.1 billion in revenue in fiscal 2021, we are one of the largest pure-play technical service providers to the U.S.

With approximately $7.4 billion in revenue in fiscal 2022, we are one of the largest pure-play technology service providers to the U.S.

Our significant scale advantage enables us to serve as a prime systems integrator on large, complex programs and to allocate resources toward further developing and expanding our repeatable, proven solutions and differentiated technical capabilities.

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We deploy our tools and processes enterprise-wide and emphasize a consistent approach to planning, designing and delivering solutions and services to our customers.

We hold certifications from the International Organization for Standardization (including ISO 9001, ISO/IEC 27001, ISO 20000-1 and AS9100D), and from the Capability Maturity Model Integration Institute as a CMMI®-DEV Maturity Level 3 organization and CMMI®-SVC Maturity Level 2 for Army Programs with Strategic Goals for Best Practice Service Delivery.

The Company is organized as a matrix comprised of three customer facing operating segments supported by a strategy, growth and innovation organization.

The three operating segments are responsible for customer relationships, business development and program management, and delivery and execution, while the strategy, growth and innovation organization manages the development of our offerings, solutions and capabilities.

Each of the Company’s three operating segments is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government.

The Company's operating segments are aggregated into one reportable segment for financial reporting purposes.

The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization.

The two operating sectors are responsible for customer relationships, business development and program management, and delivery and execution, while the enterprise solutions and operations organization manages the development of our offerings, solutions and capabilities.

Each of the Company’s two operating sectors is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government.

The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes.

For additional discussion and analysis related to recent business developments, see “Economic Opportunities, Challenges and Risks” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this report.

Key Customers

In each of fiscal 2021, 2020 and 2019, over 95% of our total revenues were attributable to prime contracts with the U.S.

In each of fiscal 2022, 2021 and 2020, 98% of our total revenues were attributable to prime contracts with the U.S.

government or to subcontracts with other contractors engaged in work for the U.S.

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government, its agencies and other customers, including those comprising more than 10% of total revenues for each of the periods presented were approximately:

January 29, 2021 January 31, 2020 February 1, 2019

January 28, 2022 January 29, 2021 January 31, 2020

Army 15 % 17 % 21 %

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government may revise its procurement practices or adopt new contract rules and regulations at any time.

Our compliance with these regulations is monitored by the Defense Contract Management Agency and the Defense Contract Audit Agency.

Our compliance with these regulations is monitored by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA).

government has the ability to cancel contracts at any time through a termination for the convenience of the U.S.

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• the engineering and technical services divisions of large defense contractors that provide IT services in addition to other hardware systems and products, which include companies such as General Dynamics Corporation, Northrop Grumman Corporation, and Raytheon Technologies Corporation;

• contractors focused principally on technical and IT services, such as Booz Allen Hamilton Inc., CACI International, Inc., Leidos Holdings, Inc., ManTech International Corporation, Serco Group plc, and Perspecta Inc.;

• diversified commercial providers that also provide U.S.

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Competition within the government services industry has intensified, which has led to fewer sole-source awards and an increased emphasis on cost competitiveness and affordability.

In addition, procurement initiatives to improve efficiency, refocus priorities and enhance best practices could result in fewer new opportunities for our industry as a whole, which would intensify competition within the industry as companies compete for a more limited set of new programs.

In addition, procurement initiatives to improve efficiency, refocus priorities, increase small business awards and enhance best practices could result in fewer new opportunities for our industry as a whole, which would intensify competition within the industry as companies compete for a more limited set of new programs.

Patents and Proprietary Information

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In the case of some subcontracts that we perform, the prime contractor may also have certain rights to the programs and solutions that we develop under the subcontract.

Human Capital

As a company whose purpose is to advance the power of technology and innovation to serve and protect our world, our people are fundamental to our success.

Attracting and retaining top talent, to develop new innovations and solutions in support of our customers’ vital missions, is central to our Company’s business strategy.

SAIC’s diverse

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

and talented workforce is at the heart of our inclusive culture and our value proposition for customers, shareholders and stakeholders.

Investing in our employees’ well-being, development, and growth helps create an innovative, productive and inclusive culture, where our people can be their best and do their best.

The majority of our approximately 26,000 employees – of which 93% are full time – are l ocated in the United States, with a small percentage supporting our customers' missions overseas.

Our culture is a cornerstone of SAIC’s 50+ year heritage, and central to every aspect of the Company.

In fiscal 2021, SAIC adopted a new purpose statement and refined our values to better reflect the strength of our people:

Passion, Empowerment, Integrity, Inclusion, and Innovation.

We saw these values come to life across the organization, in particular, in our COVID-19 response and how we internally addressed the civil unrest across the nation.

The impact of the COVID-19 pandemic fundamentally changed how we work and live.

To support the well-being of our employees and our communities, we immediately took a number of important steps.

Beyond transitioning to a remote work environment, we analyzed potential business, financial and employee impacts to assess worst-case scenarios to enable us to care for our people.

At the outset, we established protocols to protect the health and safety of our most precious asset, our people.

We established both a non-profit foundation – The SAIC Charitable Foundation – to provide financial support for our employees and an employee leave donation program which generated close to $3 million of leave hours to be used by employees unable to work due to the pandemic.

In addition, we provided a comprehensive set of resources and programs for managing through the pandemic, working virtually, and handling stress, all in support of our employees’ mental and physical well-being.

Employee health and safety is paramount to our business.

We encourage employees to prevent workplace hazards and engage in health and wellness initiatives.

In fiscal 2021, we adopted a flexible work schedule in which many of our employees work 80 hours over 9 days.

SAIC provides wide-ranging options to support employees’ well-being, including an Employee Assistance Program and a wellness program.

In addition, we augmented and accelerated our focus on diversity, equity and inclusion (DEI) to embrace individual differences, life experiences, and capabilities, and to bring together varying perspectives to create compelling innovations and deliver exceptional business results.

Central to our DEI strategy is increasing the diversity representation in our leadership, which we believe is fundamental to fostering an inclusive culture and advancing DEI at SAIC.

We are committed to ensuring that the diversity of our leadership fully reflects the diversity of our employee population at large.

In fiscal 2021, we augmented and accelerated actions to advance DEI at SAIC, focusing on four key areas:

People and Culture

SAIC’s purpose is to advance the power of technology and innovation to serve and protect our world .

We achieve our purpose with and through our people, who are fundamental to our success.

Our values underpin our culture and are at the heart of how we operate:

Love what you do

• Empowerment:

Decide and act

Embrace differences

• Innovation:

Think courageously

Attracting and retaining top talent is an essential element of SAIC’s business strategy and our value proposition for our shareholders, customers, and employees.

To deliver on this strategy, we seek to be a company that provides meaningful work and purpose, and creates a fulfilling and differentiated experience for our employees.

Our investments in our employees drive a productive, innovative and inclusive culture, where our people are empowered to be their best authentic selves and to do their best work.

As of January 28, 2022, we employed approximately 26,000 employees, of which 93% are full time with the majority l ocated in the United States.

To cultivate a differentiated employee experience, we are focused on fostering a flexible work environment, strengthening diversity, equity and inclusion (DE&I), and enhancing employee well-being.

Fostering flexibility

The pandemic has caused people to re-evaluate their priorities and expectations about work.

Flexibility of work schedule and location is a key reason why people join and stay at companies, and we are creating an environment at SAIC where our employees can use the power of flexibility to thrive.

We implemented flexible work schedules including a 4-day workweek and other schedule options and increased remote and hybrid work opportunities.

Our definition of flexibility is not a one-size fits all, rather it is tailored and nurtured through the engagement between our employees and their leaders.

Flexibility has helped us widen the talent pool and attract and retain highly skilled people in extremely sought after disciplines such as science, technology, engineering and cybersecurity.

During fiscal 2022, we hired more than 5,800 new employees and kept voluntary turnover below our industry’s average rate.

Strengthening diversity, equity, and inclusion

Our ongoing diversity, equity, and inclusion efforts demonstrate our continuing promise to share our intentions, to hold ourselves accountable, and to be transparent about both our progress and our areas of opportunity.

We believe diversity creates unparalleled innovation and is critical to the delivery of exceptional business results.

We seek to drive tangible change through our commitments to:

Fight racism, bias, and prejudice in our workplace.

Make SAIC more inclusive and diverse.

Support non-profit organizations that are uplifting minorities in our communities.

Support non-profit organizations that are uplifting people of color in our communities.

Measure and hold ourselves accountable for results.

To support these focus areas, we took a number of actions including implementing mandatory unconscious bias training for all leaders and improving our recruiting practices to eliminate unintentional biases and to reach a diverse pool of candidates.

We will publicly share our key diversity metrics and goals in the coming year.

SAIC was honored by Forbes for America’s Best Employers for Diversity and America’s Best Employers for Veterans and by the Human Rights Campaign for the third consecutive year with a perfect score as a Best Place to Work for LGBTQ Equality.

Our inclusive, diverse culture gives us the opportunity and strength in the market to continually attract and retain highly skilled employees in the areas of science, technology, engineering, cybersecurity, manufacturing and strategy development.

Being an early adopter in our industry for virtual recruiting and onboarding prepared us for the unexpected COVID-19 pandemic and we have since hired over 5,600 new employees.

SAIC was recognized by Dice as one of the top ten companies hiring tech talent in 2020.

The strength of our leadership is greatest when it fully reflects the diversity of our workforce.

In fiscal 2022, we established goals to achieve parity in the representation of women and people of color between our leadership and non-leadership roles within five years.

We made meaningful progress toward our goals this year, with women now representing 27% of our leadership and people of color representing 22%.

While we have achieved parity between women in leader and non-leader roles and made considerable progress toward our people of color leader representation goal, we know there is more work to be done.

To hold ourselves

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Through our annual culture survey and employee engagement programs, we gather feedback to understand how we can shape and improve our efforts to support our employees’ growth and development.

We invest in our people through technical and professional skills training, leadership development programs, higher education programs, and tuition assistance programs for continuing education or industry certification.

Our innovative and inclusive culture, and our commitment to our employee’s overall well-being, help us to cultivate our talent and inspire our people.

accountable for results, SAIC’s executive compensation incentive plans are tied to meeting our diversity goals.

As of January 28, 2022, our diversity representation was:

SAIC Leaders 27% Women 22% People of Color

SAIC Non-leader Employees 27% Women 33% People of Color

To build our diversity pipeline, we instituted a new approach to ensure SAIC job descriptions, recruiting tools and processes eliminated the potential for bias, and we required a diverse slate of candidates for leadership roles.

We launched the AcceleratHER Women's Leadership Academy, a nomination-based development and mentoring program focused on accelerating the advancement of SAIC's high-potential women.

Among our efforts to fight racism, bias, and prejudice in the workplace, we added unconscious bias training as a requirement for all new employees and continued to require that all leaders complete our “From Unconscious Bias to Inclusion” training course.

As an important demonstration of SAIC’s commitment to advance diversity, equity and inclusion, we added Juneteenth as a paid holiday for our employees, being one of the first in our industry to do so.

Our employees are encouraged to actively participate in our multiple employee resource groups (ERG) where they can enhance their personal networks and their sense of belonging.

This year, we added a new accessibility ERG to advocate and support employees and their family members with visible and non-visible disabilities including mental health and neurodiversity.

Our progress on our DE&I initiatives has been recognized:

SAIC is a Forbes 2022 Best Large Employers;

a Forbes America’s Best Employers for Veterans;

a Human Rights Campaign Best Places to Work for LGBTQ Equality;

and a Forbes Best Employers for Diversity.

We are honored that 23% of our employees are veterans of the U.S.

armed forces.

Enhancing employee well-being

Through our annual culture survey, we gather confidential feedback from our employees to learn how we can improve our efforts to provide an exceptional employee experience.

To ensure all levels of management understand employee sentiment, every individual leader receives aggregated results to develop an action plan to address their team’s needs.

Strengths and opportunities are identified leading to focused investments to build on our cultural strengths and address areas for improvement.

Training to upskill our leaders in coaching, enhancing team well-being, and engaging hybrid teams inclusively was implemented this year as a result of survey feedback.

Additionally, we invest in our people through technical and professional skills training, leadership development programs, higher education programs and tuition assistance programs for continuing education or industry certification.

In fiscal 2022, our employees completed approximately 134,000 hours of training including 55,000 hours of ethics and compliance training.

Our leaders completed over 11,000 hours of leadership development training.

SAIC provides wide-ranging options to support employees’ well-being, including an Employee Assistance Program and a wellness program.

This year, based on employee feedback, we substantially raised paid family leave to further support parents and multi-generational families and offered company-subsidized backup child and elder care.

Additionally, for the second year in a row, SAIC is fully covering the increased costs of employee premiums in the Company’s medical insurance plans and holding employee premiums flat.

Employee health and safety is paramount to our business and contributes to our employees’ well-being.

We encourage employees to prevent workplace hazards and engage in health and wellness initiatives.

Throughout the COVID-19 pandemic, our priority has been the safety and well-being of our employees and business partners.

We continue to closely monitor COVID-19 matters and provide comprehensive resources and programs for managing through the pandemic, working virtually and handling associated stress as well as sharing timely information on the topic.

Research and Development

For information related to our research and development activities, see Note 1 to the consolidated financial statements contained within this report.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

government’s fiscal year ends on September 30.

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Our operations are subject to various foreign, federal, state and local environmental protection and health and safety laws and regulations.

Although we do not currently anticipate that compliance costs or the liabilities associated with environmental laws will materially and adversely affect us, we cannot ensure that we will not incur material costs or liabilities in the future.

SAIC is committed to being a good steward of the environment through assessing, mitigating and reducing the impact we have on the world around us.

Due to the nature of our business, SAIC has limited exposure to environmental risks, yet we set self-imposed goals related to the reduction of greenhouse gas emissions, energy conservation, recycling and other important environmental initiatives.

In 2014, SAIC set a goal of reducing greenhouse gas emissions by 15% by 2025 and exceeded that goal by reaching the reduction of 25% in 2016.

To further encourage cuts to our carbon footprint, we used 2019 as a new baseline and made significant progress in reducing emissions in 2020.

Specifically, direct emissions from owned or controlled sources (Scope 1) were 25% below 2019 emissions levels, and indirect emissions from purchased electricity (Scope 2) were 21% below 2019 levels.

For energy conservation, SAIC’s efforts are sharply focused on electrical energy consumption.

We track and evaluate electricity consumption and efficiency at those facilities over which we have operational control.

In calendar year 2020, partially due to decreased facility use as a result of the COVID-19 pandemic, SAIC reduced its electrical energy consumption by 3% from 2019 levels, with a total consumption of 34,813,703 kWh.

For additional information regarding environmental matters, see SAIC's 2022 Corporate Responsibility Report, which is expected to be issued during the second quarter of fiscal 2023 and will be available on our website at www.saic.com .

The information on our website is not incorporated by reference into and is not a part of this report.

Although we do not currently anticipate that compliance costs or the liabilities associated with environmental laws or climate change will adversely affect our business, financial position, and results of operations and/or cash flows, it is possible that we may incur material costs or liabilities in the future.

These regulations and risks are described in more detail under “Risk Factors” in this report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business