CGI awarded modernization contracts in support of global innovation community at the U.S. Patent and Trademark Office

Rhea-AI Summary

CGI Federal Inc., a subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), has been awarded two contracts by the U.S. Patent and Trademark Office (USPTO) with a combined potential value of US$119 million. The first is a 5-year Blanket Purchase Agreement worth up to US$84 million for secure financial management services using CGI's Momentum® software. The second is a US$36 million task order over five years to modernize USPTO's Certified Copy Center and Assignment Center products using cloud technology. These contracts aim to enhance operational efficiency, support revenue collection, and modernize systems for patent and trademark transactions, benefiting the global innovation community served by USPTO.

Positive

• Secured two contracts with USPTO totaling US$119 million potential value
• 5-year BPA worth up to US$84 million for financial management services
• US$36 million task order for system modernization over five years
• Opportunity to implement CGI's Momentum IP solution through Treasury's shared services marketplace
• Continued support for USPTO's clean audits and US$4 billion annual fee revenue collection

Negative

• None.

Insights

Financial Analyst

This contract win is moderately positive for CGI. The combined $119 million potential value over 5 years represents about 0.5% of CGI's annual revenue, a small but notable addition to their U.S. federal business. The deal showcases CGI's strength in government financial management systems, particularly with their Momentum software.

The USPTO contract demonstrates CGI's ability to secure long-term, high-value government contracts, which provide stable revenue streams. It also positions CGI well for potential future contracts within the U.S. Department of Treasury's shared services marketplace. However, investors should note that government contracts can be subject to political and budgetary risks.

Tech Expert

CGI's role in modernizing USPTO's systems using cloud technology is strategically significant. This aligns with the broader trend of government agencies moving towards cloud-based solutions for improved efficiency and security. The focus on DevSecOps (Development, Security and Operations) in the CC&A project indicates CGI's capability in delivering modern, agile software development practices to government clients.

The modernization efforts could potentially lead to additional opportunities within USPTO and other federal agencies. However, cloud migration and modernization projects can be complex and may face challenges in implementation, potentially impacting project timelines and profitability.

FAIRFAX, Va., Aug. 28, 2024 /PRNewswire/ -- CGI Federal Inc. (CGI), the wholly-owned U.S. operating subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), today announced two contract awards from the U.S. Patent and Trademark Office (USPTO). Under these contracts, which have a combined total potential value of US$119 million, CGI will deliver operational, maintenance and security solutions and expertise in support of the global innovation community operated by USPTO.

Under one of the awarded contracts, a 5-year Blanket Purchase Agreement (BPA) worth up to US$84 million, CGI will provide secure financial management services to USPTO to drive operational efficiency and support revenue collection through Momentum®, CGI's industry-leading financial management, budget and acquisition software customized for federal agencies. USPTO is the first agency to use the U.S. Department of Treasury's Financial Management Quality Service Management Office shared services marketplace to contract for CGI's Momentum IP solution and associated services.

"With Momentum, CGI has helped USPTO achieve meaningful business outcomes over the years, including supporting its consistently clean audits and its collection of more than US$4 billion in fee revenue annually," said Alisa Bearfield, CGI Senior Vice President for Civilian Agency operations. "Our support of USPTO financial operations demonstrates CGI's impact in the areas of technical and financial subject matter expertise, software development and end-user customer support services." 

As part of the second awarded contract, a new task order valued at US$36 million over five years under CGI's Alliant 2 Indefinite-Delivery, Indefinite Quantity (IDIQ) contract, CGI will provide development, security and operations support of USPTO's Certified Copy Center (CCC) and Assignment Center (CC&A) products. CGI's role will focus on modernizing systems within CC&A using cloud technology to support transactions related to certified copies of patent and trademark documents, and transfer of patent and trademark ownership. Patent and trademark holders will benefit from a modernized system that is more efficient, user-friendly and secure.

"These two new awards underscore CGI's role as a trusted partner in delivering reliable solutions that foster innovation and help the USPTO enable economic growth," said Stephanie Mango, CGI President, U.S. Federal Market. "CGI has supported USPTO's digital transformation, with pivotal milestones such as the retirement of legacy systems in favor of more modern, secure and user-friendly systems. These awards reflect CGI's commitment to enhancing operational capabilities and ensuring the efficiency and security of the USPTO's infrastructure." 

About CGI Federal
CGI Federal Inc. (CGI), a wholly owned U.S. operating subsidiary of CGI Inc., is dedicated to partnering with federal agencies to provide solutions for defense, civilian, healthcare, justice, intelligence, and international affairs missions. Founded in 1976, CGI Inc. is among the largest independent IT and business consulting services firms in the world. With 90,000 consultants and professionals across the globe, CGI Inc. delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI Inc. works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Inc. Fiscal 2023 reported revenue is CA$14.30 billion and CGI Inc.'s shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

Forward-looking information and statements 
This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI Inc.'s intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", "predict", "project", "aim", "seek", "strive", "potential", "continue", "target", "may", "might", "could", "should", and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of CGI Inc., and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, additional external risks (such as pandemics, armed conflict, climate-related issues and inflation) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws and other tax programs, the termination, modification, delay or suspension of our contractual agreements, our expectations regarding future revenue resulting from bookings and backlog, our ability to attract and retain qualified employees, to negotiate favourable contractual terms, to deliver our services and to collect receivables, to disclose, manage and implement environmental, social and governance (ESG) initiatives and standards, and to achieve ESG commitments and targets, including without limitation, our commitment to net-zero carbon emissions by 2030, as well as the reputational and financial risks attendant to cybersecurity breaches and other incidents, and financial risks such as liquidity needs and requirements, maintenance of financial ratios, interest rate fluctuations and the discontinuation of major interest rate benchmarks and changes in creditworthiness and credit ratings; as well as other risks identified or incorporated by reference in this press release, in CGI Inc.'s annual and quarterly MD&A and in other documents that we make public, including filings with the Canadian Securities Administrators (on SEDAR+ at www.sedarplus.ca) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). 

Unless otherwise stated, the forward-looking information and statements contained in this press release are made as of the date hereof and CGI Inc. disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this press release, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. 

Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled Risk Environment of CGI Inc.'s annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI Inc.'s annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

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SOURCE CGI Federal, Inc.

FAQ

What is the total potential value of CGI's new contracts with USPTO?

The combined total potential value of CGI's two new contracts with the U.S. Patent and Trademark Office is US$119 million.

What services will CGI (GIB) provide under the US$84 million contract with USPTO?

Under the US$84 million Blanket Purchase Agreement, CGI will provide secure financial management services to USPTO using its Momentum® software to drive operational efficiency and support revenue collection.

How will CGI modernize USPTO's systems under the US$36 million contract?

CGI will modernize USPTO's Certified Copy Center and Assignment Center products using cloud technology to support transactions related to certified copies of patent and trademark documents and ownership transfers.

How long are the terms of CGI's new contracts with USPTO?

Both contracts have a term of 5 years. The Blanket Purchase Agreement is for 5 years, and the task order is also for a period of five years.