CGI continues technology modernization initiatives for the Environmental Protection Agency

Rhea-AI Summary

CGI Federal Inc., a subsidiary of CGI Inc. (TSX: GIB.A) (NYSE: GIB), has been selected to provide modern technology solutions to the EPA's Office of Research and Development (ORD). The company secured a spot on the SMAVCS4 blanket purchase agreement (BPA) with a ceiling value of US $100M. CGI will continue supporting key financial management applications and deliver services enabling technology, data, and financial management for ORD's research programs.

CGI's role includes facilitating critical data collection, sharing, and publication for EPA and its co-regulatory partners. The company also provides operational support for financial and asset management requirements and technology support for research and development activities. This agreement reinforces CGI's long-standing partnership with EPA in advancing technology and modernization initiatives.

Positive

• Secured a spot on the SMAVCS4 blanket purchase agreement (BPA) with a ceiling value of US $100M
• Continuing support for key financial management applications for EPA's Office of Research and Development
• Expanding services to include technology, data, and financial management support for research programs
• Leveraging decades-long history of continuous innovation in service to EPA's technology initiatives

Negative

• None.

Insights

Financial Analyst

CGI Federal's recent contract win with the EPA's Office of Research and Development (ORD) is a significant development for the company's U.S. operations. The $100 million ceiling on this multi-award Blanket Purchase Agreement (BPA) represents a substantial opportunity for revenue growth in the government sector.

From an investor's perspective, this contract underscores CGI's strong positioning in the federal IT services market. The company's long-standing relationship with the EPA and its ability to secure continued business demonstrates its competitive advantage in this space. This contract win should provide a steady stream of revenue over the contract period, contributing to the stability of CGI's financial performance.

However, it's important to note that as a multi-award BPA, CGI will be competing with three other awardees for task orders under this agreement. This competitive landscape means that the actual revenue realized could be lower than the ceiling amount. Investors should monitor the company's success in securing individual task orders to gauge the full impact of this contract on CGI's financial performance.

The focus on modernization initiatives and financial management applications aligns well with broader trends in government IT spending, positioning CGI to potentially secure similar contracts with other agencies. This could lead to expanded market share and increased revenue in the long term.

Overall, while this contract is positive news, its impact on CGI's overall financial picture should be considered in the context of the company's total revenue, which was C$12.87 billion in fiscal year 2022. Investors should view this as a solid addition to CGI's contract portfolio rather than a game-changing development.

Tech Expert

CGI's continued engagement with the EPA's Office of Research and Development signifies a strategic alignment with cutting-edge environmental technology needs. The SMAVCS4 BPA encompasses a wide range of advanced technological services, including scientific modeling, application development, visualization and computational science.

This contract positions CGI at the forefront of environmental data management and analysis, a field that is becoming increasingly critical as climate change and environmental concerns take center stage globally. The company's role in facilitating data collection, sharing and publication for the EPA and its co-regulatory partners is particularly noteworthy, as it places CGI in a pivotal position within the environmental data ecosystem.

From a technological standpoint, this contract likely involves the implementation of advanced data analytics, machine learning and possibly AI technologies to support the EPA's research initiatives. These technologies are important for processing and analyzing the vast amounts of environmental data collected by the agency.

Moreover, CGI's involvement in modernizing financial management applications suggests a focus on integrating environmental and financial data systems. This integration is becoming increasingly important as organizations seek to understand and quantify the financial implications of environmental factors.

For investors, this contract demonstrates CGI's capability to deliver high-value, specialized technology solutions in a complex and evolving field. It also positions the company to potentially leverage this expertise in other sectors where environmental considerations are becoming more prominent, such as corporate sustainability initiatives.

However, the challenge for CGI will be to continually innovate and stay ahead in this rapidly evolving technological landscape. Investors should monitor CGI's R&D investments and partnerships in environmental technologies to assess its long-term competitiveness in this space.

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FAIRFAX, Va., July 25, 2024 /PRNewswire/ - CGI Federal Inc. (CGI), the wholly-owned U.S. operating subsidiary of CGI Inc. (TSX: GIB.A) (NYSE: GIB), has been selected to provide modern technology solutions to the Environmental Protection Agency's (EPA) Office of Research and Development (ORD). Under the Scientific Modeling, Application, Visualization, Computational Science, Software, and Statistical Support (SMAVCS4) blanket purchase agreement (BPA) and a new task order, CGI will continue to provide modernization initiatives, including the continued support of key financial management applications. This multi-award BPA has been awarded to four awardees; CGI's ceiling carries the value of US $100M.

"CGI brings a deep understanding of ORD's mission, leveraging our decades-long history of continuous innovation in service to EPA's technology and modernization initiatives, which aim to deliver meaningful outcomes to EPA and its program researchers," said Jay Hadley, CGI Senior Vice-President. "Under this new agreement, we will deliver a range of services and solutions that enable technology, data and financial management to help ORD advance their leading-edge research programs focused on the most pressing environmental health research needs across the agency." 

Currently, CGI plays a vital role in supporting EPA and its co-regulatory partners, including enabling mission operations by facilitating critical data collection, sharing, and publication. Additionally, CGI provides operational support for the agency's financial and asset management requirements, as well as technology support for research and development activities. 

"ORD's mission is critical to EPA's ability to effectively understand the factors that impact the environment and make informed, effective regulatory decisions," said Mike Kearns, CGI Vice-President, Consulting Services. "It is important, now more than ever, to have an accurate understanding of environmental health. CGI's experience supporting EPA's technology priorities enables us to partner with ORD to align its technology future within their ecosystem. We look forward to continuously evolving the applications and data products that underpin ORD's work." 

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 Fiscal 2023 reported revenue is CA$14.30 billion and CGI 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 harbors. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbor provisions of applicable Canadian and United States securities laws.

Forward-looking information and statements include all information and statements regarding CGI'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, 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 favorable 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's annual MD&A and in other documents that we make public, including our 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 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's annual 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's annual 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 Inc.

FAQ

What is the value of CGI's contract with the EPA's Office of Research and Development?

CGI's ceiling on the SMAVCS4 blanket purchase agreement (BPA) with the EPA's Office of Research and Development carries a value of US $100M.

What services will CGI provide to the EPA under the new agreement?

CGI will provide modern technology solutions, support key financial management applications, and deliver services enabling technology, data, and financial management for the EPA's research programs.

How does CGI's work impact the EPA's operations?

CGI plays a vital role in supporting EPA by facilitating critical data collection, sharing, and publication, providing operational support for financial and asset management, and offering technology support for research and development activities.

What is the stock symbol for CGI on the NYSE?

CGI's stock symbol on the New York Stock Exchange (NYSE) is GIB.