CGI selected for the U.S. Department of the Interior's cloud integration services under $2B Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract

Rhea-AI Summary

CGI Federal Inc., a subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), has been awarded a position on the Foundation Cloud Hosting Services II (FCHS2) contract by the U.S. Department of the Interior. This 10-year, US$2 billion Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract allows CGI to offer a comprehensive range of cloud services and solutions to support critical modernization needs.

CGI leverages its Software-as-a-Service (SaaS) offerings, cloud IT strategies, and cybersecurity consulting to provide tailored digital solutions for federal clients. The company was recently named a Leader in the IDC MarketScape: U.S. Federal Government Cloud Professional Services 2024 Vendor Assessment. CGI has been the top provider by volume of cloud services to the federal government since its first Foundation Cloud Hosting Services IDIQ award in 2014.

Positive

• Awarded position on a 10-year, US$2 billion IDIQ contract with the U.S. Department of the Interior
• Named a Leader in the IDC MarketScape: U.S. Federal Government Cloud Professional Services 2024 Vendor Assessment
• Top provider by volume of cloud services to the federal government since 2014

Negative

• None.

Insights

Government Technology Consultant

CGI Federal's selection for the U.S. Department of the Interior's $2 billion IDIQ contract is a significant win. This 10-year agreement positions CGI as a key player in providing cloud integration services for critical government modernization initiatives. The contract's substantial value and long duration offer CGI a stable revenue stream and the opportunity to deepen its relationship with a major federal agency. CGI's expertise in cloud services, cybersecurity and SaaS offerings aligns well with the government's digital transformation goals. Their recognition as a Leader by IDC MarketScape further validates their capabilities in this space. For investors, this contract reinforces CGI's strong position in the federal IT services market, potentially leading to increased revenue and market share in the coming years. However, it's important to note that IDIQ contracts don't guarantee specific task orders, so the actual revenue will depend on CGI's performance and the agency's needs over time.

Financial Analyst

This contract win is a positive development for CGI, potentially boosting its financial outlook. While the $2 billion IDIQ contract doesn't guarantee immediate revenue, it provides CGI with a significant opportunity to secure task orders over the next decade. Given CGI's track record as the top provider of cloud services to the federal government since 2014, there's a strong likelihood of substantial task order wins. This could lead to steady revenue growth in the company's U.S. federal business segment. For context, CGI's total revenue for fiscal year 2023 was $13.97 billion, so even a fraction of this contract could materially impact the company's financials. Investors should monitor the flow of task orders and CGI's success rate in winning them to gauge the actual financial impact. Additionally, this contract may enhance CGI's competitive position, potentially leading to higher profit margins and improved shareholder value over time.

FAIRFAX, Va., Oct. 2, 2024 /PRNewswire/ -- CGI Federal Inc. (CGI), the wholly owned U.S. operating subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), today announced it has been awarded a position on the Foundation Cloud Hosting Services II (FCHS2) 10-year, US$2 billion Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract by the U.S. Department of the Interior. Under this agreement, CGI offers a comprehensive range of cloud services and solutions in support of critical modernization needs.

"CGI is a global, world-class end-to-end IT and business consulting services leader, partnering with clients globally to effectively accomplish their mission objectives," said Jay Hadley, CGI Senior Vice-President, Regulatory Agencies Programs Business Unit. "This award positions CGI to continue as an advisor and partner of choice in cloud services which can accelerate modernization initiatives. As a strategic collaborator, we help clients accelerate and future-proof toward more adaptive, resilient, and sustainable operations."

CGI and its partners bring unique technologies, platforms, and products to critical public missions. CGI leverages its specialized Software-as-a-Service (SaaS) offerings, thought leadership in cloud IT strategies, and cybersecurity consulting to provide meaningful outcomes to the unique needs of our federal clients across agencies. CGI Federal was recently named a Leader in the IDC MarketScape: U.S. Federal Government Cloud Professional Services 2024 Vendor Assessment (doc #US49996223, April 2024).

"CGI's services focus on reducing risk and procurement timelines by supplying tailored digital solutions that meet the diverse requirements of federal clients," said Vishal Ranjan, CGI Vice-President, Consulting Services and a Sector Lead in the Regulatory Agencies Programs Business Unit. "Our deep understanding of the technologies and federal technology architecture is one of the reasons why CGI has been the top provider by volume of cloud services to the federal government since its first Foundation Cloud Hosting Services IDIQ award in 2014."

About CGI Federal
CGI Federal Inc., 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 C$14.30 billion and CGI Inc. shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

View original content:https://www.prnewswire.com/news-releases/cgi-selected-for-the-us-department-of-the-interiors-cloud-integration-services-under-2b-indefinite-delivery-indefinite-quantity-idiq-contract-302264357.html

SOURCE CGI Federal, Inc.

FAQ

What is the value and duration of the FCHS2 contract awarded to CGI (NYSE: GIB)?

The Foundation Cloud Hosting Services II (FCHS2) contract awarded to CGI is a 10-year, US$2 billion Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract.

What services will CGI (NYSE: GIB) provide under the FCHS2 contract?

Under the FCHS2 contract, CGI will offer a comprehensive range of cloud services and solutions to support critical modernization needs for the U.S. Department of the Interior.

How long has CGI (NYSE: GIB) been providing cloud services to the federal government?

CGI has been the top provider by volume of cloud services to the federal government since its first Foundation Cloud Hosting Services IDIQ award in 2014.

What recent recognition did CGI (NYSE: GIB) receive for its cloud services?

CGI was recently named a Leader in the IDC MarketScape: U.S. Federal Government Cloud Professional Services 2024 Vendor Assessment.