U.S. Department of State extends contract with CGI for application processing services for more than 21 million passports annually

Rhea-AI Summary

CGI Federal Inc., a subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), has secured a 2-year, US$378 million contract extension with the U.S. Department of State for passport application processing services. This extension continues CGI's support for the Bureau of Consular Affairs, processing over 21 million passports annually. The company will focus on enhancing process efficiencies, improving customer service, and optimizing the passport application experience for American citizens.

CGI's ongoing collaboration with the DoS has resulted in improved workflow, reduced administrative burdens, and increased transparency in the passport application process. The extended contract will provide optimized workflow processes, change management, and extensive customer service assistance. Applicants will benefit from enhanced services, including more channels for document applications and fee payments.

Positive

• Secured a 2-year, US$378 million contract extension with the U.S. Department of State
• Continued support for processing over 21 million passports annually
• Opportunity to further enhance process efficiencies and customer service improvements
• Expanded channels for passport applications and fee payments

Negative

• None.

Insights

Financial Analyst

This contract extension is a significant win for CGI, representing a $378 million revenue stream over the next two years. The renewal demonstrates CGI's strong position in government contracting and its ability to retain high-value, long-term clients. With over 21 million passports processed annually, this contract provides a stable and predictable income source.

The extension also highlights CGI's expertise in digital transformation and process optimization, which could lead to increased operational efficiency and potentially higher profit margins. Investors should note that such large government contracts often come with lower risk and steady cash flows, contributing to the company's financial stability.

Government Services Expert

This contract extension underscores CGI's strong position in the government services sector, particularly in mission-critical operations. The company's ability to secure a renewal for such a vital service demonstrates its reliability and performance in handling sensitive government processes.

The focus on customer-centric improvements and process efficiencies aligns with current government priorities for modernization and citizen service enhancement. This positions CGI favorably for future contract opportunities across various government agencies. The company's track record in reducing administrative burdens and improving transparency could be leveraged to expand its footprint in other areas of government digital transformation.

Tech Industry Analyst

CGI's continued involvement in passport processing services showcases its technological capabilities in handling large-scale, data-intensive operations. The mention of workflow optimization and enhanced customer-facing services suggests ongoing investment in advanced technologies, possibly including AI and machine learning for process automation.

The extension of channels for application and fee payment indicates a push towards digital transformation, which could involve the development of new software solutions or integration with existing government systems. This positions CGI as a key player in the govtech sector, a growing market as more government services move online. Investors should watch for potential spillover effects, as innovations developed for this contract could be applied to other government or private sector projects.

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www.cgi.com/newsroom

FAIRFAX, Va., Aug. 6, 2024 /PRNewswire/ - CGI Federal Inc. (CGI), the wholly-owned U.S. operating subsidiary of CGI Inc. (NYSE: GIB) (TSX: GIB.A), today announced a 2-year, US$378M extension of its contract with the U.S. Department of State (DoS) for end-to-end passport application processing services supporting the Bureau of Consular Affairs. By extending its longstanding collaboration with DoS, CGI will continue to deliver process efficiencies and customer service improvements, as well as other core mission services to support the Bureau.

"CGI's ongoing enhancements assist the Bureau in optimizing the experience and reducing the turnaround time of passport application services," said Derrick Williams, CGI Senior Vice-President, Consulting Delivery for International Affairs. "Our focus on collaboration and mission success, underpinned by the delivery of services with increased efficiency, will continue to provide a customer-centric passport application process for the American people."

Over the last decade, CGI has helped the Bureau improve workflow, reduce administrative burdens for federal employees and improve transparency into the passport application process. Under this contract extension, CGI will provide optimized workflow processes, change management and extensive customer service assistance in support of the Bureau's Passport Services Directorate. Applicants will benefit from enhanced customer facing services, including more channels through which they can apply for documents and pay fees.

"Managing passport applications is a vital citizen service and critical government mission that helps ensure the flow of commerce and tourism worldwide," said Stephanie Mango, CGI Federal President. "CGI is proud to play a key role in helping DoS enable travel for U.S. citizens, foster business opportunities for organizations, support family connections and assist in emergencies."

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 Inc.

FAQ

What is the value and duration of CGI's contract extension with the U.S. Department of State?

CGI has secured a 2-year contract extension worth US$378 million with the U.S. Department of State for passport application processing services.

How many passports does CGI process annually under this contract?

CGI processes more than 21 million passports annually for the U.S. Department of State's Bureau of Consular Affairs.

What improvements has CGI made to the passport application process?

CGI has improved workflow, reduced administrative burdens for federal employees, increased transparency, and enhanced customer-facing services, including more channels for applications and fee payments.

How will this contract extension affect CGI's stock (GIB)?

While the specific impact on CGI's stock (GIB) is not mentioned, the US$378 million contract extension represents a significant revenue stream and continued business in a key government sector, which could potentially have a positive influence on investor sentiment.