Leidos awarded $331 million contract to modernize the Army's Global Unified Network

Rhea-AI Summary

Leidos (NYSE:LDOS) has been awarded a $331 million contract to modernize the U.S. Army's network, aligning with the Army's Network Modernization Strategy and Unified Network Plan. The contract, awarded by the Army Program Executive Office for Command, Control and Communications-Tactical Global Enterprise Network Modernization-OCONUS, has a one-year base period with four one-year options.

Leidos will deploy the Army's Global Unified Network (AGUN), which utilizes Software Defined Network technologies and supports the transition to a Zero Trust Architecture. This initiative aims to deliver a standardized, orchestrated modern network architecture, enhancing interoperability and security across all operational levels.

The project will make applications, data, and enterprise services accessible, trusted, and interoperable globally, supporting the Army's divestiture of Joint Regional Security Stacks.

Positive

• Secured a significant $331 million contract with the U.S. Army
• Aligns with the Army's Network Modernization Strategy, positioning Leidos at the forefront of military communication capabilities
• Enhances Leidos' role in advancing critical national security infrastructure

Negative

• None.

Insights

Defense Industry Analyst

The $331 million contract awarded to Leidos for modernizing the U.S. Army's Global Unified Network is a significant win for the company. This project aligns with the Army's broader Network Modernization Strategy and Unified Network Plan, positioning Leidos as a key player in military communication advancements.

The contract's structure, with a one-year base and four one-year options, provides potential long-term revenue stability. If all options are exercised, this represents a substantial 2.15% of Leidos' FY2023 revenue, which could positively impact future earnings.

Investors should note the strategic importance of this project:

• Enhances Leidos' position in defense technology modernization
• Supports the transition to Zero Trust Architecture
• Aims to improve global interoperability and security

This contract reinforces Leidos' competitive edge in the defense sector and could lead to follow-on opportunities as the military continues to upgrade its communication infrastructure.

Cybersecurity Expert

The Army's shift towards a Zero Trust Architecture, facilitated by Leidos' implementation of the Global Unified Network (AGUN), marks a critical advancement in military cybersecurity. This approach assumes no trust in any entity, continuously verifying every access attempt, which is essential in today's complex threat landscape.

Key cybersecurity implications include:

• Enhanced protection against insider threats and lateral movement by attackers
• Improved data segmentation and access control
• Greater visibility and auditing capabilities across the network

The divestiture of Joint Regional Security Stacks in favor of a more distributed, software-defined network architecture should provide better scalability and resilience. This modernization effort will likely serve as a benchmark for other military branches and even large enterprises, potentially opening up new market opportunities for Leidos in both public and private sectors.

RESTON, Va., Oct. 21, 2024 /PRNewswire/ -- Leidos (NYSE:LDOS), a Fortune 500^® innovation leader, was recently awarded a new contract to modernize the U.S. Army's network in alignment with the Army's Network Modernization Strategy and Army Unified Network Plan. The contract was awarded by the Army Program Executive Office for Command, Control and Communications-Tactical Global Enterprise Network Modernization-OCONUS (PEO C3T GENM-O). The contract has a one-year base period of performance with four one-year option periods. The contract has a total value of $331 million if all options are exercised.

"Winning this $331 million contract is a significant milestone for Leidos and underscores our commitment to supporting the U.S. Army's modernization efforts," said Steve Hull, president of Leidos' digital modernization sector. "We are proud to partner with the Army in deploying the Global Unified Network, which will enhance interoperability and security across all levels of operations. This initiative not only aligns with the Army's Network Modernization Strategy but also aims to position us at the forefront of advancing military communication capabilities in an increasingly complex global landscape."

The Army's Global Unified Network (AGUN) utilizes Software Defined Network technologies that integrate and support the Army's transition to a Zero Trust Architecture to allow for the divestiture of the Joint Regional Security Stacks. Under the contract, Leidos will deploy AGUN to individual Army sites to deliver a standardized, orchestrated modern network architecture, aiming to make applications, data, and enterprise services are accessible, trusted and interoperable across the globe.  

About Leidos
Leidos is a Fortune 500® innovation company rapidly addressing the world's most vexing challenges in national security and health. The company's 48,000 employees support vital missions for government and commercial customers. Headquartered in Reston, Virginia, Leidos reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. For more information, visit www.Leidos.com. 

Certain statements in this announcement constitute "forward-looking statements" within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management's current beliefs and expectations and are subject to significant risks and uncertainties. These statements are not guarantees of future results or occurrences. A number of factors could cause our actual results, performance, achievements, or industry results to be different from the results, performance, or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, the "Risk Factors" set forth in Leidos' Annual Report on Form 10-K for the fiscal year ended December 29, 2023, and other such filings that Leidos makes with the SEC from time to time. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Leidos does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Media Contact:                                              

Alyssa Pettus 
(571) 526-6743 
alyssa.t.pettus@leidos.com

Brandon VerVelde
(571) 526-6257
Brandon.p.vervelde@leidos.com 

 

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SOURCE Leidos Holdings, Inc.

FAQ

What is the value of the contract Leidos (LDOS) won from the U.S. Army?

Leidos (LDOS) won a contract with a total value of $331 million if all options are exercised.

What is the purpose of the contract awarded to Leidos (LDOS)?

The contract is to modernize the U.S. Army's network in alignment with the Army's Network Modernization Strategy and Army Unified Network Plan.

What technology will Leidos (LDOS) deploy for the Army's Global Unified Network?

Leidos will deploy Software Defined Network technologies that integrate and support the Army's transition to a Zero Trust Architecture.

How long is the base period of performance for the Leidos (LDOS) Army contract?

The contract has a one-year base period of performance with four one-year option periods.