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Summary
Together with Booz Allen Hamilton, San Diego-based SAIC stands like a private colossus across the whole intelligence industry. Of SAIC’s 42,000 employees, more than 20,000 hold U.S. government security clearances, making it, with Lockheed Martin, one of the largest private intelligence services in the world.
SAIC’s largest and most well-known customer in the intelligence community is the National Security Agency. Indeed, so many NSA officials have gone to work at SAIC that intelligence insiders call the company "NSA West." SAIC also does a significant amount of work for the Central Intelligence Agency, where it is among the top five contractors.
Corporate Information
SAIC’S INTELLIGENCE NICHE. SAIC is deeply involved in the operations of all the major collection agencies, particularly the NSA, NGA and CIA. SAIC, for example, managed one of the NSA’s largest efforts in recent years, the $3 billion Project Trailblazer, which attempted (and failed) to create actionable intelligence from the cacophony of telephone calls, fax messages, and emails that the NSA picks up every day. Launched in 2001, Trailblazer experienced hundreds of millions of dollars in cost overruns and NSA cancelled it in 2005. (See special section below). SAIC’s Homeland Intelligence Solutions Operation unit holds contracts with the controversial Counter-Intelligence Field Activity office, now part of the DIA.
More than 5,000 SAIC employees, or about one in every seven, hold security clearances. They offer “domain expertise” across a wide range of intelligence, including counterterrorism, counter-proliferation, remote sensing and imaging, intelligence analysis support, signal analysis and processing, signal intelligence systems, surveillance and reconnaissance systems, and unmanned aerial vehicles. SAIC's extensive work for intelligence agencies requires it to be constantly searching for new employees with security clearances. “We really are a hiring machine,” CEO Ken Dahlberg told analysts during a recent earnings conference call. “If you are a cleared polygraph intel specialist, you command a lot of activity. So we are doing our best to find ways to keep, as well as hire, these kind of folks.”
According to the SAIC website, the company develops “solutions to help the US defense, intelligence, and homeland security communities build an integrated intelligence picture, allowing them to be more agile and dynamic in challenging environments and produce actionable intelligence.” Its website defines its role as providing “mission-critical intelligence support in the war on terror.” Interviewed in a SAIC internal newsletter, Larry Prior, a 30-year veteran of U.S. intelligence who runs the company’s Intelligence and Security Group, explained: “That’s where you have anywhere from 10 to 100 employees and, oh, by the way, the future of the nation rests on their backs.”
NSA. SAIC has a somewhat symbiotic relationship with the NSA: The agency is the company's largest single customer, and SAIC is the NSA’s largest contractor. The company’s penchant for hiring former intelligence officials played an important role in its advancement. The story of [http://en.wikipedia.org/wiki/William_B._Black,_Jr. William Black] is another case in point. In 1997, the 40-year NSA veteran was hired as an SAIC vice president "for the sole purpose of soliciting NSA business," according to a published account. [1] Three years later, after NSA initially funded Trailblazer, Black went back to the agency to manage the program; within a year, SAIC won the master contract for the program.
Other key SAIC hires for its intelligence division include John Thomas, a retired army major general and commander of the US Army Intelligence Center; Larry Cox, an 11-year NSA veteran and former director of Lockheed Martin's SIGINT division; and John J. Hamre, the former deputy secretary of defense in the Clinton administration.* Two former secretaries of defense, William J. Perry and Melvin Laird, as well as the current secretary, Bob Gates, have served on its board of directors. For most of the Bush administration, SAIC’s top intelligence man was Duane Andrews, SAIC’s corporate executive vice president. For years, he ran SAIC’s NSA programs, including its contract for Trailblazer (under that project, he once declared that SAIC “will continue to provide NSA with all the technology and systems support needed to help them achieve their goals.” ). Before coming to SAIC, Andrews had been a close aide to Vice President Dick Cheney. Their ties dated back to the first Gulf War, when he was an assistant secretary of defense in Cheney’s Pentagon (Andrews is now the CEO of QinetiQ’s North American operations).
∗ Hamre was a fortuitous pick for SAIC. In October 2007, he was selected by Secretary of Defense Robert Gates to chair the Pentagon’s Defense Policy Board Advisory Committee. His term as an SAIC director expired in 2008.
IMAGERY. SAIC has a major contract with NGA (the agency won’t put a dollar value on it) to produce geospatial information transmitted to U.S. troops and intelligence staff around the world. In 2004, the company received a Meritorious Unit Citation from CIA Director George Tenet for developing the imagery systems used by the Predators, U-2s, and Global Hawk surveillance aircraft the CIA and NGA deployed over Iraq. Tenet praised SAIC for “developing and deploying a capability making theater airborne imagery available to a wide range of defense and intelligence users.” This may have been Tenet’s way of recognizing SAIC’s role in a famous incident during the early stages of the war against Al Qaeda, when CIA officers, with Tenet in the room, fired a missile from a CIA Predator flying above Yemen, killing a key member of Al Qaeda and one of his American accomplices. According to a 2007 profile of SAIC in Vanity Fair, the CIA relies on SAIC to spy on its own workforce. “If the C.I.A. needs an outside expert to quietly check whether its employees are using their computers for personal business, it calls on SAIC.” SAIC also plays a key role in NGA activities as a result of its work as the principal contractor for the Joint Intelligence Operations Capability-Iraq, the Pentagon unit that transmits classified intelligence to U.S. military forces engaged in battle. Managing SAIC’s work for the NGA is Leo A. Hazlewood, a 23-year CIA veteran who served as the NGA’s first deputy director.
DEFENSE INTELLIGENCE. One of SAIC’s largest contracts is with the DIA, which hired the company to manage 2,900 secure rooms known as Sensitive Compartmented Information Facilities, or SCIFs, where DoD employees and contractors handle classified information. SAIC is responsible for designing, constructing, and maintaining security at these facilities, which are located at defense offices around the country. It also provides the DIA with “highly trained and experienced professional security personnel” cleared at the SCI leve—the highest possible in the intelligence community—to manage the SCIFs.
There is an intriguing detail about SAIC and its SCIFs buried in Tenet's acknowledgements in At the Center of the Storm, his book about his experiences with the Bush administration: "Arnold Punaro of SAIC graciously provided me with a secure workspace to review and work with classified material," Tenet wrote. Punaro is identified on the SAIC Web site as the company's executive vice president for government affairs, communications, and support operations, as well as general manager of its Washington operations. Getting use of such a secure room is no small feat. To prevent eavesdroppers from picking up top-secret conversations, a typical SCIF has film on the windows, walls fitted with soundproof steel plates, and white-noise makers embedded in the ceiling. Punaro must have had approval from SAIC and the CIA to allow Tenet such access.
SAIC describes itself, in the opening lines of its 2008 annual report, as “a provider of scientific, engineering, systems integration and technical services, and solutions to all branches of the US military, agencies of the US Department of Defense (DoD), the intelligence community, the US Department of Homeland Security (DHS) and other US Government civil agencies, state and local government agencies, foreign governments and customers in selected commercial markets.” SAIC’s private operatives, the company says, work with U.S. defense and intelligence agencies to "build an integrated intelligence picture, allowing them to be more agile and dynamic in chaotic environments and produce actionable intelligence."
SAIC ACTION REPORT. SAIC operates many of the Predators flown by the U.S. military over the skies of Iraq and Afghanistan. These unmanned drones have become the most lethal weapons in the U.S. arsenal. Here, from SAIC’s Fall/Winter 2006 in-house magazine is the company’s report: SAIC's Predator Operations Support:
On July 27, 2006, Taliban extremists gathered inside a building in Kandahar, Afghanistan, possibly to plot a terror strategy against US forces. In Iraq, enemy forces traveled in a vehicle near Ramadi, the southwest tip of the Sunni Triangle. Both targets were spotted by Predator unmanned aerial vehicles (UAVs) flying above. More than 7,000 miles away at the Predator Operations Center in Nevada, Air Force pilots launched the Predators' Hellfire missiles — destroying the building in Kandahar and the vehicle near Ramadi, according to a US Central Command Air Forces airpower summary.
Both the pilots flying the Predators and the military analysts who identify threats rely on SAIC for 24-hour/7-day-a-week technical support at the Nellis Air Force Base Predator Operations Center. SAIC helps ensure that analysts have current intelligence to identify, select, track and evaluate enemy targets. In fact, Predator has been credited with dramatically shortening the sensor-to-shooter cycle — the time between target identification and attack — from hours to minutes.
SAIC also helps ensure that analysts have current threat tracks to protect the Predator from possible enemy retaliation…SAIC works to help ensure that the network circuits delivering all of these operate with little interference. Predator is also known for its highly accurate targeting. SAIC experts helped by writing software that extracts the Predator's telemetry data and places it on maps for the air defense and route planning functions. In addition, SAIC created chat-room robots to monitor mission-relevant conversations and record them in time-stamped sequence to establish the decision timeline for post-mission analysis. According to an SAIC white paper, U.S. senior decision makers have used these logs to ascertain "ground truth" for vital missions. (Bold emphasis in original.)
WEBSITE. Go to SAIC’s website and you’ll hit one of four possible opening screens: SAIC’s involvement in “health solutions” (definitely not national health care); protecting “critical infrastucture” (with a photograph of a key facility, maybe a nuclear power plant, behind); “integrating sustainable environmental solutions” (an iceberg); and, finally, “Supporting National Security Efforts: SAIC provides scientific, engineering, technical services and products to the Warfighter.” The accompanying photo is of a humvee in a cargo container—a symbol of the protracted ground war that has marked the U.S. invasion of Iraq.
But Iraq is hardly the only source of SAIC’s profits from national security. According to its website: “We are a leading provider of scientific, engineering, systems integration and technical services and products to all branches of the US military, agencies of the US Department of Defense (DoD), the intelligence community, the US Department of Homeland Security (DHS) and other US Government civil agencies. …SAIC's national security efforts reach across all branches of the military and support the full spectrum of military operations – from peace keeping and humanitarian missions to major conflicts. SAIC also helps the Department of Defense, the FBI, and other agencies combat terrorism, cybercrime, and the proliferation of weapons of mass destruction.”
SAIC describes its key contributions to national intelligence as follows:
“New Directions in Information Sharing. In response to an Executive Order from the president, our systems integration experts helped prepare a plan for an information-sharing environment to strengthen the intelligence community's ability to find, track and stop terrorists. The efforts of our employees garnered letters of appreciation from President Bush.
“Information Processing and Analysis. We also strengthened our own capabilities in this critical area with the acquisition of Object Sciences Corporation. OSC provides key technical support to the Information Dominance Center, the premier intelligence test bed for new technologies and concepts developed for the US Army's Intelligence and Security Command (the NSA’s Army unit). The Information Dominance Center has helped reshape how intelligence, surveillance, and reconnaissance (ISR) information is processed and analyzed, and has provided critical assistance to the warfighter in the overall global war on terrorism. …
“Central Management, Regional Delivery: To improve information sharing and IT support to regional combatant commands, services and agencies, SAIC is playing a key role in transforming the intelligence IT infrastructure. We are helping transform the DoD Intelligence Information System architecture to a centrally managed and regionally delivered IT infrastructure. Regional service centers will provide common mission support capabilities to intelligence users at all levels of command. The benefits of this approach include better access to emerging technologies and tested business practices, and better use of limited resources. Better Access to Geospatial Intelligence…
“A new tool on the front line in Iraq—biometrics—has helped military personnel identify builders of improvised explosive devices (IEDs), potentially saving the lives of civilians and soldiers alike. SAIC played a key role in developing the portable Biometric Automated Toolset (BAT), used by soldiers on patrol and base security personnel to access fingerprint, iris and facial scans. SAIC provided operational support for the system, which is now deployed in Iraq and Afghanistan. Our efforts also helped the US Coast Guard target and track multiple networks of suspected terrorists and smugglers. For the Coast Guard Intelligence Coordination Center, an SAIC team developed a new 'holistic' approach to analyzing disparate intelligence information. Those efforts provided actionable intelligence that led to a number of arrests and deportations.”
CorpWatch Analysis
COUNTING ON CONTRACTING. SAIC calls itself a government “pure-play” – a Wall Street term that refers to a company that focuses on a single market. In SAIC’s case, that market is the U.S. government, which is responsible for 93 percent of the company’s sales. Most of its revenue, 75 percent, comes specifically from national security contracts, and intelligence is a key part of this business. In 2007, SAIC won 17 major government contracts, each worth at least $100 million. “Our internal revenue growth for fiscal 2008 was favorably impacted by increased activity on a number of new and continuing programs in our intelligence, defense, and homeland security business areas,” retired Army Gen. John D. Thomas, SAIC’s senior vice president and general manager of Operations, Intelligence and Security, said in a prepared statement.
SAIC sees a bright future for itself: 40 percent of the federal work force is expected to retire between 2007 and 2012. The government “must outsource as a means of survival,” Kenneth C. Dahlberg, SAIC's chairman and chief executive, assured investors in a 2007 conference call. Because the federal government “must deliver safety to the people,” Dahlberg added, the market for government outsourcing is likely to increase three to five percent a year well into the decade.
Much of this growth is expected in intelligence. As SAIC notes in its 2008 annual report, “Our reputation and relationship with the US Government, and in particular with the agencies of the Department of Defense (DoD) and the US intelligence community, are key factors in maintaining and growing revenues under contracts with the US Government…The US Government’s increased spending in recent years on homeland security, intelligence, and defense-related programs has had a favorable impact on our business in fiscal 2008, 2007, and 2006. Our results have also been favorably impacted by the US Government’s increased spending on information technology (IT) outsourcing and other technical services.”
FINANCES. SAIC’S government segment revenues increased $881 million, or 12 percent, in fiscal 2008 to $8.3 billion, including internal revenue growth of 8 percent. The increase in the intelligence business area was due to new program wins and higher levels of activity on existing programs, including certain classified and operational intelligence programs in fiscal 2008.
HISTORY. SAIC was founded by J. Robert “Bob” Brewster, a nuclear physicist who had worked at the Los Alamos National Laboratory in the 1950s. In 1957, Brewster went to work for General Atomics, a nuclear research company that was later sold to Gulf Oil. In 1969, dissatisfied with the oil business and Gulf’s plans for its subsidiary, Brewster founded SAIC as a consultant to Los Alamos and other federal labs. From the start, the company’s stock was owned and sold by its own employees—a practice that helped motivate workers to increase revenues and profits, but also allowed the company to avoid filing public reports with the Securities and Exchange Commission (it went public in September, 2006). In 1970, SAIC set up a branch office in Washington, D.C. to solicit work from the government. Twenty years later, on the strength of Pentagon contracts involving submarine warfare and missile defense and work for the Federal Aviation Administration and other agencies, SAIC revenues surpassed the $1 billion mark.
FORMER HIGH-RANKING OFFICIALS. SAIC employs large numbers of former CIA officials. Leo Hazlewood, the senior vice president for SAIC’s Mission Integration Business Unit, which works with the NGA, joined the company in 2000 after a 23-year career with the CIA. His positions there included comptroller, director of the National Photographic Interpretation Center (later merged into the NGA) and deputy director for Operations. Other former high-level CIA officials working for SAIC include Chief Technology Officer Andy Palowitch, who previously served as director of the CIA’s Central Intelligence Systems Engineering Center, and Vice President for Corporate Development Gordon Oehler, who retired from the CIA in 1997 after 25 years, including a stint as director of the CIA’s Non-Proliferation Center. That center was also an area where SAIC held contracts. Peter Brookes, a senior fellow for national security affairs at the conservative Heritage Foundation, was detailed to the CIA’s NPC to work on issues related to arms control, treaties, and the proliferation of weapons of mass destruction while working for SAIC. Other former CIA officials who have worked for SAIC in the past include John M. Deutch, President Clinton’s second CIA director, and Rear Adm. Bobby Ray Inman, the CIA’s former deputy director. Both men served for a time on SAIC’s board of directors.
KEY ROLE IN THE US “WAR ON TERROR.” SAIC plays a critical role in U.S. military operations in Iraq through a key institution created to expand the reach of intelligence into military operations: the Joint Intelligence Operations Centers (JIOC).
The JIOC link the Pentagon’s nine Unified Combatant Commands and U.S. Forces in Korea with the Office of the Director of National Intelligence. These centers were formally established in April 2006 by Undersecretary of Defense for Intelligence Stephen Cambone, after his office completed a year-long study of the defense intelligence system. These linked organizations have become the domain—and a major profit center—for SAIC.
The JIOC is jointly controlled by the Defense Intelligence Agency and the Office of the DNI. They are designed to integrate DoD intelligence with traditional military operations and functions, with the ultimate aim of increasing the speed, power, and combat effectiveness of U.S. military forces. The Department of Defense describes them as the “fulcrum” of a worldwide group of joint intelligence organizations that gather, interpret, and act on information collected by the DIA and its sister agencies, the NSA, NGA, and NRO. During their first 18 months in operation, the JIOC was commanded by Lt. Gen. William G. Boykin, the deputy under secretary of defense for intelligence. Boykin is an evangelical Christian who stirred controversy in 2003 by making outlandish, anti-Muslim remarks. The White House mildly reprimanded him for referring to the U.S. battles in Afghanistan and Iraq as part of a broader war against “a guy named Satan.”
(Despite his views, Boykin is highly respected within the intelligence community for his long military experience, which has included service in Vietnam, Grenada, Somalia, and Iraq. “What we're trying to do is move toward operationalizing intelligence,” he said in a Pentagon press briefing on the JIOC in April 2006. In a speech later that year to a conference on geospatial intelligence, Boykin described the JIOC as "coordinated, synergistic efforts" that are "running intelligence as an operation.")
Many details of the JIOC system are classified. But the first operational tests of the concept may have taken place in January, 2007, when commandos from the Pentagon's Joint Special Operations Command launched air strikes against Al Qaeda bases and personnel in Somalia, where the U.S.-supported Ethiopian army had routed an Islamist government that had sheltered the terrorist Al Qaeda army. The attacks, carried out by Air Force C-130 gunships, were guided in part with intelligence supplied by the CIA and the NSA. If public descriptions of the joint intelligence system are to believed, the intelligence would have flowed out of the JIOC, the highest level command for sharing military intelligence. The JIOC in Iraq, meanwhile, is serving as a "template" for other new centers around the world and, according to the DNI, is “beginning to benefit operations down to the battalion level.”
As the JIOC becomes institutionalized within the military, Pentagon documents show, they will slowly morph into the larger Global Information Grid, which will eventually include the Distributed Common Ground Systems being built for the armed services by Raytheon and other companies, using standards set by both the Department of Defense and the Director of National Intelligence. And from the beginning, Pentagon officials have stressed that the JIOC take its orders from the DNI.
In his April 2006 briefing, for example, Gen. Boykin explained that DIA Director Michael Maples, will “take requirements” for the JIOC directly from Deputy Director of Intelligence for Collection Mary Margaret Graham, and pass them down to the Combatant Commands, thus creating “an unprecedented level of access to these commands” for the civilian directors of national intelligence. As a result of this direct interface, Boykin explained, analysts working out of the JIOC will draw from the dozens of databases maintained by the NSA and NGA without having to go through their respective chains of command. “What we’re trying to do is create a situation where the analyst is talking to the collector and there’s no filter in the middle,” he said. That’s a perfect job for a contractor, particularly one that is as closely integrated with defense intelligence as SAIC.
In 2005, a few months after the JIOC was launched by Cambone’s office at the Pentagon, SAIC was hired by the U.S. Army as operations manager of the JIOC-Iraq under a two-year, $110 million contract. Since then, according to an SAIC briefing for investors in May 2007, the company has signed similar contracts for the JIOC established at the other major commands (SAIC is also involved as a contractor in the construction of the Global Information Grid, and is “helping achieve the netcentric warfare mission” at the Defense Information Systems Agency, according to the briefing).
An in-house SAIC publication describes the JIOC in Iraq as a “large interactive data repository that allows analysts to pull in information from a wide range of sources,” including imagery and visualization tools. SAIC’s Intelligence and Security Group, which manages the JIOC, had roughly 300 to 500 people overseas working at the centers. SAIC provides more details in its 2007 annual report to shareholders. The JIOC-Iraq, it says, draws on SAIC’s ““Biometric Automated Toolset,” a portable system that records an individual’s unique characteristics for iris, fingerprint, and facial recognition; JIOC analysts use the toolset to “break up terrorist cells and track and capture the enemy.” SAIC has also worked with the Army to “transition” the JIOC-Iraq capabilities into the Distributed Common Ground System. It’s all in a day’s work for SAIC, which is one of the most ubiquitous companies in the intelligence industrial complex.
Recent Contracts/Events
In June 2008, SAIC was awarded a prime contract by the Defense Advanced Research Projects Agency (DARPA) to develop a “synergistic human/machine system to help military officers and their staffs quickly make command decisions and generate multiple options on the battlefield.” The two-year contract is worth $42 million.
Sources:
Primary sourcing for this profile came from Tim Shorrock, ''Spies for Hire: The Secret World of Intelligence Outsourcing'' (Simon & Schuster/2008), company information, and other sources as follows:
[1] “SAIC team wins National Security Agency Trailblazer contract,” SAIC press release, October 21, 2002.
