By washingtonpost |
Nazzic Keene to lead SAIC as Tony Moraco announces retirement
Nazzic Keene joined SAIC in 2012 and rose through the ranks to become chief operating officer. She is to become chief executive when long-time CEO Tony Moraco retires. (Photographer: James Ward/(James Ward))
By Aaron Gregg
Reporter covering the defense industry and government contractors.
Email Bio FollowMarch 15 at 5:48 PM
The top job at one of the Washington area’s most influential government services companies will soon change hands, as chief executive Tony Moraco prepares to hand the reigns to the company’s second-in-command, chief operating officer Nazzic Keene.
Moraco will retire as of July 31, the company said in an announcement, capping a six-year run as chief executive. Moraco became CEO in 2013 and saw the company through a period of financial and political turmoil, as federal defense spending cuts from the sequestration process hamstrung numerous government services firms for years.
Keene joined SAIC in 2012 after serving as a top manager at CGI, another large government contractor. She climbed the ranks at SAIC to become chief operating officer, helping steer the company through a high-profile spin-off in 2013, in which it effectively split in two and created another $4 billion unit that is now known as Leidos.
More recently she has helped oversee a merger with another government contractor called Engility. That acquisition brought the company deeper into the space and intelligence services markets when it closed in late January, giving the company a degree of scale that should help it stand out in an increasingly commoditized IT services market.
“That diversification I believe sets us apart a bit from everybody else,” Keene said in an interview Friday. “We want to continue that strategy to continue to drive profitable organic growth for SAIC for months and years to come.”
Keene is also the latest woman to become the head of a large, publicly-traded defense contractor over the last two years, a surprising shift in a national security sector long dominated by men.
[Does another woman in charge signal a cultural shift in the defense industry?]
Today, four of the five largest U.S. weapons-makers are run by women.
Lockheed Martin, the world’s largest defense contractor, is led by Marilyn Hewson. Phebe Novakovic became chief executive at General Dynamics after serving in the Pentagon and CIA.
And a handful of new appointments in the past few years have further diversified the ranks: Leanne Caret became head of Boeing’s Arlington-based defense business in 2016; Lynn Dugle led Engility before it sold to SAIC last year; and Kathy Warden became chief executive of Northrop Grumman last summer.
“I’m incredibly proud that women are getting seats at the table,” Keene said. “I certainly appreciate being a role model for women in our industry as well as men in our industry.”
Like Moraco did, Keene will take over SAIC at a time of tremendous uncertainty. This year started off with a five-week government shutdown that sapped an estimated $10 million each week from the company at a time when it was trying to complete a high-stakes merger.
[SAIC executives reassure investors over shutdown woes as $2.5 billion merger sails through]
The company sits in an industry niche where contracts tend to be re-competed often; SAIC’s average contract lasts about five years, Keene said Friday. And many of the company’s peers are gobbling up smaller companies in search of greater scale, allowing them to outbid their competitors on major procurements.
“A company like Engility basically has two choices; become the hunter or become the hunted,” said Loren Thompson, a defense industry consultant. “SAIC is in a low-margin business in which contracts are renewed much more frequently than if they were making military hardware...the risks are higher and the only insurance you get is to be as big as possible with as many customers as possible.”
[Defense mergers and acquisitions keep pace in 2019]
Keene said SAIC’s acquisition of Engility gives it more than just scale, however. The acquisition brings it a lot of new business with the intelligence community, she says, as well as a substantial foothold in the military space industry at a time when space-based systems are receiving a lot of attention from top Pentagon leadership.
In late February President Trump signed a long-awaited directive to create a new “Space Force" under control of the Air Force.
“The interest in space and the critical nature of securing the space domain gives us a little bit of budget protection,” Keene said, though she added that budget uncertainty has continued to cause “angst and noise in the system."
[Here are the companies that could benefit from Trump's Space Force]