Leidos wins TSA logistics contract

Rhea-AI Summary

Leidos (NYSE:LDOS) has secured a follow-on checkpoint sustainment contract with the Transportation Security Administration (TSA) worth up to $2.6 billion over an eight-year period. The contract involves maintaining 12,000 units of Transportation Security Equipment across more than 430 airport locations in the U.S. and its territories.

Under the agreement, Leidos will collaborate with original equipment manufacturers to ensure high operational availability through preventive, corrective, and depot maintenance. The company will provide program management, contractor logistics support, supply chain risk analysis, TSA service response center oversight, and IT infrastructure development.

Leidos maintains a dedicated system supporting field service technicians, capturing metrics, and utilizing predictive analytics through their Trusted Mission AI to support screening system availability. The company has been supporting TSA's passenger screening mission with integrated logistics since 2013.

Positive

• Secured $2.6 billion contract with TSA
• Eight-year contract duration providing long-term revenue visibility
• Continuation and expansion of existing TSA relationship since 2013

Negative

• None.

Insights

Government Contracts Analyst

This $2.6 billion TSA contract win represents a significant victory for Leidos, reinforcing their dominant position in government security infrastructure. The 8-year duration provides substantial revenue visibility and strengthens their recurring revenue base, which is particularly valuable in the current market environment where predictable cash flows are highly prized by investors.

Several key aspects make this contract particularly noteworthy: First, the scale of operations covering 12,000 equipment units across 430+ airports creates significant barriers to entry, protecting Leidos from potential competitors. Second, the integration of predictive analytics and AI capabilities demonstrates Leidos's technological edge in modernizing critical infrastructure maintenance.

The contract's value translates to approximately $325 million annually, representing about 2.5% of Leidos's annual revenue. While this may seem modest relative to their total revenue, the strategic importance lies in: 1) The contract's high-margin nature due to established infrastructure and expertise 2) The potential for additional service expansions as air travel grows 3) The strengthening of Leidos's position for future government contracts in critical infrastructure maintenance.

The continuation of this relationship since 2013 validates Leidos's execution capabilities and suggests strong customer satisfaction, which is important for securing future government contracts. The inclusion of supply chain risk analysis and IT infrastructure development components indicates potential for scope expansion and additional revenue opportunities beyond the base contract value.

RESTON, Va., Jan. 23, 2025 /PRNewswire/ -- Leidos (NYSE:LDOS) today announced a follow-on checkpoint sustainment contract to maintain 12,000 units of Transportation Security Equipment (TSE) deployed at more than 430 airport locations in the U.S. and its territories. The contract was awarded for the Transportation Security Administration's (TSA) Deployment and Security Division. The contract has an eight-year period of performance and a maximum value of $2.6 billion.

"As air travel volume continues to grow, ensuring fast and frictionless TSA checkpoints will only become more important," said Roy Stevens, Leidos National Security Sector president. "Leidos will draw on our decades of expertise in predictive analytics, cybersecurity, and logistics to continue to provide exceptional mission support to TSA."

Under the contract, Leidos will work with original equipment manufacturers to maintain high TSE operational availability and other key operational metrics via preventive, corrective, and depot maintenance. Leidos will provide services including program management, contractor logistics support, and supply chain risk analysis along with TSA service response center oversight and TSA IT infrastructure development and maintenance.

To support TSA's mission, Leidos maintains a dedicated system to support field service technicians, capture metrics, perform predictive analytics, and leverage the capabilities of Leidos Trusted Mission AI to support screening system availability. Leidos has supported TSA's core passenger screening mission with integrated logistics since 2013.

About Leidos

Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with 48,000 global employees, 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:

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

Greg Hellman
(571) 526-7592
greg.hellman@leidos.com

 

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SOURCE Leidos Holdings, Inc.

FAQ

What is the value of Leidos (LDOS) new TSA contract?

The TSA contract has a maximum value of $2.6 billion over an eight-year period.

How many airport locations will LDOS service under the new TSA contract?

Leidos will maintain equipment at more than 430 airport locations across the U.S. and its territories.

How many TSA security equipment units will LDOS maintain under the contract?

Leidos will maintain 12,000 units of Transportation Security Equipment (TSE).

What services will Leidos (LDOS) provide under the TSA contract?

Leidos will provide program management, contractor logistics support, supply chain risk analysis, TSA service response center oversight, and IT infrastructure development and maintenance.

How long has LDOS been supporting TSA's passenger screening mission?

Leidos has been supporting TSA's passenger screening mission with integrated logistics since 2013.