Serco: Turning Things Around With a Focus on IT and AI

Landing on the BGOV200 at #95, Serco won $645 million in federal contracts in FY18.

When Serco CEO Dave Dacquino took over two years ago, it was no secret that the company needed a change of direction. With a tendency to play it safe, Serco wasn’t pulling in the innovative and exciting projects it was capable of handling. Dacquino focused on leveraging strategic use of IT, including artificial intelligence, as a centerpiece of high-touch service offerings.

“We are a people and services company and we have a large portfolio in civil and defense,” Dacquino says. “While it’s a broad portfolio, we were able to leverage some capabilities like IT and AI across that portfolio. That, I believe, is the key to our success.”

The strategy resulted in a slew of noteworthy new work in government contracting. In January 2018, Serco won a $600 million contract to support FEMA disaster recovery work in the central U.S., and in June it successfully recompeted on a $900 million contract to determine health insurance customer eligibility for CMS. A range of 2018 military contracts includes $213 million to deliver technical support to the Navy; $51 million for close-in weapon system installation support for the Navy, Army, and Coast Guard; $43 million for global acquisition and logistics operations support for Army Sustainment Command; and $232 million for delivering technical services to Naval Facilities Engineering Command. Overall in 2018, Serco had $1.7 billion in new bookings.

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Following in 2018’s footsteps, 2019 is off to a strong start for the company, with a 72% win rate on new work and 96% win rate on recompetes. New contracts this year include $200 million for case management and process automation for the Pension Benefit Guaranty Corporation; $50+ million in task orders for FEMA program support; and a $30 million recompete win to provide motorist assistance to Louisiana DOT. Serco’s military contracting continues to be robust, with $82 million to assist in implementing an integrated workplace management system for the Air Force; $76 million to provide logistics, operations, and contingency planning for the U.S. Air Force Central Command; and $53 million to support anti-terrorism force protection systems for the Navy.

“Our wins were very significant in the last year,” Dacquino says. “We surprised a lot of people.”

One of those surprises is Serco’s recently announced $255 million acquisition of Alion’s naval systems business to strengthen Serco’s provision of end-to-end maritime solutions. The move doubles down on Serco’s emerging focus on engineering and logistics support.

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