Leidos CEO says lack of new DOD leadership is slowing procurement process

By Marjorie Censer / May 4, 2017 at 2:38 PM

The sluggish pace of appointments in the Pentagon is delaying procurement decisions and deadlines, according to the chief executive of Leidos.

In a call with analysts Thursday, Roger Krone said Leidos has "seen more slowness than we expected in the acquisition organizations of our customers, due in part to the slow pace of executive leader appointments and budget uncertainty."

As a result, the company has seen "a delay in the procurement process award decisions." Additionally, "procurement deadlines have been slipping to the right," Krone said.

He pointed to the Pentagon as an example, but said other agencies are in a similar position.

"The Department of Defense has one confirmed person and that would be the secretary of defense," Krone said. "There are now identified candidates for some of the service secretaries and the deputy secretary of defense."

Leidos on Thursday reported sales in the company's most recent quarter reached nearly $2.6 billion, up from $1.3 billion during the same three-month period the prior year. The company last year acquired Lockheed Martin's IT services business.

Leidos reported quarterly profit reached $72 million, up from $53 million last year. The company's defense solutions business saw quarterly sales reach $1.3 billion, up 66 percent from the prior year because of the addition of the Lockheed business.

Krone also announced Thursday that John Fratamico, who had led the company's advanced solutions group, has been named chief technology officer.

Michael Chagnon has been named president of the advanced solutions group. He has spent close to three decades at Leidos and its predecessor Science Applications International Corp.