SAIC considering options after contract canceled

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Editor’s Note: The print version of this story, which will appear in the Nov. 12, 2018, edition of the Charleston Regional Business Journal, incorrectly states the amount of a contract award. SAIC secured a $145 million initial production contract to build an additional 22 amphibious assault vehicles, which later increased to a total of 392 vehicles. This version has the corrected figures.

A Lowcountry defense contractor will no longer build vehicles designed to protect Marines after the Marine Corps canceled the contract.

Robert Carruthers, an official with Science Applications International Corp., said the Marine Corps decided to instead invest funding into a newer vehicle program, forgoing efforts to modernize the decades-old amphibious assault vehicles.

“We were disappointed by the Marine Corps’ decision, but we understand their strategy,” said Carruthers, SAIC’s vice president of platform integration.

What happened

In 2015, McLean, Va.-based SAIC secured a $194 million contract to design and build 10 prototypes of the amphibious assault vehicles at its Hanahan facility.

The large tanklike vehicles can be used on land and water. They have been used in overseas conflict zones since the 1970s, but the use of improvised explosive devices in the U.S. wars in Iraq and Afghanistan in the 2000s revealed vulnerabilities on the underside of the vehicles, necessitating an upgrade.

Officials unveiled the new model to a cheering crowd during a 2016 news conference in Hanahan. The work done on the prototypes led to SAIC’s winning the $145 million initial production contract to build an additional 22 vehicles, which later increased to a total of 392 vehicles.

The contract prompted SAIC to invest $26 million into building a new facility at North Point Commerce Park in Hanahan to support vehicle production. The company also planned to create 200 jobs over the next five years.

The company had delivered 10 prototype vehicles and four additional amphibious assault vehicles when the Marine Corps then announced its decision in September to cancel the SAIC contract, halting future production, Carruthers said.

The Marines Corps opted to invest in amphibious combat vehicles instead. The combat vehicles are also tanklike and can operate on land and water, but they have a stronger engine and more room inside for Marines and crew members. BAE Systems won the full production contract for the amphibious combat vehicles program.

What’s next

Carruthers said SAIC is evaluating what to do with the new Lowcountry facility, which is currently under construction.

“We’re doing the math right now to see what makes the most sense based on our current work and our anticipated work. … The building is still going up,” Carruthers said. “We’re just deciding how that program will affect us and whether it makes sense to do something else with it, put other programs in it or whatnot.”

More than 250 people in the Lowcountry were working on the amphibious assault vehicles. Some are completing work on partially finished vehicles; 39 employees received layoff notifications this month; and the rest have been moved to other programs in the Lowcountry.

“We are disappointed,” Carruthers said. “We don’t want to lay anyone off, but we’ve been quite successful, given the large amount of work we have in Charleston, moving people onto other programs.”

The defense contractor employs about 900 people in the Lowcountry and operates facilities at 5617 N. Rhett Ave. in North Charleston and 7410 Magi Road in Hanahan.

Employees work on various defense contracts, including integration and engineering work; installation of radios and other command-and-control systems; and work on mine-resistant, ambush protected vehicles — essentially, armored trucks.

SAIC has secured nearly $1 billion in contracts from the Marine Corps, Army and Navy this year in the Charleston area, including a five-year, $597 million Navy contract for SAIC to provide engineering and integration support to the Space and Naval Warfare Systems Center Atlantic.

SAIC is competing for another vehicle, which could move into the new facility and prevent some layoffs, if SAIC is awarded the contract. The bid is on the mobile protective firepower vehicle, a tanklike vehicle used to support Army infantry in the field.

The contract, which involves building 12 prototype vehicles, will be awarded to two companies this month. The Army will then decide on one company for the full contract, which will involve building 500 vehicles.

“We still have a very robust portfolio. We’ve had a very good year for (contract) awards and we continue to hire quite a few people,” Carruthers said. “We never like to see something like that, but it really hasn’t slowed down our momentum — in our strategy or our growth — in the area.”