SAIC Inc. Annual Report 2004

FY2004 Annual Report · SAIC Inc.

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35Years

of Employee Ownership

S A I C 2 0 0 4 A N N U A L R E P O R T

s a i c . c o m

T A B L E O F C O N T E N T S

SAIC at 35
Message to Stockholders
Federal Business Solutions
Research and Intelligence
System and Network Solutions
Transformation, Test, Training and Logistics
Naval Engineering and Technical Services
Enterprise and Infrastructure Solutions
Homeland Security

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4
7
8
12
16
20
24
28

Commercial IT and Telecommunications
Solutions
Commercial IT and Professional Services
Telecommunications
Employee Ownership
Team SAIC
Founder’s Message
Board of Directors

35
36
42
46
48
50
52

A35Years

of Employee Ownership

T A B L E O F C O N T E N T S

2
4
7
8
12
16
20
24
28

Commercial IT and Telecommunications
Solutions
Commercial IT and Professional Services
Telecommunications
Employee Ownership
Team SAIC
Founder’s Message
Board of Directors

35
36
42
46
48
50
52

A35Years

of Employee Ownership

S A I C A T 3 5

“It is really our people who have

made this company a success

and who will continue to make

the difference in the future.”

– Dr. J. Robert Beyster
SAIC Founder

Thirty-five years of quality service to our customers.
Hundreds of thousands of successful contract deliverables.
And 43,000 employees who make a difference for our
customers and our world.
On our 35th anniversary, it is appropriate to look back
on our many proud accomplishments and look forward to
our exciting future.
We won our first contract – helping analyze nuclear
weapon effects – based on the expertise of our founder,
Dr. J. Robert Beyster, a nationally recognized nuclear
physicist. Our nuclear physicists quickly found other uses
for their knowledge and expertise beyond national secu-
rity work and undertook projects for the nuclear energy

industry (risk assessments and plant safeguards) and the
health care community (radiation treatment for cancer).
In the years that followed, our commitment to help
our customers took us in directions we never could have
foreseen. We recruited specialists from a wide array of
technical disciplines and brought them together in multi-
disciplinary teams to solve customer problems. At the time,
this was a novel approach. Our staff explored an astonish-
ing number of new technologies. SAIC quickly gained a
reputation for its willingness to try novel solutions and its
ability to solve some of our customers’ toughest problems.
Hearing of our reputation, customers from many other
fields recruited SAIC to help solve their most difficult
problems. Recovering from the nuclear accidents at Three
Mile Island and Chernobyl. Remediating the Prince William
Sound oil spill and the Love Canal hazardous waste site.
Developing the nation’s first high-level nuclear waste
repository at Yucca Mountain. Working to create vaccines
for AIDS, malaria, and SARS.
Our list of accomplishments is extraordinary. Inte-
grating a worldwide medical information system for all
Department of Defense medical facilities. Providing critical
policy support and analysis for the Intermediate-Range

Nuclear Forces (INF) treaty. Integrating the most realistic
battlefield training center in the world at the U.S. Army’s
National Training Center. Providing critical technical
support for the Space Shuttle, the International Space
Station, the Mariner 9 mission to Mars, and the Voyager
mission past Jupiter and Saturn. Integrating many of the
most important command and control centers for the U.S.
military. Developing breakthrough technologies for signals
analysis and image exploitation. Creating innovative
technologies for the 1987 America’s Cup winner, Stars
& Stripes. Providing crucial engineering support for the
TRIDENT submarine, cruise missile program, and so many
more critical programs.

“For 35 years, the company has not wavered from its

initial commitment. Our employee owners are proud of
what they have been able to accomplish through their
hard work, steadfast dedication, and perseverance in
our commitments to our customers,” says SAIC CEO Ken
Dahlberg.

“Employee ownership has been a major discriminator
and reason for our success. Today, the same principles are
governing and guiding our company as we embark upon
our next 35 years in the company’s evolution.”

2
2

S A I C A T 3 5

“It is really our people who have

made this company a success

and who will continue to make

the difference in the future.”

– Dr. J. Robert Beyster
SAIC Founder

“For 35 years, the company has not wavered from its

2
2

M E S S A G E T O S T O C K H O L D E R S

Bill Roper, Duane Andrews, John Warner, Ken Dahlberg, Matt Desch, Tom Darcy, and Randy Walker

Our senior management team from left to right:

This is a time of transition both for SAIC and our country.
The economic, business, and political landscapes have
undergone dramatic change since September 11, 2001.
SAIC and its customers face new challenges that require
different ways of thinking.
At SAIC, we are responding with new strategies to
support our current and future customers’ needs. We are
using our subject matter expertise, technology, innovation,
systems integration skills, and strong program manage-
ment to develop next generation systems to meet our
customers’ requirements. As SAIC’s new Chief Executive
Officer, I am proud to be the one chosen to lead SAIC.
SAIC has what it takes to succeed in these difficult
times thanks to the vision and hard work of SAIC’s found-
er, Dr. J. Robert Beyster. He built a company renowned
for its creativity, innovation and entrepreneurship. He
endowed SAIC with an extraordinarily talented team of
employees. He created an employee ownership system to

motivate and reward excellent performance that benefits
our customers.
Our sights are set clearly on the future. Both our cus-
tomers and employees look to SAIC to help them build a
better future.
My job is to build upon the excellent resources we
already have and focus us in ways that can best meet
our customers’ needs and drive continued SAIC growth.
In other words, to direct SAIC’s energy, passion, and
commitment toward the future.
We have already taken important steps in these
directions.

Create a more customer-focused SAIC. During my
first months at SAIC, I asked our key customers how we
could do better. They said: make it easier to do business
with SAIC. We responded.

Three months after I joined SAIC and at the start of

Fiscal Year 2005, we reorganized the company into fewer,
more capable groups and business units that are focused
on and aligned with our customers and markets. This
enables us to better serve our customers.

For example, the wide-ranging work we do for intel-
ligence agencies – a top priority in fighting the global
war on terrorism and a major growth area for SAIC – has
been consolidated from several organizational units into
one.
As an added benefit, our new business units now
have the size, strength, and resources to compete better
for major contracts and to collaborate appropriately with
one another on larger systems integration opportunities.
Equally important, the realignment enabled our best

and brightest leaders to expand their skills by running
larger businesses that will accelerate career development.
Our new organization structure is customer-focused,
growth-focused, and leadership-focused.

Reinvigorate SAIC’s commitment to growth. On
February 1, the start of our Fiscal Year 2005, we outlined
a bold vision for SAIC’s future: double our company’s
value in five years or less.

SAIC has always been a growth-oriented company.
Through growth, we create better career opportunities for
employees, create a dynamic and exciting work environ-
ment, and generate opportunities for stock price appre-
ciation. Even with the challenging economic climate, we
achieved more than 50% revenue growth over the last
five years.

Today, it is important to reaffirm our commitment
to growth as we have in place the strategies to enable
stronger growth in the future.

Develop our next generation leaders. Having
spent 10 years as a program manager, I acquired a deep
appreciation of the importance of talking with customers
to truly understand what their needs are and then build-
ing a team to deliver on-target solutions.

I believe this kind of program management experience
is fundamental for those who will be our future company
leaders. We will give promising employees more mobility,
more rotation of assignments, and more program
management experience to develop our next generation
leaders.

Recommit to SAIC’s traditional values. Our
culture and employee ownership make SAIC unique.
Employee ownership has been a primary factor in SAIC’s
outstanding success. It has enabled us to retain our
objectivity and independence in developing innovative
solutions for our customers.
Our broad, deep technical expertise is a formidable
strength. It gives us an edge in winning hard-fought pro-
curement competitions – and in performing outstanding
work for our customers.
We have earned our customers’ trust year after year
through consistent high-quality performance and high
ethical standards. Our reputation in these areas is an
extraordinary legacy we must protect and strengthen.

To do so, we must retain the personal commitment of
employees at every level of SAIC and their dedication to
excellence and ethics.

Better serve federal government customers. By
consolidating our capabilities into fewer, more capable
organizational units, we strengthened our ability to offer
more end-to-end, integrated solutions such as the ones
we’re providing for the Department of Homeland Security,
the U.S. Army’s Future Combat Systems program, and
the DoD’s Guardian Installation Protection Program. The
latter contract, awarded shortly after our fiscal year end,
aims to provide better protection from weapons of mass
destruction for military installations worldwide.

By aligning our people and organizations with our
federal customers, we become part of their world. We
develop a deeper knowledge and understanding of their
operational requirements, synchronize better with their
operational tempo, and better anticipate new operational
needs. With our strong systems engineering and large-
scale integration skills, we develop new solutions, capa-
bilities, and technologies that make a real difference for
our customers.

Better serve commercial and telecommunica-
tions customers. Many of our prospective customers
are experiencing crisis and change driven by the need to
reduce costs, improve the return on their IT investment,
and deliver value to their customers and stockholders.
We responded by giving key clients – especially those in
the oil and gas, utilities, and telecommunications indus-

M E S S A G E T O S T O C K H O L D E R S

Bill Roper, Duane Andrews, John Warner, Ken Dahlberg, Matt Desch, Tom Darcy, and Randy Walker

Our senior management team from left to right:

Create a more customer-focused SAIC. During my
first months at SAIC, I asked our key customers how we
could do better. They said: make it easier to do business
with SAIC. We responded.

Three months after I joined SAIC and at the start of

Reinvigorate SAIC’s commitment to growth. On
February 1, the start of our Fiscal Year 2005, we outlined
a bold vision for SAIC’s future: double our company’s
value in five years or less.

Today, it is important to reaffirm our commitment
to growth as we have in place the strategies to enable
stronger growth in the future.

To do so, we must retain the personal commitment of
employees at every level of SAIC and their dedication to
excellence and ethics.

tries – new solutions that produced major cost savings.
By leveraging and applying our unique experience and
capabilities in science and engineering, managing large-
scale research and development efforts, complex supply
chain processes, and data analytics, we can provide dif-
ferentiation in the market and add business value for our
customers. We believe this demonstration of our commit-
ment to service and performance will help us maintain
strong long-term relationships with these key clients as
their industries improve.

Strengthen financial performance. I am proud of
our performance for Fiscal Year 2004 (FY04), particularly
as we celebrate the 35th anniversary of our company.
Our revenue climbed 14% to $6.7 billion. Our net income
jumped nearly 43% to $351 million, primarily due to
increases in our operating income and decreases in non-
operating expenses.

With a funded backlog of $4.2 billion, and cash and
marketable securities of $2.4 billion, SAIC is well posi-
tioned to continue its record of outstanding customer
service and successful growth into Fiscal Year 2005 and
beyond.

To our customers worldwide, I deeply appreciate your
business. We want to continue to earn your business by
exceptional performance and innovation. To our 43,000
employee owners, I am deeply grateful for your tireless
efforts and dedication to our customers. I am honored to
lead this remarkable company and look forward to even
greater success as we build our future together.

Ken Dahlberg
Chief Executive Officer and President

Revenues
Millions

2004 $6,720
2003 $5,903
2002 $5,771

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

Operating Income
Millions

2004 $540
2003 $499
2002 $432

Stockholders’ Equity
Millions

2004 $2,190
2003 $2,007
2002 $2,524

$1,000

$800

$600

$400

$200

Net gain on sale of
business units and
subsidiary common
stock

$3,000

$2,000

$1,000

’00

’04

’00

’04

’00

’04

Diluted Earnings per Share

2004 $1.86
2003 $1.21
2002 $0.08

Net Income
Millions

$2,000

2004 $351
2003 $246
2002 $19

Includes net gain or
loss after taxes on
marketable
securities and other
investments,
including impairment
losses

$1,000

’00

’04

’00

’04

Federal Government

Solutions

S A I C ’ S F E D E R A L B U S I N E S S T E A M

Federal Business President Duane Andrews (third from right) with Group Presidents (from left to right)
Larry Peck - Enterprise & Infrastructure Solutions; Don Foley - Research & Intelligence;
George Singley - Transformation, Test, Training & Logistics;
Carl Albero - Naval Engineering & Technical Services; and Mark Hughes - System & Network Solutions.

Ken Dahlberg
Chief Executive Officer and President

Revenues
Millions

2004 $6,720
2003 $5,903
2002 $5,771

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

Operating Income
Millions

2004 $540
2003 $499
2002 $432

Stockholders’ Equity
Millions

2004 $2,190
2003 $2,007
2002 $2,524

$1,000

$800

$600

$400

$200

Net gain on sale of
business units and
subsidiary common
stock

$3,000

$2,000

$1,000

’00

’04

’00

’04

’00

’04

Diluted Earnings per Share

2004 $1.86
2003 $1.21
2002 $0.08

Net Income
Millions

$2,000

2004 $351
2003 $246
2002 $19

Includes net gain or
loss after taxes on
marketable
securities and other
investments,
including impairment
losses

$1,000

’00

’04

’00

’04

Federal Government

Solutions

S A I C ’ S F E D E R A L B U S I N E S S T E A M

R E S E A R C H A N D I N T E L L I G E N C E

To provide our military with advanced integrated warfare systems, SAIC helps the Naval Air Systems Command

perform research, development, testing, and evaluation on Navy and Marines Corps aircraft. This includes developing

simulations – such as this simulated launch (below) of the F/A-18E SuperHornet from the USS Nimitz – to test new

aircraft flight control systems, safety systems, and aircrew training.

Working on the frontiers of advanced technologies, SAIC
integrates leading-edge technology services and products
for customers in the space, aeronautical, intelligence, and
information business areas. Our research and intelligence
expertise assists our national security customers by provid-
ing more capabilities to decision-makers and warfighters
to help save lives and prevent and shorten conflicts.

Intelligence
We help the military and the intelligence community
take advantage of the latest technologies to acquire and
process intelligence data, transform it into actionable in-
formation for decision-makers and warfighters, and share
and disseminate that information quickly and securely.
As the lead systems engineering and integration
contractor, we will play a critical role in developing the
U.S. Air Force Space-Based Radar system – a transforma-
tional system designed to provide extraordinary capability
to gain real-time information on any potential adversary,
locale, or theater. The system will track moving targets,
produce high-resolution radar images, and generate high-
resolution terrain information – even in very mountainous
areas – with the goal of striking targets in record time.
Unmanned aerial vehicles (UAVs), robots, and other
autonomous systems are becoming more important in
surveillance, reconnaissance, and intelligence gathering
– and SAIC is at the forefront of this transformation.
Over the last few years, we have amassed extensive
experience in requirements development, design, integra-
tion, testing, and operational deployment of several major
airborne systems, including the Global Hawk UAV, the
Tomahawk cruise missile, and SAIC’s own UAVs, such
as our rotary-wing Vigilante. Our expertise encompasses
the full gamut of disciplines necessary for autonomous
vehicles, including platform design, sensor payload design
and integration, signature management, and control
automation.

For example, we are building five Vigilante UAVs for
the U.S. Army and equipping them with payloads to assist

with current operations. To expand its capabilities, the
Army continues to actively seek ways to employ UAVs in
low-and-slow operations, which might subject them to
hostile fire, and in environmental conditions that could put
a manned platform at unacceptable risk.

In this effort, SAIC is building and testing the vehicles
and ground support equipment, developing an over-the-
horizon data link back to a remote location for real-time
payload data exploitation and mission management. We
are packaging all the equipment for delivery and deploy-
ment, training operators on how to operate and maintain
the system, and providing ongoing remote technical sup-
port for deployed operations.

To send robots on missions and into areas that are not
safe for humans – such as earthquake-damaged buildings,
chemical-spill sites, or terrorist-occupied buildings – new
technologies need to be developed. On a recent DARPA
program, SAIC demonstrated for the first time a system
of 100 heterogeneous robots, with communications and
intelligent software collaborating to map an unknown
building, detect and track an intruder, and guard an item
of interest.
As prime contractor for the National Security Agency’s
largest modernization program, our engineering,
integration, and processing capabilities help to keep NSA
on the leading edge of communications technology. For
example, we are integrating large-scale IT systems and
developing knowledge management tools to enhance
data processing.
Our operational support to decision-makers and those
who plan and execute intelligence missions is mak-
ing a difference in the global war on terrorism. During
Operation Iraqi Freedom, the elapsed time from target
identification to target actions took only a few minutes in
some cases as compared to a few hours during previous
conflicts like Operation Desert Storm. The latter conflict
relied heavily on people and equipment deployed in or
near the battle zone to process intelligence data.

In contrast, during Operation Iraqi Freedom, U.S.

R E S E A R C H A N D I N T E L L I G E N C E

To provide our military with advanced integrated warfare systems, SAIC helps the Naval Air Systems Command

perform research, development, testing, and evaluation on Navy and Marines Corps aircraft. This includes developing

simulations – such as this simulated launch (below) of the F/A-18E SuperHornet from the USS Nimitz – to test new

aircraft flight control systems, safety systems, and aircrew training.

For example, we are building five Vigilante UAVs for
the U.S. Army and equipping them with payloads to assist

In contrast, during Operation Iraqi Freedom, U.S.

(Below) To assist astronauts in training for activities performed in space, SAIC provides test safety support to NASA’s

Neutral Buoyancy Laboratory at the Johnson Space Center in Houston, Texas. By approximating weightless conditions,

the lab’s huge 40-foot-deep water tank allows crews to simulate assembly and repair tasks under conditions similar

to those encountered in space.

R E S E A R C H A N D I N T E L L I G E N C E

Air Force intelligence staff in the U.S. processed, exploited,
and disseminated intelligence collected by the U-2 aircraft
and Predator and Global Hawk unmanned aerial vehicles
deployed in Iraq. The U.S. intelligence staff quickly turned
the raw information into actionable intelligence for the
forward-based warfighters. This tactical approach – known
as “reachback” – was developed by the Air Force Air
Combat Command with significant support from SAIC.

Research
To help our customers solve complex technical problems,
our engineers and scientists conduct leading-edge
research and development in such areas as remote sens-
ing, space exploration, precision targeting, and missile
defense.
As one of the foremost research and development
companies in the United States, SAIC’s scientists have
explored and developed new technologies to assist NASA,
as well as the military, space and intelligence communi-
ties. In addition, we operate important government-owned
research support facilities.

For the U.S. Geological Survey, we operate and help

manage the EROS Data Center – the world’s largest
collection of remotely sensed landmass data and a pillar
of our efforts to understand our own planet. Our efforts
include developing, operating, and maintaining integrated
systems designed to process the massive volumes of
image data from earth resource satellites covering the
entire surface of the globe. On a typical day, roughly 1.4
terabytes of data arrive for processing, and over 250 giga-
bytes of data are provided to customers, who are studying
a wide variety of environmental issues such as land use
and global change.

For NASA’s human spaceflight program, we provide
safety, reliability, and quality assurance support for the
International Space Station and the Space Shuttle. For
example, in supporting NASA programs at the Johnson
Space Center in Houston, we play a key role in providing
for the safety of astronauts working outside the Space
Station and other orbiting spacecraft. SAIC’s efforts are
an important part of NASA’s work to return the Shuttle to
flight status.
Our researchers and scientists also work with military
customers to develop advanced technologies and greater
capabilities for our warfighters. For example, we help the
U.S. Army improve and demonstrate a precision strike
capability that enables warfighters to locate, identify, and
eliminate high-value moving targets. SAIC has supported
the Joint Precision Strike Demonstration (JPSD) program
since it began in 1992.
Under a new JPSD contract, SAIC assumes a lead role
in paving the way to future joint command and control
and precision strike systems. We develop prototypes,
put them in the hands of operational troops, and refine
the design and operational utility through continuous
feedback from users.

To better understand which bombing strikes are
effective and how, we brought a new technology to
the Defense Threat Reduction Agency. We developed a
counterforce “taggant” – in the form of nanocrystals
– that can be added to munitions to determine the origin
of the source. We also provide wide-ranging support to
improve missile defense capabilities. For example, we are
assisting the Air Force in developing an optical payload to
demonstrate on-orbit launch detection and tracking
of missiles.

“

SAIC provides round-the-clock support of rapid response requests from FEMA

and others in support of hazards and emergencies. They have become a highly

trusted source of land remote sensing information and service.”

James A. Sturdevant, Deputy Director, EROS Data Center, U.S. Geological Survey

(Below) To assist astronauts in training for activities performed in space, SAIC provides test safety support to NASA’s

Neutral Buoyancy Laboratory at the Johnson Space Center in Houston, Texas. By approximating weightless conditions,

the lab’s huge 40-foot-deep water tank allows crews to simulate assembly and repair tasks under conditions similar

to those encountered in space.

R E S E A R C H A N D I N T E L L I G E N C E

For the U.S. Geological Survey, we operate and help

“

SAIC provides round-the-clock support of rapid response requests from FEMA

and others in support of hazards and emergencies. They have become a highly

trusted source of land remote sensing information and service.”

James A. Sturdevant, Deputy Director, EROS Data Center, U.S. Geological Survey

S Y S T E M A N D N E T W O R K S O L U T I O N S

To give military commanders better control over the multiple communications networks used in joint military opera-

tions, SAIC is designing the Joint Network Management System (below). The software system is intended to enhance

situational awareness by providing commanders with a common, automated system for joint communications plan-

ning and management.

As a prime developer and integrator of complex informa-
tion-based systems, SAIC offers a wide array of experience
in the areas of command and control, enterprisewide
telecommunications and network systems, and law en-
forcement and security solutions. Ranked by Government
Executive as the #1 Systems Integration Contractor, SAIC
provides unique insight and perspective as a top-ranked
developer of integrated solutions.

Next Generation Command, Control, and
Communications
Since our first C3 contract win in 1971, we have been
working to help warfighters achieve the seamless, global
systems interoperability that will give U.S. forces infor-
mation dominance on the battlefield. Today, as the U.S.
Department of Defense transitions toward network-centric
warfare, our command, control, and communications ex-
pertise is helping DoD build the infrastructure and systems
that are critical to achieving its goals.

Supplying real-time battlefield intelligence to anyone
who needs it, from a soldier on the front lines to a com-
mander thousands of miles away, requires an expanded
bandwidth network. As the Defense Information Systems
Agency (DISA) support contractor for the Global Informa-
tion Grid - Bandwidth Expansion (GIG-BE) program, we
are helping to design and deploy a 10-gigabit-per-second
optical data network supporting warfighters at more than
100 locations worldwide. The GIG-BE network will replace
part of the backbone of the Defense Information System
Network, a synchronous optical network with 2.4-gigabit-
per-second transmission rates. Our role – which includes
managing the evaluation and procurement of hardware
and software, plus network operations and management
solutions for the GIG-BE project – positions us as a lead-
ing independent evaluator for other large, highly complex
information technology programs.
We are also continuing more than a decade of sup-
port to other DISA infrastructure initiatives, such as the
development of Net Centric Enterprise Services (NCES),

the next generation of common, interoperable information
capabilities to support the warfighter.

To manage the converged voice, video and data
networks that will traverse tomorrow’s complex battle-
field, we are helping the U.S. Army Communications-
Electronics Command design, develop, and field the
Joint Network Management System (JNMS). The system
will enable warfighters to plan and manage the diverse
legacy and advanced telecommunications systems in the
joint battlespace. Of critical importance, JNMS will enable
Combatant Command Joint Task Force Commanders to
obtain decisive information and maintain dominance in an
increasing network-centric battlefield.

For another key customer, the Space and Naval Warfare

Systems Command (SPAWAR), we are upgrading a Joint
Ultra High Frequency Military Satellite Communications
system that provides users with worldwide data and voice
communications that are fully compatible with fixed,
mobile, man-packable, and transportation operations. This
will give the warfighter increased satellite access through
enhanced channel control and distributed remote com-
munication planning via a Web browser.
Also for SPAWAR, we support the Service Oriented
Architecture initiative to provide a common set of interop-
erable information capabilities in the Global Information
Grid. The goal: to better access, collect, process, store,
disseminate, and manage information on demand for
warfighters, policy makers, and support organizations.
Another system we developed for the federal govern-
ment is enhancing situational awareness and collabora-
tion for homeland defense and crisis operations. The Area
Security Operations Command and Control (ASOCC)
system is a secure peer-to-peer incident management
system that allows for almost instantaneous knowledge
of incidents to speed up response time and facilitate
cooperation between local, state, and federal agencies.
The ASOCC system is unique among incident management
systems in that it can span the secure and non-secure en-
vironments to provide support to both civilian and military

S Y S T E M A N D N E T W O R K S O L U T I O N S

To give military commanders better control over the multiple communications networks used in joint military opera-

tions, SAIC is designing the Joint Network Management System (below). The software system is intended to enhance

situational awareness by providing commanders with a common, automated system for joint communications plan-

ning and management.

the next generation of common, interoperable information
capabilities to support the warfighter.

For another key customer, the Space and Naval Warfare

S Y S T E M A N D N E T W O R K S O L U T I O N S

organizations. For example, the U.S. Northern Command
is operationalizing ASOCC to provide a counterterrorism
collaboration capability across the breadth of DoD.

Enterprise-wide Telecommunications and
Network Systems
As many of our government customers move to managed
services in both telecommunications and information
systems, we are supporting their efforts to shed large
infrastructure costs and concentrate on core missions.

Building on our long-term relationship with NASA, we
recently won a contract to provide information technology
management services across the agency. This NASA-wide
IT management effort includes support to the Integrated
Financial Management Program, wide-area network, IT
security, and NASA’s digital television system. Most of
the work is being performed at the Marshall Space Flight
Center in Huntsville, Alabama, where SAIC has estab-
lished a growing business base. We will provide support
in the areas of federal telecommunications and network
management, IT security, software development, and
enterprise resource planning implementation.

Integrated Law Enforcement and Security
Solutions
Better information sharing and collaboration are es-
sential for fighting the war on crime and terrorism. SAIC
pioneered the development of systems that enhance
information sharing for law enforcement agencies at all
levels of government. In the early 1980s, we developed
the first national, criminal-history system built on a
biometric and shared by all 50 states. In the 1990s, we
built the follow-on system, the FBI Interstate Identification
Index (III), which today maintains data on more than 40
million subjects and is used by more than 500,000 state,
local, and federal law enforcement officials. Following
the mandate of the Brady Act, we worked with the FBI
to build the National Instant Criminal Background Check
System, which helps U.S. firearms dealers determine if they

may legally sell or transfer a weapon, through a database
search that usually takes less than 1 second. We also built
the FBI Combined DNA Index System, the national DNA
database installed at more than 200 worldwide forensic
labs and used by investigators to quickly link the same
perpetrator to crimes at various sites.

Today, we are building a highly secure, Web-based

investigative case-management system specifically
designed to foster information sharing as a way of solving
a greater number of cases more quickly. We also built and
help facilitate the FBI Law Enforcement Online system, a
43,000-user, electronic community for sharing strategies
and tactics for combating crime and terrorism.

In the biometric area, we are developing a kiosk-based

system that integrates three biometrics – facial, iris, and
fingerprint scans – to support the Kingdom of Jordan’s
Public Safety Directorate. And we’re helping the New York
City Police Department protect its 55,000 officers and
staff with a biometric-based, PDA-compatible identifica-
tion badge that holds essential personnel data, documents
time and attendance, and controls access to facilities.
Through our Automated Exercise and Assessment
System, we train officials at all levels of government how
to react and share information in crisis situations such as
biological, chemical, and natural disasters.

To protect the security of information, the U.S. govern-
ment looks to SAIC’s Common Criteria Testing Laboratory
(CCTL) to evaluate the security of the technology products
that comprise the federal IT structure. SAIC’s CCTL has
become the most trusted lab – based on market share
statistics – among domestic producers of hardware and
software products.
And we’re even helping to protect the security of
the most important of U.S. privileges – the vote. When
Maryland decided to implement touch-screen electronic
voting, the state looked to SAIC to assess the security of
the new voting system. SAIC has also addressed security
issues surrounding electronic voting for the Republican
and Democratic National Committees.

(Above) SAIC provides engineering support to the highest levels of the Department of Justice, FBI, Drug Enforcement

Administration, as well as state and local law enforcement to implement the federal Communications Assistance for

Law Enforcement Act (CALEA) wiretap statute, which ensures that telecommunications carriers of all kinds – land-line,

wireless, cable-based, Internet-based, and satellite – make their networks capable of provisioning lawful electronic

surveillance.

S Y S T E M A N D N E T W O R K S O L U T I O N S

organizations. For example, the U.S. Northern Command
is operationalizing ASOCC to provide a counterterrorism
collaboration capability across the breadth of DoD.

Today, we are building a highly secure, Web-based

In the biometric area, we are developing a kiosk-based

(Above) SAIC provides engineering support to the highest levels of the Department of Justice, FBI, Drug Enforcement

Administration, as well as state and local law enforcement to implement the federal Communications Assistance for

Law Enforcement Act (CALEA) wiretap statute, which ensures that telecommunications carriers of all kinds – land-line,

wireless, cable-based, Internet-based, and satellite – make their networks capable of provisioning lawful electronic

surveillance.

T R A N S F O R M A T I O N , T E S T ,

T R A I N I N G A N D L O G I S T I C S

Innovative power systems are a key enabler of the Army’s Future Combat Systems (FCS). SAIC plays a major role in

developing hybrid electric propulsion systems for large (16- to 20-ton) armored combat vehicles. Our work includes

full-scale, hardware-in-the-loop simulations (below) to test the effectiveness and reliability of hybrid propulsion sys-

tems in FCS simulations. This testing helps reduce risk and provides critical data to enhance the propulsion systems.

For more than 30 years, SAIC has worked with military
clients to integrate technology, tactics, and training into
new capabilities. To aid the U.S. in meeting emerging
threats and challenges, SAIC is helping transform those
capabilities.

Military Transformation
We offer Service and Joint customers support for the full
spectrum of military transformation. Our support ranges
from research and concept development through test,
evaluation, and experimentation to training and, ulti-
mately, support for deployed systems and troops.

For the U.S. Army’s flagship transformation program

– the Future Combat Systems (FCS) – SAIC and Boe-
ing work together as the Lead Systems Integrator (LSI).
Together we are developing the overall architecture for
a networked system-of-systems to include manned and
unmanned platforms capable of conducting missions for
assault, air defense, reconnaissance, surveillance and
target acquisition, and battle management command and
control.
As part of the LSI team, SAIC identified and evalu-
ated potential concepts and technologies and conducted
demonstrations that helped move the FCS program from
the concept and technology development phase into the
system development and demonstration phase. During this
current phase, SAIC will rapidly evaluate FCS concept and
technical options, while enabling early concurrent concept
testing to accelerate the FCS fielding schedule.

The U.S. Joint Forces Command (JFCOM) – named the

“transformation laboratory” for the U.S. military – relies
on SAIC and General Dynamics for critical support in plan-
ning, coordinating, supervising, and executing joint ex-
perimentation exercises. We developed an enterprise-wide
architecture for joint command, control, communications,
computers, intelligence, surveillance, and reconnaissance
(C4ISR) along with a collaborative information environ-
ment for the JFCOM Joint Experimentation Directorate.
As the sole contractor for the Joint Interoperability and

Integration Directorate in JFCOM, SAIC supported com-
mand and control requirements development, integration,
test and analysis, and advanced training for the interoper-
ability of transformational C4ISR systems.
Acting as “devils’ advocates” and peer reviewers, our
independent “red teams” help ensure that new concepts
and programs to fight aggressive, adaptive enemies
are robust and resilient. For example, an SAIC red team
reviewed JFCOM lessons learned reports on Operation
Iraqi Freedom to examine results from the perspective
of potential U.S. adversaries. Our experts identified how
adversaries might modify their strategies and tactics to
exploit vulnerabilities of U.S. forces.

Innovative Test and Evaluation
As a recognized leader in rapid military technology assess-
ments, we understand the critical elements required for
successful test, evaluation, and experimentation in military
environments. Our ability to rapidly assess the utility of
emerging technologies and accelerate the acquisition
process assists our Department of Defense customers with
timely deployment of transformational capabilities.

For example, we provided quick-reaction testing sup-
port for global positioning system (GPS)-related systems
for Operation Iraqi Freedom. The unique instrumentation
we developed for remote-control testing of the GPS jam-
mers allowed for much quicker testing in environments
outside traditional test ranges.

Full-Spectrum Training and Simulation
Our full-spectrum training ranges from computer-based
and live classroom training to comprehensive, integrated
simulations in the live, virtual, and constructive domains.
More than 25 years ago, we pioneered state-of-the-art
live action training by integrating the U.S. Army’s National
Training Center at Fort Irwin, California. Today, we are
pioneering new kinds of simulations to enable soldiers
to receive “war time“ best practices training in the field,
anywhere in the world, right before battle.

T R A N S F O R M A T I O N , T E S T ,

T R A I N I N G A N D L O G I S T I C S

Innovative power systems are a key enabler of the Army’s Future Combat Systems (FCS). SAIC plays a major role in

developing hybrid electric propulsion systems for large (16- to 20-ton) armored combat vehicles. Our work includes

full-scale, hardware-in-the-loop simulations (below) to test the effectiveness and reliability of hybrid propulsion sys-

tems in FCS simulations. This testing helps reduce risk and provides critical data to enhance the propulsion systems.

For the U.S. Army’s flagship transformation program

The U.S. Joint Forces Command (JFCOM) – named the

T R A N S F O R M A T I O N , T E S T , T R A I N I N G A N D L O G I S T I C S

For example, we are developing a portal to enable
training program design, development, and delivery to sol-
diers around the globe at any time and any place. Whether
at combat systems computers or in distance learning fa-
cilities, Army personnel will be able to interface this Army
Training Information Architecture-Migrated, regardless of
platform.

In another example, we developed and distributed
a CD- and Web-based training program for the Army
to allow soldiers deploying to Iraq to learn about the
country’s history, culture, politics, economics, and potential
operational challenges.
A leader in applying human behavior modeling to
training systems, SAIC is the prime contractor for the
Army’s One Semi-Automated Forces Objective System
Testbed Baseline (OneSAF OTB) program. Named as one
of the U.S. Government’s Top 5 quality software projects,
this program supports the development of new weapon
systems and Army modernization objectives, such as
battlefield digitization.
OneSAF OTB, which stands as a bridge between a
legacy Semi-Automated Forces system and the Army’s
future OneSAF Objective system, also provides embedded
training capability for the Army’s Future Combat Systems
program.

For the Mission Support Training Facility at Fort Lewis,

Washington, we provide digital training, modeling and
simulation support integrated with C4ISR systems. This
work immerses soldiers and staffs in the Stryker Brigade
Combat Teams with realistic, real-time simulated training.
We also help establish “reach back” communications with
deployed Stryker Brigades and provide systems integration
and command and control technical integration support to
Task Force Olympia (responsible for operations in Northern
Iraq.)

Finally, we help advance the capabilities of virtual
flight simulators for Naval aviation through our support
for the Navy’s Manned Flight Simulator facility in Patuxent
River, Maryland.

Logistics Transformation
Through services such as aircraft modifications, sustain-
ment support, and sustainment engineering, we help our
military customers respond to the accelerated operational
tempo of war, and improve the front-line readiness of
combat weapon systems.

For example, our SCOPTIMA® system allows Air Force

and Navy staff to anticipate and more quickly obtain
weapon system parts, resulting in higher stock levels and
quicker response times to help ensure the readiness of
front-line weapon systems. Working with the Defense
Logistics Agency, we exceeded a 98% fill-rate requirement
for weapon systems spare parts at the Air Force Materiel
Command Air Logistics Centers. In fact, the SCOPTIMA®
system oversees all elements of the Air Force bench stock
supply chain by reviewing inventory, generating and track-
ing orders, and initiating invoices.

In addition, we provide sustaining engineering services
to modernize Air Force systems and improve maintenance
response times. SAIC developed and implemented remote
maintenance capabilities for the Air Force’s Instrument
Landing System (ILS). These upgrades included connectiv-
ity to secure ILS servers and remotely operated radios to
enable fault diagnosis, maintenance adjustments, and
remote Federal Aviation Administration flight certification
from regionalized maintenance centers. The Air Force proj-
ects $9 million in net savings from a $5 million investment
in this new technology.
We go beyond improving logistics systems and proce-
dures to help customers transform their logistics capabili-
ties to meet the emerging needs of our nation’s warfight-
ers. SAIC is helping the Department of Defense design a
future logistics strategic framework to enable the design
of military systems from the ground up to be resource-
efficient, easily deployable, and logistically intelligent.
Through emerging autonomics and prognostics technolo-
gies, the systems will be able to communicate when and
how they should be maintained and supported.

“

I … look forward to continuing [with] your company’s track record of superb

support to the JT&E Program.”

James Thompson, Joint Test and Evaluation Program Manager

The vision for Army transformation includes robotic ground vehicles that are smart and light. To accelerate tech-

nologies for this, DARPA’s Grand Challenge desert race was devised. The robotic Humvee, Sandstorm (above), built by

Carnegie Mellon University with key assistance from SAIC, set the distance record for the race, successfully navigating

some of the course’s most challenging areas. We developed Sandstorm’s vision system to detect obstacles and haz-

ards. We also provided mapping and classification software that enabled Sandstorm to navigate through the desert.

T R A N S F O R M A T I O N , T E S T , T R A I N I N G A N D L O G I S T I C S

For the Mission Support Training Facility at Fort Lewis,

Finally, we help advance the capabilities of virtual
flight simulators for Naval aviation through our support
for the Navy’s Manned Flight Simulator facility in Patuxent
River, Maryland.

For example, our SCOPTIMA® system allows Air Force

“

I … look forward to continuing [with] your company’s track record of superb

support to the JT&E Program.”

James Thompson, Joint Test and Evaluation Program Manager

The vision for Army transformation includes robotic ground vehicles that are smart and light. To accelerate tech-

nologies for this, DARPA’s Grand Challenge desert race was devised. The robotic Humvee, Sandstorm (above), built by

Carnegie Mellon University with key assistance from SAIC, set the distance record for the race, successfully navigating

some of the course’s most challenging areas. We developed Sandstorm’s vision system to detect obstacles and haz-

ards. We also provided mapping and classification software that enabled Sandstorm to navigate through the desert.

N A V A L E N G I N E E R I N G A N D

T E C H N I C A L S E R V I C E S

More than 300 miles from the nearest ocean, Lake Pend Orielle offers a virtually ideal location to operate large-scale

submarine missions. At the Acoustic Research Detachment, the Navy is using what Idaho’s largest lake has to offer, a

remote and spacious location to test large-scale submarine models, such as the “Cutthroat” (below), and advanced

submarine stealth technology. Providing a full spectrum of maritime support, SAIC is assisting the Naval Surface War-

fare Center’s effort in perfecting its advanced quieting technology.

Today, worldwide events drive the Navy to ever-higher
levels of readiness, sustainability, and crew self-sufficiency,
while national priorities demand lower costs. In response,
SAIC and its AMSEC LLC subsidiary (a joint venture with
Northrop Grumman Newport News) provide end-to-end,
integrated services – through comprehensive domain
knowledge – to help the Navy meet these challenges.
Some elements of our support have been in place for
more than 20 years, while other activities are at the cut-
ting edge of the Navy’s future vision.

Navy Command, Control, Communications,
Computers and Intelligence for Surveillance
and Reconnaissance (C4ISR)
Our in-depth expertise in Navy C4ISR enabled us to
install 12 next generation network packages on large
amphibious warfare ships in less than 90 days – work that
would typically take more than a year. In the wake of the
September 11 attacks, we implemented a rapid engineer-
ing process to redesign and rebuild the Navy Command
Center communications and antenna systems within the
Pentagon.
On the cutting edge at the highest levels, we worked
with the Chairman, Joint Chiefs of Staff and the Defense
Information Systems Agency (DISA) to draft the next
generation C4I doctrine and to develop Navy policy for
Voice-over-Internet-Protocol. We also won the Department
of the Navy Chief Information Officer’s award for excel-
lence by developing the aircraft carrier refueling overhaul
management information system, which mines legacy
databases that support aircraft carrier overhauls.
When the Navy needed a new approach to shipboard
and land-based communications and computing to
develop its future carrier fleet (CVN 21), the Navy turned
to us. We will analyze operational capabilities and require-
ments, evaluate technology trends, and perform design
and systems engineering for these future strategic assets.
To help the Navy’s Space and Naval Warfare Systems
Command (SPAWAR) enable better communications, we

provide design, production, and life cycle support for the
Automated Digital Network System and the SCI-Networks
system. These programs provide Internet Protocol (IP)
wireless-to-wireline connectivity to streamline data flow
among various ships, submarines, and aircraft.

Naval Combat Systems
We significantly enhanced our combat system capabilities
in FY04 by acquiring Planning Consultants, Inc. (PCI), a
leading engineering and technical support company for
Aegis and new surface combatant ships. The acquisition
enables us to provide legacy engineering for Aegis combat
systems, and alternative concept analysis and engineering
for new ship classes, such as DD(X), CG(X), and CVN 21.
In addition to providing end-to-end weapons and
combat systems engineering services to the Navy, AMSEC
LLC supports the development of tactics, training, and pro-
cedures for such systems through the Center for Surface
Combat Systems. Our work includes helping the Center
develop and conduct training for all anti-air warfare, anti-
surface warfare, and anti-submarine warfare missions.

Naval Undersea Warfare and Ranges
Our contributions in undersea warfare range from
developing and deploying ruggedized electronics aboard
Navy attack submarines to longtime support of undersea
surveillance systems. By acquiring (shortly after FY04
ended) Aquidneck Management Associates, Ltd., a lead-
ing provider of technical and programmatic services to
the Naval Undersea Warfare Center, we are positioned
to expand the range of technical services we offer in the
undersea warfare arena.
We are also the prime contractor for the Mine Warfare
and Environmental Decision Aids Library (MEDAL) system,
the Navy’s tactical decision aid for mine warfare. MEDAL is
deployed on over 35 Navy ships and was used during the
war with Iraq.
When Navy staff planned and conducted amphibious
operations during Operation Iraqi Freedom, they relied on

N A V A L E N G I N E E R I N G A N D

T E C H N I C A L S E R V I C E S

More than 300 miles from the nearest ocean, Lake Pend Orielle offers a virtually ideal location to operate large-scale

submarine missions. At the Acoustic Research Detachment, the Navy is using what Idaho’s largest lake has to offer, a

remote and spacious location to test large-scale submarine models, such as the “Cutthroat” (below), and advanced

submarine stealth technology. Providing a full spectrum of maritime support, SAIC is assisting the Naval Surface War-

fare Center’s effort in perfecting its advanced quieting technology.

N A V A L E N G I N E E R I N G A N D T E C H N I C A L S E R V I C E S

the Expeditionary Decision Support System, a software
application developed by SAIC.

Naval Aviation Support
Through our acquisition of Eagan, McAllister Associates,
Inc., we now provide the full spectrum of technical and
administrative support for Naval Air Systems Command at
Naval Air Warfare Center, Patuxent River, Maryland.

In addition, with outstanding customer support that
goes back more than 20 years, our services are tailored
to meet both market demand and individual customer
needs. For example, in an effort with Coherent Technol-
ogy Research, we help the Naval Air Systems Command
develop, integrate, and analyze support sensor systems
for its unmanned aerial vehicle department. In fact, our
naval aviation expertise includes all aspects of systems en-
gineering and software development for a host of aircraft
platforms and sub-systems, including the V-22 Osprey,
E-2C Hawkeye, and F/A-18E/F Super Hornet.

Fleet Technical Support
In the arena of fleet technical support, we excel. For
example, in FY04 we conducted more than 2,400 system
assessments, repairs, and training support on both con-
ventional and nuclear-powered ships. We also performed
500 modernization tasks on virtually every combatant
ship type. Our work ranged from installing the latest pulse
radar tank-level indicating system on a nuclear-powered
aircraft carrier to installing “smart” improvements to
compensate for reduced crew size.

The breadth and depth of our capabilities position us
to benefit from the Navy’s infrastructure realignments and
consolidation of major contract support activity in the year
ahead. As the Regional Maintenance Centers emerge as
new commands, they will also contain new customers for
which we are well positioned as a prime provider.

Navy Engineering/Integrated Logistics Support
In June 2003, the Navy received its newest aircraft carrier,

the USS Ronald Reagan (CVN 76), the largest and most
complex weapons system ever. AMSEC LLC provided the
life cycle logistics for Reagan, which the Navy said was the
most comprehensively supported ship logistically of any
new construction hull. Our support involved identifying
and outfitting Reagan with repair parts, technical manuals,
and drawings. We are also supporting the Navy’s next
aircraft carrier, USS George H W Bush (CVN 77).

In support of the U.S. Coast Guard’s Integrated Deep-

water System, we helped design the National Security
Cutter, the largest of the vessel classes in this program.

In addition, we provide important technical assistance
to the Naval Surface Warfare Center, Carderock Division.
We are introducing new technology to the fleet in data
and communication networks, machinery control and
condition monitoring, and information management, as
well as supporting its combatant craft department.
We are developing Web-based tools to more easily
integrate complex system installation and testing projects.
These efforts enable the Navy to reduce workload, im-
prove responsiveness and efficiency, and lower costs. We
also designed and developed a Web-based data knowl-
edge management system that delivers, maintains, and
tailors data for operational units and individual users.

Port and Physical Security
As a leading supplier of integrated port and harbor secu-
rity system for all of our customers, including commercial
(as mentioned in the Commercial IT and Professional
Services section of this Annual Report), SAIC enables
all-weather surface and sub-surface surveillance against a
wide variety of threats, including stealth boats, mini-subs,
and divers. During the war with Iraq, SAIC-designed mo-
bile inshore underwater systems were deployed in Kuwait,
Iraq, and Guantanamo Bay, Cuba, to detect perimeter
intrusion and classify and track surface and sub-surface
contacts. AMSEC LLC also provides system design for
important security infrastructure enhancements for air, rail,
bus, and vessel transportation hubs.

“

Quality and affordability place AMSEC high on our list of contract maintenance

providers. My thanks to all your employees for the service they provide.”

Vice Admiral Michael D. Malone, U.S. Navy, Commander, Naval Air Forces, and

Commander, Naval Air Force, U.S. Pacific Fleet

From high-tech modernization to engineering design and crew training, SAIC performs a wide array of duties to sup-

port the Navy and ships such as the USS Nimitz (above). Our work reduces the lifecycle costs of maintaining the fleet

without jeopardizing readiness or safety.

N A V A L E N G I N E E R I N G A N D T E C H N I C A L S E R V I C E S

the Expeditionary Decision Support System, a software
application developed by SAIC.

Navy Engineering/Integrated Logistics Support
In June 2003, the Navy received its newest aircraft carrier,

In support of the U.S. Coast Guard’s Integrated Deep-

water System, we helped design the National Security
Cutter, the largest of the vessel classes in this program.

“

Quality and affordability place AMSEC high on our list of contract maintenance

providers. My thanks to all your employees for the service they provide.”

Vice Admiral Michael D. Malone, U.S. Navy, Commander, Naval Air Forces, and

Commander, Naval Air Force, U.S. Pacific Fleet

From high-tech modernization to engineering design and crew training, SAIC performs a wide array of duties to sup-

port the Navy and ships such as the USS Nimitz (above). Our work reduces the lifecycle costs of maintaining the fleet

without jeopardizing readiness or safety.

E N T E R P R I S E A N D

I N F R A S T R U C T U R E S O L U T I O N S

(Above) Because enterprises are increasingly reaching to unconventional places, they need partners who bring deep

domain expertise, IT knowledge, and field experience to help them perform better and more efficiently. For the U.S.

Forest Service, the enterprise extends to Arizona’s Tonto National Forest. We are using our expertise to help preserve

and restore the natural beauty by providing engineering to control soil erosion and for soil covers. We are also helping

design vegetative covers to reduce mobility of mine-generated metal contaminants, such as mercury and arsenic.

As enterprises extend beyond traditional boundaries in
search of better efficiencies, better performance, and
better results, SAIC has extended its reach as well. We
offer new solutions in enterprise-level architecture and
integration services, mission critical software development,
and infrastructure support.

In FY04, we increased our infrastructure support capa-
bilities by acquiring Computer Systems Technology. Now
an SAIC business unit, CST provides critical infrastructure
support to the IRS, U.S. Army Corps of Engineers, Navy
Personnel Command, and a primary DoD initiative, the
Ground-based Midcourse Defense Joint Program Office.

Environmental Restoration, Planning, and
Compliance
For more than 30 years, SAIC has provided environmen-
tal technical support services to federal and commercial
clients. In FY04, we continued to support technology
implementation, expanded our environmental restoration
work for DoD, and addressed new challenges in sustain-
ability and joint land and airspace use at military ranges.
For example, we are providing diverse environmen-

tal services to Tinker Air Force Base in support of the
base’s compliance, restoration, pollution prevention, and
conservation programs. We also won important new
contracts, shortly after the end of FY04, for hazardous,
toxic, radioactive waste services with the U.S. Army Corps
of Engineers’ (USACE) Louisville and Buffalo Districts.
On another important USACE project, we completed
the balance-of-plant design (mechanical, electrical, and
civil) and designed the instrumentation and control
systems for a plant that uses an innovative soil-washing
process to remove arsenic from soils. As a result, we have
been contracted to extend the design-build support to the
site’s groundwater-treatment plant.

For Newport Chemical Depot in Indiana, we support
remediation of five sites, including bioremediation at two
explosives-contaminated sites, soil capping and creek
bank stabilization at a metals- and hydrocarbon-contami-

nated site, soil cover construction at another metals-con-
taminated site, and PCB removal.
Our environmental scientists work across all DoD com-
ponents to support mission sustainability and readiness
through our practices in operational and range planning,
waste minimization, and National Environmental Policy
Act (NEPA) compliance. For the Air Force, we support
development of GeoBase applications that enhance agile
combat support by providing situational awareness for
all mission elements of garrison installation operations.
Our implementation of GeoBase, a secure geospatial
information infrastructure, is providing the Air Force with
an important platform that is directly portable to multiple
installations.
When the U.S. Marine Corps and Navy required an
alternate location to conduct pre-deployment training for
Amphibious Ready Group/Marine Expeditionary Units, they
called on SAIC to help meet an expedited environmental
assessment schedule and commitment to Congress. In less
than five months we helped certify Eglin Air Force Base as
a new training location by completing the environmental
assessment and NEPA documentation.

Public Energy Expertise
By leveraging our system integration and engineering
expertise, we help our customers develop new energy
sources, find more efficient ways to provide energy, and
make long-range forecasts of energy supply, demand and
prices. For example, in support of several utilities and sys-
tem operators, our analysts and researchers worked with
NOAA and the Scripps Institute to better use weather data
in forecasting utility loads, a key to real-time electrical
network operations.

For the Wisconsin, New York, and Oregon Energy Of-
fices, SAIC directed, implemented, and delivered energy
efficiency programs for state and local agencies and
commercial clients. For the State University of New York
and the NYC Metropolitan Transit Authority, we evaluated
energy trends and procurement approaches.

E N T E R P R I S E A N D

I N F R A S T R U C T U R E S O L U T I O N S

(Above) Because enterprises are increasingly reaching to unconventional places, they need partners who bring deep

domain expertise, IT knowledge, and field experience to help them perform better and more efficiently. For the U.S.

Forest Service, the enterprise extends to Arizona’s Tonto National Forest. We are using our expertise to help preserve

and restore the natural beauty by providing engineering to control soil erosion and for soil covers. We are also helping

design vegetative covers to reduce mobility of mine-generated metal contaminants, such as mercury and arsenic.

E N T E R P R I S E A N D I N F R A S T R U C T U R E S O L U T I O N S

Health Care Systems Support
For nearly 15 years, we have supported the Military Health
System community by developing and deploying key
medical information systems, and helping operate and
maintain the Military Health System IT infrastructure. We
are positioned to increase these efforts after winning a
key recompetition shortly after the end of FY04. Through
this win, we will support the DoD/TRICARE management
activity at 675 military hospitals and clinics worldwide,
implement ongoing projects for system integration and
software development, and support new technologies
coming into play in the next decade.
We are also the lead systems integrator for the TRI-
CARE Online health portal, a patient-centric health care
delivery system for Internet access to health care informa-
tion, services, and benefits. We developed an interface
for the health portal, established and maintain help desk
capabilities, and developed and support a Web-based
training system for the portal.

Supporting Bioterrorism Preparedness
With increased possibilities of biological and chemical
threats, public agencies need to respond rapidly to emerg-
ing events. We assist the Centers for Disease Control and
Prevention (CDC) in better preparing for and responding
to major health threats and bioterrorism threats.

For example, SAIC helped CDC roll out and track the
nationwide smallpox immunization campaign for health
care workers and first responders. We assisted in the
creation of a state-of-the-art emergency operations center
and the development of information management solu-
tions vital to its effectiveness. SAIC is supporting programs
as well in the area of early detection, outbreak manage-
ment, and laboratory reporting of bioterrorism-related test
results from laboratories across the country.

In addition, we are helping the CDC improve the
nation’s ability to identify and track infectious diseases
and potential bioterrorism attacks. SAIC is helping the
CDC develop the National Electronic Disease Surveillance

System (NEDSS), which is designed to enable quicker,
more accurate epidemiological analysis. NEDSS serves as
the foundation of the Public Health Information Network,
a unifying framework that aims to extend NEDSS’ objec-
tive of standards-based information exchange to all public
health activities and organizations nationwide. SAIC is
also providing strategic and architectural support for the
Public Health Information Network.

Cutting-edge Medical Research
Our scientists at the National Cancer Institute (NCI)-Fred-
erick, Maryland, part of the National Institutes of Health
(NIH), help direct research into the causes, treatment, and
prevention of cancer, AIDS, SARS, and related diseases.

The Frederick campus also serves as a major biotech-
nology resource center for NCI/NIH and the extramural
research community. As part of this work, our Research
Technology Program is developing new technologies in
areas such as genomics, proteomics, and imaging.

Through our Proteomics Clinical Reference Labora-
tory, we are embarked on a clinical study to obtain FDA
approval for a revolutionary diagnostic test we helped de-
velop for ovarian cancer. The test uses pattern recognition
algorithms to detect hidden sub-patterns in mass spectra
of blood serum. The patterns represent “fingerprints“ of
the disease in an early stage, and this technique has the
potential to revolutionize the diagnosis of many types of
disease.
We are also working with NCI to establish a nanotech-
nology program and laboratory to better detect and treat
cancer.
As SAIC technical experts enable the CDC to reduce
the time it takes to process SARS information, we are
helping to produce vaccine candidates against SARS. This
aligns with our traditional role in researching antiviral
drugs against biological threat agents, such as HIV and
AIDS. In addition, SAIC is working with the National Insti-
tute of Allergy and Infectious Diseases to produce vaccine
candidates against malaria.

“

I would like to take this opportunity to commend the SAIC team supporting the

Environmental Management Directorate here at the Air Armament Center…

I have never seen a more professional bunch of people, [they] consistently go

that extra mile to meet mission needs.”

James D. Sirmans, Director, Environmental Management, Eglin AFB

(Above) Doctors in the Camp Pendleton Naval Hospital’s Ophthalmology Department use the SAIC-developed

Composite Health Care System (CHCS) to quickly access a dependant’s patient records. Supporting virtually every

aspect of health care information management for over 8 million DoD healthcare beneficiaries, CHCS is the world’s

largest integrated health care information system.

E N T E R P R I S E A N D I N F R A S T R U C T U R E S O L U T I O N S

“

I would like to take this opportunity to commend the SAIC team supporting the

Environmental Management Directorate here at the Air Armament Center…

I have never seen a more professional bunch of people, [they] consistently go

that extra mile to meet mission needs.”

James D. Sirmans, Director, Environmental Management, Eglin AFB

(Above) Doctors in the Camp Pendleton Naval Hospital’s Ophthalmology Department use the SAIC-developed

Composite Health Care System (CHCS) to quickly access a dependant’s patient records. Supporting virtually every

aspect of health care information management for over 8 million DoD healthcare beneficiaries, CHCS is the world’s

largest integrated health care information system.

H O M E L A N D S E C U R I T Y

(Below) Called to investigate a “suspicious” package in California, members of the Orange County Sheriff’s Bomb

Squad deploy with SAIC’s RTR-4® portable X-ray imaging system and PD-10i radiation dosimeter. During this exercise

at a tactical training facility, the RTR-4 revealed the contents of a suspect package while the PD-10i alarmed to warn

against elevated levels of radiation. To date, first responders around the world have purchased some 3,000 RTR-4 sys-

tems and tens of thousands of our personal dosimeters.

For more than 35 years, SAIC has helped government
agencies and companies respond to critical national
security and homeland defense problems. We have
demonstrated our abilities in situations as diverse as the
Tokyo subway nerve gas attacks, the crash of TWA flight
800, the 1998 attacks on the U.S. embassies in Kenya and
Tanzania, and the 2000 bombing of the USS Cole. After
the 1993 World Trade Center bombing, our blast analyses
produced tangible results that helped identify those
responsible.

Following the September 11, 2001, terrorist attacks,

we responded rapidly to assist a number of customers
near ground zero in New York City and in Washington,
D.C.

Today, we offer the full range of our capabilities to
support the global war on terrorism. As a leading systems
integrator, we provide integrated, end-to-end homeland
security solutions to help foster collaboration among civil-
ian first-responders, local law enforcement, public health
workers, and other emergency responders.
When the Department of Homeland Security (DHS)
faced the enormous challenge of integrating the disparate
missions, cultures, and systems of its 22 agencies and
180,000 employees, our systems integrators worked to
deliver a high-level target enterprise architecture and
transition strategy in less than four months. Built on our
previous successes at INS, IRS, FEMA, and the National
Archives, the DHS enterprise architecture provides a road-
map for information sharing and IT integration in the new
department. Currently, we support DHS in moving beyond
the basic enterprise architecture framework to develop
new and improved mission support capabilities, such as

better coordination of terrorist watch lists.

In recognition of that work and our many other efforts

in support of DHS, we received the first-ever Frost &
Sullivan 2003 Market Leadership Award in Homeland
Security and Homeland Defense.

Emergency Preparedness and Response
After September 11, 2001, SAIC’s readiness and quick
response capabilities drew praise from government clients
across the U.S. Today, we are using our technology exper-
tise to help firefighters, police officers, and other emergen-
cy responders improve their readiness and responsiveness
and enhance the interoperability of their communications
and equipment.
We provide the integration and interoperability to
develop homeland security solutions that work. At our
Public Safety Integration Center in McLean, Virginia, we
successfully integrate products from dozens of companies,
including leading-edge biometric, sensor, incident man-
agement, situation awareness, and situation assessment
technologies. At this working laboratory, hundreds of
current and potential clients have experienced “hands-on”
demonstrations of the new technologies and capabilities
– and the integrated solutions – they require to meet
their needs. For example, the center recently demonstrated
ways to improve the interoperability of disparate mobile
radio and wireless systems.
Managing emergency events is a complex
undertaking that requires knowledge of the geography,
underlying infrastructure, and demographics, as well
as the availability of emergency response personnel
and equipment. To transform this data into the useful

“

(DHS and the SAIC team) have accomplished something unique in federal

government: We designed and delivered a comprehensive – and immediately

useful – target enterprise architecture in under four months.”

Steven Cooper, CIO, Department of Homeland Security

H O M E L A N D S E C U R I T Y

(Below) Called to investigate a “suspicious” package in California, members of the Orange County Sheriff’s Bomb

Squad deploy with SAIC’s RTR-4® portable X-ray imaging system and PD-10i radiation dosimeter. During this exercise

at a tactical training facility, the RTR-4 revealed the contents of a suspect package while the PD-10i alarmed to warn

against elevated levels of radiation. To date, first responders around the world have purchased some 3,000 RTR-4 sys-

tems and tens of thousands of our personal dosimeters.

Following the September 11, 2001, terrorist attacks,

we responded rapidly to assist a number of customers
near ground zero in New York City and in Washington,
D.C.

better coordination of terrorist watch lists.

In recognition of that work and our many other efforts

in support of DHS, we received the first-ever Frost &
Sullivan 2003 Market Leadership Award in Homeland
Security and Homeland Defense.

“

(DHS and the SAIC team) have accomplished something unique in federal

government: We designed and delivered a comprehensive – and immediately

useful – target enterprise architecture in under four months.”

Steven Cooper, CIO, Department of Homeland Security

H O M E L A N D S E C U R I T Y

information that aids real-time decision making, the
Michigan State Police called on SAIC to integrate a
statewide geographic information system, commercial
incident management software, training, and the State
Police Concept of Operations into an effective information
system for emergency response.

Ensuring that government employees and volunteers

responding to emergencies are adequately trained and
equipped is essential for regulatory, health and safety
rules, and insurance reasons. The Coordinated Responder
Information System we are developing for Alachua County,
Florida, performs everyday management of personnel
records and, in an emergency, assists officials in deploying
only those personnel who are qualified to serve.
DHS has required all states and territories to complete
a state homeland security assessment and develop a state
strategy defining the goals and objectives for improving
homeland security. Pennsylvania, Florida, and the Com-
monwealth of the Northern Mariana Islands drew on SAIC
expertise to conduct their assessments. We help compare
the risks and response capabilities to ascertain gaps and
then develop strategies to fill those gaps.

Border and Transportation Security
As DHS continues to strengthen and fully integrate
security at the nation’s borders and ports while, at the
same time, facilitating legitimate trade and travel, SAIC is
playing a leading role. As prime integrator, we helped the
U.S. Immigration and Customs Enforcement implement
and deploy the first increment of United States Visitor
and Immigrant Status Indicator Technology (US-VISIT).
Launched at 115 airports and 14 seaports ahead of
schedule, US-VISIT includes a biometric identifier that in
the first few weeks of operation identified more than 100
individuals who were wanted for crimes in the U.S. or had
been previously deported.
Deployed along borders and at ports around the world,
our Vehicle and Cargo Inspection System (VACIS®) units
use a non-intrusive gamma-ray imaging technique to pro-

duce radiographic images of cargo containers and vehicles
in less than a minute. The result: more efficient and secure
flow of goods into the United States. Building on this
success, we developed an integrated system that employs
risk and vulnerability assessments, VACIS units, radiation-
detection portals, biometrics, radio frequency identification
(RFID), and optical character recognition (OCR) to identify
and interdict threats.
Working closely with the Port Authority of New York
and New Jersey, we helped assess threats, vulnerabilities,
and risks, and helped prioritize more than $1 billion in
proposed capital security projects designed to protect
critical transportation assets. As a result of this successful
effort, the DHS Office of Domestic Preparedness adopted
our assessment methodology as a “best practice” model
for use in providing $140 million to the nation’s 35 largest
mass transit agencies to help them enhance their capacity
and preparedness to respond to acts of terrorism.

To help counter the threat of shoulder-fired missiles
being launched at commercial airliners, we developed
technologies that identify potential launch sites as well as
the optimum locations for law enforcement personnel to
take defensive measures, such as deploying remote sens-
ing equipment. Our Light Distancing And Ranging (LIDAR)
toolkit produces high-resolution databases of terrain and
buildings with vertical accuracies within 15 centimeters.
Our Man Portable Air Defense System (MANPADS) Threat
Analysis System then uses this data to determine the
optimum launch sites and defensive locations based upon
aircraft approach and departure routes, and weapon
performance parameters.

For the Transportation Security Administration (TSA),
we manage the disposal of voluntarily abandoned prop-
erty and hazardous materials collected by TSA’s security
checkpoints at more than 440 commercial U.S. airports.

Information Analysis and Infrastructure
Protection
Effectively sharing information across the private and

By bringing together technology vendors and large telecom providers,

“SAIC has created a working laboratory where federal officials can see how

integrated systems work together.”

Frost & Sullivan, 2003 Market Leadership Award

(Above) Government and commercial customers can test new systems and technologies at our Public Safety Inte-

gration Center (PSIC), which includes an Emergency Operations Center simulator for “hands-on” demonstrations of

integrated homeland security solutions. Located in McLean, Virginia, the PSIC features hardware and software from

dozens of companies while SAIC provides the integration and interoperability.

H O M E L A N D S E C U R I T Y

Ensuring that government employees and volunteers

Information Analysis and Infrastructure
Protection
Effectively sharing information across the private and

By bringing together technology vendors and large telecom providers,

“SAIC has created a working laboratory where federal officials can see how

integrated systems work together.”

Frost & Sullivan, 2003 Market Leadership Award

(Above) Government and commercial customers can test new systems and technologies at our Public Safety Inte-

gration Center (PSIC), which includes an Emergency Operations Center simulator for “hands-on” demonstrations of

integrated homeland security solutions. Located in McLean, Virginia, the PSIC features hardware and software from

dozens of companies while SAIC provides the integration and interoperability.

H O M E L A N D S E C U R I T Y

(Above) For the Virginia Port Authority in Norfolk, SAIC’s RadView system provides enhanced security at one of the

busiest ports in the U.S. The system consists of a radio frequency-based automatic equipment identification (AEI)

system, a linescan digital imaging system, and the AT-900 radiation screening system, developed by Exploranium G.S.

Limited (a division of SAIC Canada).

“

The FS/ISAC Board of Directors are thrilled with the progress SAIC has made

since taking over the operations in May 2003. The FS/ISAC has become the ‘gold

standard’ which other industry ISACs are seeking to emulate.”

Suzanne Gorman, Chairperson, FS/ISAC (Financial Services/Information Sharing and Analysis Center)

public sectors is essential in protecting the nation’s critical
infrastructure. SAIC designed and implemented the first
Information Sharing and Analysis Center (ISAC) in 1999,
in response to a Presidential Decision Directive calling for
industry and government cooperation to guard against
both cyber and physical threats. Today, SAIC operates the
ISACs for the financial services sector and the oil and gas
sector of the U.S., as well as the World Wide ISAC. Our
24x7 command center collects, analyzes, and distributes,
in near real time, the latest threat and mitigation informa-
tion. When a major power outage struck the eastern U.S.
in August 2003, the ISAC stood up an information sharing
teleconference bridge for industry, DHS, and other U.S.
agencies within one hour, resulting in a more effective re-
sponse and a better understanding of the event’s impact.
SAIC also operates the 24x7 Federal Computer Inci-
dent Response Center (FedCIRC) security watch, serving
as the central point for federal civil agencies to report
suspected cyber incidents. The FedCIRC security watch
correlates incident report data and information from other
sources to develop early warning and information notices
that are distributed to all federal civil agencies.

To foster better communication across the Depart-
ment of Homeland Security, we linked systems at the 22
legacy DHS agencies to a common data communications
backbone, and provided an overall management structure
to assist the DHS in governing its infrastructure.

To provide an integrated chemical, biological, radio-
logical, and nuclear protection (CBRN) capability at 200
Department of Defense (DoD) installations and facilities
worldwide, SAIC was selected (shortly after the close of
FY04) as the Lead Systems Integrator for the Guardian
Installation Protection Program. The Installation Protection
Program is a Family of Systems that supplements other
aspects of force protection against potential weapons of
mass destruction.

Following our successful completion of a vulnerability

assessment of military recruiting centers for approxi-
mately 2,700 locations, the U.S. Army Corps of Engineers

awarded SAIC follow-on work to provide security training
and develop design specifications for security upgrades.
We also provided engineering design services for the
access control points at Fort Hood military reservation in
Killeen, Texas – one of the largest landmass bases.

Science and Technology
Going forward, the DHS has challenged industry to
develop innovative technologies and new scientific tools
to protect our homeland, including chemical, biological,
radiological, and nuclear countermeasures.
While anthrax and smallpox threats pose major con-
cerns, effective bioagent surveillance must cover a much
wider spectrum. More than 500 bacterial species, 200 viral
species, and numerous fungi are dangerous to humans,
and many could serve as agents in a biological terror at-
tack. To counteract this threat, SAIC and Ibis Pharmaceuti-
cals are developing a system to detect a wide spectrum of
human pathogens – possibly hundreds or even thousands
simultaneously – and to do so with many samples daily.
The detection system will employ DNA microarray technol-
ogy to analyze samples for multiple pathogens, making it
superior to detection systems that can analyze for just one
pathogen at a time.

In the first testing of biological agents done outside
Dugway Proving Ground, Utah, SAIC led a joint opera-
tional test and evaluation of a biological point detection
system, a stand-alone detector/identifier that warns of the
presence of biological agents.

To reduce the false-alarm rates of chemical sensors, we

developed SmallCAD, a handheld chemical agent detec-
tion system. Being tested by the U.S. and UK, SmallCAD
uses several different chemical detection technologies.
For DHS, we are developing design concepts for the

next generation of mail screening facilities to combat
potential mail hazards, including chemical, biological,
radiological, and explosive threats.
With agriterrorism an increasing concern, SAIC also
developed a livestock emergency response tool – based

H O M E L A N D S E C U R I T Y

(Above) For the Virginia Port Authority in Norfolk, SAIC’s RadView system provides enhanced security at one of the

busiest ports in the U.S. The system consists of a radio frequency-based automatic equipment identification (AEI)

system, a linescan digital imaging system, and the AT-900 radiation screening system, developed by Exploranium G.S.

Limited (a division of SAIC Canada).

“

The FS/ISAC Board of Directors are thrilled with the progress SAIC has made

since taking over the operations in May 2003. The FS/ISAC has become the ‘gold

standard’ which other industry ISACs are seeking to emulate.”

Suzanne Gorman, Chairperson, FS/ISAC (Financial Services/Information Sharing and Analysis Center)

Following our successful completion of a vulnerability

assessment of military recruiting centers for approxi-
mately 2,700 locations, the U.S. Army Corps of Engineers

To reduce the false-alarm rates of chemical sensors, we

H O M E L A N D S E C U R I T Y

on a 3-dimensional geographical information system – for
the state of Illinois. Detecting the occurrence of a terrorist
act against the background of everyday plant and animal
diseases presents a unique opportunity to combine farm
surveillance, geographic information systems, and analyti-
cal modeling to monitor and alert to hazardous events.
Most important, the project not only detects terror-
ism, but aids the early detection of outbreaks of naturally

occurring diseases, thus also contributing to improved
agricultural productivity. We also provide technical support
to the U.S. Department of Agriculture (USDA) on a variety
of food safety and security issues. This work includes
food security vulnerability assessments for domestic and
imported food products regulated by the USDA, as well as
helping identify and implement countermeasures.

Commercial IT and
Telecommunications
Solutions

S A I C ’ s C O M M E R C I A L A N D T E L E C O M M U N I C A T I O N S T E A M S

Commercial & International Group President Randy Walker (fourth from left) with key business unit leaders:
Jim McCall (third from left) - Consulting & IT Professional Services;
Cheryl Louie - Oil & Gas Vertical; and
Kris Hillstrand (far left) - Utilities Vertical.

Telcordia CEO Matt Desch (fourth from right) with key business unit leaders:
John Roddy (third from right) - Global Implementation & Operations;
Teresa Vega - Wireless, Cable & Emerging Markets; and
Charles Koontz (far right) - Telecom Services Business Unit - who supports both the Commercial & International
and the Telcordia organizations.

As prime integrator, SAIC supported the U.S. Department of Homeland Security in deploying the first increment of US-

VISIT, a new program to enhance the nation’s security while facilitating legitimate travel and trade through our bor-

ders. US-VISIT requires that most foreign visitors traveling to the U.S. on a visa have their two index fingers scanned

and a digital photograph taken to verify their identity at the port of entry.

H O M E L A N D S E C U R I T Y

Commercial IT and
Telecommunications
Solutions

S A I C ’ s C O M M E R C I A L A N D T E L E C O M M U N I C A T I O N S T E A M S

As prime integrator, SAIC supported the U.S. Department of Homeland Security in deploying the first increment of US-

VISIT, a new program to enhance the nation’s security while facilitating legitimate travel and trade through our bor-

ders. US-VISIT requires that most foreign visitors traveling to the U.S. on a visa have their two index fingers scanned

and a digital photograph taken to verify their identity at the port of entry.

C O M M E R C I A L I T A N D

P R O F E S S I O N A L S E R V I C E S

“

(This work) exemplifies the benefits that can be realized by taking best practices

from SAIC’s Federal portfolio and applying them to the commercial market place.”

Mike Sutten, Vice President Information Technology, Royal Caribbean Cruises Ltd.

SAIC serves commercial customers in more than half the
world’s countries. Our global delivery capability allows
us to serve key industries that best leverage our deep
scientific and engineering heritage.

Telecommunications
Our wireline and wireless telecommunications solutions
help drive technological and business advances for leaders
in the automotive, energy, financial, health care, telecom-
munications, and transportation industries.

Through our network design, management consulting

and implementation services, we work to cut costs and
improve communications and operational efficiency for
our customers.

For example, our wireless/wireline interface man-
agement solution improves the transmission of critical
information across health care facilities as well as railroad
maintenance yards. Power plants and utilities rely on our
wireless infrastructure design to provide more reliable
voice communications across their enterprises.
Our telecommunications solutions – encompassing
voice-over-IP, VSAT, data, wireless, converged, and virtual
private networks – help optimize network resources,
performance, and service. For a major global company,
the next generation, managed virtual private network we
designed and continue to deploy provides international
reach, scalability, integration of disparate traffic types, and
support for new applications to provide reliable, cost-
effective connectivity for staff, suppliers, and clients.

Consulting, Systems Integration, Advanced
Technologies, and Outsourcing
Our management consultants work with clients to bench-
mark their companies’ performance, develop strategies to
enhance that performance, and align IT capabilities with
business goals. Clients rely on our expertise to extract
more value from growing stores of data, and to help them
retain workforce knowledge and skills, reduce operational
costs, and obtain the most value from operational assets.

We help customers improve work processes, redesign
jobs, and integrate new and legacy technologies and
architectures into real business solutions for challenges
such as complex reservoir structures and hostile environ-
ments faced by oil companies. As one example, we are
helping develop the “field of the future” for major global
oil companies. This next generation oil field integrates sys-
tems and technologies with new work processes with the
goal of realizing increases in production and reductions in
operating and facilities costs.
We provide leading-edge technologies to enable
clients to act quickly in today’s “sense and respond”
business environment.

For example, we developed an advanced text analytics

tool called Content Analyst™ to exponentially reduce
the time it takes to discern relevant information from
large volumes of documents and data. Developed to
support the U.S. intelligence community in the war on
terror, this technology also automates the analysis of
large masses of unstructured information for commercial
enterprises. Western Fuels, a not-for-profit cooperative of
coal producers serving consumer-owned electric utilities,
quickly and cost-effectively implemented this technology
to significantly reduce the time required to do research on
its climate change advocacy Web site. The tool accurately
identifies and categorizes conceptual similarities, allowing
users to find relevant articles by using their own choice
of words.
We provide operations and management support for
outsourced IT functions from 22 major sites worldwide.
We build lasting relationships with our customers to better
understand and meet their specific needs. This knowledge,
combined with our in-depth domain expertise and broad
IT capabilities, enables us to offer clients the advantages
of scale and increased speed to market.

For an energy industry leader, we rapidly transitioned

over 1,300 applications while maintaining very high
system availability and reliability. This enabled base
application support and maintenance costs to decrease

(Above) For Royal Caribbean Cruises Ltd., one of the world’s largest cruise companies, our quality software develop-

ment processes and experience in program management have provided a comprehensive application development

lifecycle that includes a Web-based distributed process guide. By working as teammates, we are meeting aggressive

schedules and budget requirements.

C O M M E R C I A L I T A N D

P R O F E S S I O N A L S E R V I C E S

“

(This work) exemplifies the benefits that can be realized by taking best practices

from SAIC’s Federal portfolio and applying them to the commercial market place.”

Mike Sutten, Vice President Information Technology, Royal Caribbean Cruises Ltd.

Through our network design, management consulting

and implementation services, we work to cut costs and
improve communications and operational efficiency for
our customers.

For example, we developed an advanced text analytics

For an energy industry leader, we rapidly transitioned

over 1,300 applications while maintaining very high
system availability and reliability. This enabled base
application support and maintenance costs to decrease

(Above) For Royal Caribbean Cruises Ltd., one of the world’s largest cruise companies, our quality software develop-

ment processes and experience in program management have provided a comprehensive application development

lifecycle that includes a Web-based distributed process guide. By working as teammates, we are meeting aggressive

schedules and budget requirements.

C O M M E R C I A L I T A N D P R O F E S S I O N A L S E R V I C E S

dramatically, quality to increase, and state-of-the-art
software tools to begin aiding documentation.

Industries We Serve

Oil and Gas. Calling on our long, successful experi-
ence serving the oil and gas industry, we provide a wide
range of services to reduce operations and facilities costs
and meet growing work environment challenges.
Our services range from program and change manage-
ment to value assessment, and IT and network architec-
ture development and implementation to new technology
integration.
Our environmental engineering and remediation
services are being used to develop safer and lower risk
work sites for our oil and gas customers. As a primary
supplier to ChevronTexaco, we help ChevronTexaco to
achieve operational excellence and reduce costs. We
also support ChevronTexaco in employing the highest
standards of environmental responsibility while making
safety the top priority at open and closed refineries, retail
and terminal facilities, and pipeline operations.

Utilities. Our support for utility companies – from IT
outsourcing and support services to business consulting
– helps them efficiently handle vast quantities of data,
reduce costs, and tap new sources of revenue.

For ScottishPower, we provide management of
outsourced facilities. Our services and business exper-
tise streamline processes from billing systems, payment
collection and processing, accounting systems, and asset
management to work scheduling and large industrial me-
tering data collection and validation. We recently helped
ScottishPower design and build a new reporting suite and
database that improved visibility and data quality and
provided a fully auditable process for income and debt
reporting.

SAIC works with Entergy to balance stringent IT

financial targets with high standards for internal customer
service. A full range of IT services has provided Entergy

with increased flexibility to respond to changing business
needs, while improving customer service and unit cost.
Our services, including process and economic
modeling, change control of systems deployment, and
benchmarking, solve challenges presented by an aging
U.S. utilities infrastructure.

SAIC services assisted the Midwest Independent
System Operator in making program decisions that
enhance the stability and reliability of the nation’s power
grid. To improve the transmission of power between
electric grid control areas, we helped the California
Independent System Operator develop tie-line metering
upgrade strategies for more reliable operations and more
effective cost allocation.

In addition, we played a key role in developing

PacifiCorp’s new business technology framework strategy,
which will guide operations for the next 10 years.

Pharma and Life Sciences. As mentioned in the
Federal Government section of this Annual Report, SAIC
is a top supplier of services for federal health institutes,
including research support and managing infrastructure
support for the National Cancer Institute at Frederick, a
federally funded research and development center.
Our expertise also benefits some of the world’s
largest pharmaceutical companies. For Pfizer’s global
R&D division, we are providing integration services to
support Pfizer’s acquisition of Pharmacia. As part of the
major data migration accompanying the acquisition,
we are addressing approximately 2,500 applications
and facilitating the establishment of a common meta
data model. We are also supporting a corporatewide
infrastructure consolidation program.

In addition to providing secure, high-performance
connectivity to Pfizer’s third-party partners, we are using
our ANX® Network, the only multiprovider private network
operating worldwide, to facilitate connectivity between
Pfizer and SAIC. The network is owned and managed by
our ANXeBusiness Corporation subsidiary.

“
Together, Entergy and SAIC have taken … customer satisfaction levels to

best-in-class levels while simultaneously implementing significant cost

improvements.”

Ray J. Johnson, CIO, Entergy

SAIC provides Entergy, a major energy company, with IT outsourcing services that include support for data center

operations. The data center (above) is home to the Entergy Command Theater, a state-of-the-art facility that pro-

vides real-time information about everything from the status of the network and mainframe production jobs to the

weather conditions that may be affecting Entergy’s external customers.

C O M M E R C I A L I T A N D P R O F E S S I O N A L S E R V I C E S

dramatically, quality to increase, and state-of-the-art
software tools to begin aiding documentation.

Industries We Serve

SAIC works with Entergy to balance stringent IT

financial targets with high standards for internal customer
service. A full range of IT services has provided Entergy

In addition, we played a key role in developing

PacifiCorp’s new business technology framework strategy,
which will guide operations for the next 10 years.

“
Together, Entergy and SAIC have taken … customer satisfaction levels to

best-in-class levels while simultaneously implementing significant cost

improvements.”

Ray J. Johnson, CIO, Entergy

SAIC provides Entergy, a major energy company, with IT outsourcing services that include support for data center

operations. The data center (above) is home to the Entergy Command Theater, a state-of-the-art facility that pro-

vides real-time information about everything from the status of the network and mainframe production jobs to the

weather conditions that may be affecting Entergy’s external customers.

C O M M E R C I A L I T A N D P R O F E S S I O N A L S E R V I C E S

Our Intelligent Intermodal Solutions improve efficiency, safety, and security at some of the world’s busiest ports,

including the Port of Los Angeles (above) and Port Elizabeth, New Jersey. Using digital video and optical character

recognition, our systems automatically identify containers as they enter and leave the terminal by ship, rail or

gate. The New Jersey system uses our VACIS technology to verify that empty containers are actually empty without

incurring labor costs for visual inspections.

International. Our SAIC Limited subsidiary works
with commercial clients and public sector government
agencies in the United Kingdom and Europe.
We provide expertise on UK security policies and
procedures as well as security systems such as our non-
intrusive Vehicle and Cargo Inspection System (VACIS)
used by the UK Immigration Service. SAIC Limited also
supplies VACIS units for ports in Sweden and Belgium and
maintains units in the Middle East, Ukraine, and Malta.
SAIC Limited consultants have also worked on mod-
ernization programs for the Cabinet Office, Department
for Trade and Industry, National Health Service, Depart-
ment for Work and Pensions, and Inland Revenue. Projects
include developing portals for data sharing and strategies
for new forms of public sector service delivery.

State and Local. Our solutions for state and local
governments facilitate information sharing and opera-
tional efficiency while improving safety and quality of life
for millions of people. Our solutions are as far ranging as
our clients’ needs.
As a team member providing San Diego County with IT
and telecommunications services, our support enables cit-
izens to gain better access to government services. During
the devastating wildfires in California in 2003, the county
commended SAIC for providing critical support. During the
disaster, county officials relied on our capabilities to help
coordinate resources and track the fire. We also performed
real-time development of a comprehensive, user-friendly
Web site that kept citizens informed.

In Fontana, California, we are planning an advanced
communications network to link businesses, schools, hos-
pitals, and homes with a city-owned fiber-optic infrastruc-
ture. The network received the Corporation for Education
Network Initiatives in California Innovations Award.

The criminal history system we developed for the state
of Kentucky increased the accuracy and quality of criminal
justice data while making it easier for participants in the
global justice network to exchange data. It did so by being

one of the first such systems in the U.S. to incorporate
Global Justice XML Data Dictionary technology.

Together with the International Association of Chiefs
of Police, SAIC sponsors the Volunteers in Police Service
(VIPS) Award. In keeping with the VIPS program, estab-
lished under the 2002 USA Freedom Corps initiative,
the award encourages state and local law enforcement
agencies to use volunteers to help communities prevent,
prepare for, and respond to crime, natural disasters, and
other emergencies.
Our environmental scientists and engineers support
resource management, restoration, and planning projects
for numerous state and local customers. For the past 15
years, we have supported assessments and evaluations of
the best means of remediation for wetland, terrestrial, and
marine environments for the state of Washington.

In California, we work for numerous public agencies,

including the Ports of Los Angeles, Long Beach, and
Oakland, providing environmental planning for new
facilities development. In Florida, we assist in the
management of the state Department of Environmental
Protection’s stormwater permitting program.

Port Security. For commercial customers, as well as
government customers (as mentioned in other sections of
this Annual Report), we provide integrated systems that
enhance security and safety, without slowing the flow
of commerce. Our intelligent intermodal solutions apply
flexible combinations of advanced scanning and image-
processing technologies to increase terminal productivity,
efficiency, accuracy, security, and safety at cargo terminals.
For example, Maher Terminals, the largest marine
terminal operator on the East Coast of the United States,
selected SAIC to install a revolutionary gate processing
system. The system will support Maher’s growth as it more
than doubles its current gate throughput to more than
10,000 containers per day. Located at Port Elizabeth, New
Jersey, the system will combine automation with non-
intrusive inspection.

C O M M E R C I A L I T A N D P R O F E S S I O N A L S E R V I C E S

Our Intelligent Intermodal Solutions improve efficiency, safety, and security at some of the world’s busiest ports,

including the Port of Los Angeles (above) and Port Elizabeth, New Jersey. Using digital video and optical character

recognition, our systems automatically identify containers as they enter and leave the terminal by ship, rail or

gate. The New Jersey system uses our VACIS technology to verify that empty containers are actually empty without

incurring labor costs for visual inspections.

one of the first such systems in the U.S. to incorporate
Global Justice XML Data Dictionary technology.

In California, we work for numerous public agencies,

T E L E C O M M U N I C A T I O N S

(Above) To enable future wireless services such as high-quality streaming video for mobile users, dramatic increases

in wireless link performance are needed. Telcordia’s Advanced Wireless Signal Processing Lab is at the forefront of

high-capacity Multi-Input Multi-Output (MIMO), array-to-array communications, which meet this need. Designs from

the lab have been demonstrated to outperform other technologies in the field. The wireless group works closely with

commercial and government customers to develop solutions that push the boundaries of wireless performance.

Last fiscal year, our Telcordia Technologies subsidiary
unveiled a new business philosophy, accompanied by a
new set of products, all of which can be summed up in
one word – Elementive™.

The Elementive approach revolves around open-
ness and flexibility in customer relationships, in product
partnering, and in software architecture. Elementive helps
customers extend their infrastructure investments, stream-
line their operations, introduce new services more easily
and quickly, and reduce their total cost of ownership. The
Elementive approach stretches across Telcordia offerings
from professional services and new generation wireline
and mobility products, to the core software systems that
have been at the heart of the North American telecommu-
nications backbone for over two decades.

The Elementive philosophy and product portfolio
launch garnered considerable attention from custom-
ers, partners, analysts, and even competitors, in both the
Americas and Europe. As Owen Wiberg, vice president at
Canadian carrier Telus, put it, “I’ve experienced the new
Telcordia, and I like what I’ve seen.” But more importantly,
the energy of the Elementive launch gained momentum
throughout the year, with new product introductions, new
partnering, new customer wins, and new technological
breakthroughs.

Elementive Portfolio
The Elementive product portfolio provides carriers with
the choice of highly reliable, highly scalable, off-the-shelf
products that allow for the flexibility to invest in individual
or multiple components without the cost or time associ-
ated with product customization and integration.

The list of modular and configurable products, based
on open industry standards such as J2EE and TMF 513, in
the Elementive portfolio is impressive: software products
that cover the entire telecommunications value chain,
allowing carriers to create, activate, deliver, and manage
voice and high-bandwidth data services. The Elementive
Portfolio covers the technology gamut including optical,

wireless, cable, DSL, and Internet Protocol (IP) networks.
In addition, Telcordia began to open up its core
wireline systems with more configurable interfaces and
industry-standard Application Programming Interfaces
(APIs), helping longtime customers integrate more freely
and cost-effectively with emerging technologies. These
widely deployed products are part of what’s known as
the Elementive CE Portfolio, as they are integral to the
continuing evolution of Telcordia.

Telcordia also added Fiber-to-the-Premise (FTTP)
support to Telcordia® Network Engineer, increasing the
product’s already impressive list of credentials. Network
Engineer geospatially documents and designs an end-to-
end model of all a customer’s network elements, and fa-
cilitates seamless data integration and better flowthrough
among systems on multitechnology networks.

Mobility
One of the most impressive examples of a specific product
success last year was the industry-wide deployment of
Telcordia® Service Management Gateway for Wireless
Number Portability (WNP). The Federal Communications
Commission mandated that by November 23, 2003, all
mobile phone users would be able to keep their phone
numbers if they so desired when switching providers. In a
nutshell, Service Management Gateway for WNP provided
carriers with a seamless and automated way to port num-
bers, and to track, report, and support the transactions.

In the first three months after the deadline, Telcordia
software successfully ported more than 2 million numbers
with no technology failures reported. Today, as much as
90% of all porting traffic goes through Service Manage-
ment Gateway for WNP software, with seven out of
the eight largest U.S. mobility carriers using the Service
Management Gateway for WNP process to port numbers.
This open, flexible platform has enabled Telcordia to
become the market leader in offering comprehensive fixed
and mobile number portability worldwide. Telcordia was
awarded a five-year exclusive contract from Greece’s

T E L E C O M M U N I C A T I O N S

(Above) To enable future wireless services such as high-quality streaming video for mobile users, dramatic increases

in wireless link performance are needed. Telcordia’s Advanced Wireless Signal Processing Lab is at the forefront of

high-capacity Multi-Input Multi-Output (MIMO), array-to-array communications, which meet this need. Designs from

the lab have been demonstrated to outperform other technologies in the field. The wireless group works closely with

commercial and government customers to develop solutions that push the boundaries of wireless performance.

Last fiscal year, our Telcordia Technologies subsidiary
unveiled a new business philosophy, accompanied by a
new set of products, all of which can be summed up in
one word – Elementive™.

T E L E C O M M U N I C A T I O N S

National Telecommunications and Post Commission
(EETT) to help provide number portability to Greece’s 6
million fixed and 10 million mobile phone lines. Under
the contract, Telcordia will provide the number portabil-
ity clearinghouse software as well as serve as the prime
contractor.

Service level management and service assurance
represent other major challenges for wireless carriers.
O2 in Germany and Orange PCS UK have already called
upon Telcordia to provide solutions. O2 Germany selected
Telcordia® Service Director software because it operates
independently of network technology, provides an end-
to-end view of the network to maximize quality of service,
and includes an extensive service library that enables O2
to quickly offer new content, services, and applications,
all of which result in increased network performance and
better customer service.

In addition, Orange PCS – the UK’s most popular
mobile phone service with over 13 million customers
– selected the award-winning Telcordia® Service Assur-
ance Solution and will now evaluate the product in a trial
of performance and service quality management on its
General Packet Radio Service (GPRS) core network.

Leading mobile operators in North America and Europe

depend on Telcordia to improve their competitiveness as
well. Twelve customers in 11 countries currently use the
Telcordia® ISCP® System to create new service offerings
that attract wireless customers. For example, Virgin Mobile
added its one millionth customer, little more than a year
after the inception of its U.S. network, with the aid of
the ISCP System, Telcordia® SPACE® Service Creation &
Provisioning System, Telcordia® Open Services Platform,
and Telcordia engineering support. Virgin Mobile’s U.S.
network has operated since the beginning with no service
interruptions.

Partnering
In keeping with its Elementive philosophy and commit-
ment to customers as well as the Telecommunications

industry, Telcordia continually strives to find new and
creative ways to work with like-minded companies from
around the world. That’s why Telcordia launched its
“Teaming with Telcordia” program in 2003. Through this
program Telcordia has teamed up with “carrier-grade”
providers, each of which brings to the relationship a
complementary set of products and services as well as
their own customer base and geographic presence.

The critical advantage for customers is that they’re
able to expand their technical options, while maintaining
long-standing relationships with firms they’ve come to
trust.

Telcordia currently offers its customers implementation
services and expertise through leading partners including
Atreus Systems, Cap Gemini Ernst & Young, CoManage,
ConceptWave, Dimension Data, Granite Systems, IBM,
Micromuse, Openet, and Sheer Networks, thereby
extending Telcordia’s market coverage and services
offerings. Each partner has been carefully selected to
support Telcordia’s strategic priority to provide customers’
with choice and value.

Research and Development
Telcordia Applied Research and Software Systems used a
new model and tool-based systems engineering approach
for service management software for a major U.S. service
provider, exploiting the new tool-suite for STructure
Requirements and Interface DEsign (STRIDE).

This new approach exploited Unified Modeling

Language (UML) and eXtensible Markup Language (XML)
technologies, enabled formal specification of both inter-
face message definitions and their business rules, provided
rapid response to changes in customer requirements, and
automatically generated documentation. The new ap-
proach achieved cost savings and visible improvement in
software quality for the service provider.

“

When I look back on what we accomplished, I don’t think we would have

made our timeline without Telcordia, and I sometimes think we wouldn’t have

launched at all. Telcordia has been integral to our success.”

Mike Parks, Chief Information Officer, Virgin Mobile USA

To automate “flowthrough,” that is, the processing of changes made in telephone carrier’s passive optical networks,

Telcordia is creating open standards software (being demonstrated at the Telcordia customer briefing center above).

The software will unite core systems used for many years in Regional Bell Operating Companies (RBOC) operations

centers and new next generation Operations Support Systems, overlaying them with a single, integrated graphical

user interface.

T E L E C O M M U N I C A T I O N S

Leading mobile operators in North America and Europe

Partnering
In keeping with its Elementive philosophy and commit-
ment to customers as well as the Telecommunications

The critical advantage for customers is that they’re
able to expand their technical options, while maintaining
long-standing relationships with firms they’ve come to
trust.

This new approach exploited Unified Modeling

“

When I look back on what we accomplished, I don’t think we would have

made our timeline without Telcordia, and I sometimes think we wouldn’t have

launched at all. Telcordia has been integral to our success.”

Mike Parks, Chief Information Officer, Virgin Mobile USA

To automate “flowthrough,” that is, the processing of changes made in telephone carrier’s passive optical networks,

Telcordia is creating open standards software (being demonstrated at the Telcordia customer briefing center above).

The software will unite core systems used for many years in Regional Bell Operating Companies (RBOC) operations

centers and new next generation Operations Support Systems, overlaying them with a single, integrated graphical

user interface.

E M P L O Y E E O W N E R S H I P

“

Employee ownership creates the excitement to attract and retain the best and

the brightest – it is part of our enduring brand.”

Ken Dahlberg, SAIC Chief Executive Officer

Employee ownership is a key dif-
ferentiator for SAIC, especially in
today’s challenging environment,
where creativity and initiative
are crucial in solving customers’
complex problems. Our employee-
ownership system helps us attract
and retain the best and brightest
scientific, technical, engineering,
and managerial professionals with
the highest ethical standards. It
motivates them to better under-
stand our customers’ businesses
and needs. By thinking and acting
like owners, our employees develop
innovative solutions and deliver
outstanding performance for our
customers.

“For 35 years, employee owner-

ship has been one of the funda-
mental cornerstones and hallmarks
of SAIC. We will keep our employee
ownership model alive, growing
and vital by focusing on growth,
entrepreneurship, serving our
customers, and increasing our em-
ployees’ shareholder value,” says
Ken Dahlberg, SAIC Chief Executive
Officer.

“Our vision today is to grow the
value of the company and to gener-
ate the excitement to attract and
retain the right people – the best

and the brightest – to help SAIC
continue to be one of the largest
and most successful employee-
owned companies in the world.”
At SAIC, employee ownership
is a responsibility as well as a
privilege. By actively participating
in employee committees, company-
wide “town hall” meetings, and
other forums, our employees
gain a greater understanding of
SAIC’s business, its customers,
and markets. By owning stock in
our company, employees reap the
rewards of their work when SAIC
succeeds, contributing to both the
company’s financial success and
their own.
With SAIC continuing to grow
and new employees joining our
talented team, we developed a
C.E.O. (Certified Employee Owner)
program in FY04 to expand our
employee-owners’ knowledge and
understanding of our business and
the markets that we serve, and
the opportunities for increasing
their ownership stake in SAIC. The
C.E.O. training program has been
delivered to over 9,500 employees
worldwide. C.E.O.s are champions
for our clients and our company.

To encourage all employees to

become owners, the company
provides several ways to acquire
stock – including the Employee
Stock Purchase Plan through
payroll deductions, performance-
based stock incentives, and direct
purchases in SAIC’s quarterly mar-
ket. Employees also gain ownership
through the company’s 401(k) and
retirement plans. SAIC retirement
plans, current employees, directors,
and their families own approxi-
mately 83% of our stock.

SAIC stock is not traded on
a national securities exchange;
however, our wholly owned broker-
dealer subsidiary, Bull, Inc., oper-
ates a quarterly internal market.
The stock trades in the limited
market at the fair market value
stock price determined by the
Company’s Board of Directors with
the assistance of a internationally
recognized independent appraisal
firm.

Stockholders who understand

that our company is managed
for the long term saw a 10-year
annualized stock price growth
of 26.3% on their stock. Owning
and holding SAIC stock is the
foundation of our ownership
culture and success.

E M P L O Y E E O W N E R S H I P

“

Employee ownership creates the excitement to attract and retain the best and

the brightest – it is part of our enduring brand.”

Ken Dahlberg, SAIC Chief Executive Officer

“For 35 years, employee owner-

“Our vision today is to grow the
value of the company and to gener-
ate the excitement to attract and
retain the right people – the best

To encourage all employees to

Stockholders who understand

T E A M S A I C

“

Hiring and retaining the right people is critical to our success. Our important

Occupational Category
72%
Professional Technical
Managerial
14%
Professional Administrative 14%

Academic Degree Level
7%
Ph.D.
38%
Master’s Degree
55%
Bachelor’s Degree
Degree holders represent 74% of the professional staff.
(These figures do not include subsidiaries not on our
Human Resources system, foreign entities, or DS&S.)

Years of Industry Experience
77%
More than 10 years
15%
5-10 years
8%
Less than 5 years

Academic Degree Discipline
48%
Sciences
Engineering
19%
Business/Economics/Law 20%
13%
Humanities

assets go home every day.”

Ken Dahlberg, SAIC Chief Executive Officer

At SAIC, our diverse and exciting
opportunities attract top talent
from many fields. Few employers
can match our wide array of
opportunities, including the chance
to contribute to important efforts
to defeat terrorism, to find better
energy solutions, to protect the
environment, and to improve
health care.

This kind of opportunity is
one reason our retention rate is
so high. Another reason is our
internationally recognized training,
education, and professional
development programs offered
through SAIC University. They
play a vital role in helping
employees develop, maintain and
extend technical, leadership, and
professional skills, which help our
employees perform better for our
customers.

In addition to classroom
training, distance learning, and
onsite certificate and advanced
degree university programs held
at key locations, all employees
can participate in our e-learning
program, which provides
certifications and 2,000 of the most

in-demand business, leadership,
and IT courses. We also keep
employees on the cutting-edge
by offering courses in geographic
information systems, imagery
science and exploitation, and Web
development.

Employee Benefits
SAIC provides its employees with
benefit choices designed to suit
their needs and the needs of their
families and eligible domestic
partners.

Employees may choose between
SAIC self-insured medical plans and
health maintenance organizations
at most locations. The company
also offers eligible employees
programs for dental insurance, life
insurance, and disability coverage.
Other benefits include com-
prehensive leave, holidays, tuition
reimbursement, and accident and
business travel insurance.

In Fiscal Year 2004, SAIC

contributed more than $592 million
to these benefit plans.

Retirement Plans
SAIC retirement plans help

employees finance their retirement.
Eligible employees can take
advantage of our Employee Stock
Retirement Plan and our 401(k)
Profit Sharing Plan, which has a
Company matching contribution.
During the year, the Company
contributed about $103.5 million to
these plans. At the end of calendar
year 2003, overall plan assets
were approximately $4.2 billion.
(These numbers include only SAIC
Retirement Plans.)

Employees invest their
retirement assets in SAIC stock
and mutual funds. The funds offer
a spectrum of investment vehicles
and provide individual control over
investment alternatives with the
exception of the non-exchangeable
SAIC company stock funds.
As of December 31, 2003, 55.6%
of the SAIC Retirement Plans were
invested in SAIC common stock.
This represented approximately
39.3% of the total outstanding
shares of SAIC common stock.
The retirement plans – including
Telcordia and AMSEC 401(k) plans –
held 43.1% of the total outstanding
shares of SAIC common stock.

T E A M S A I C

“

Hiring and retaining the right people is critical to our success. Our important

Occupational Category
72%
Professional Technical
Managerial
14%
Professional Administrative 14%

Years of Industry Experience
77%
More than 10 years
15%
5-10 years
8%
Less than 5 years

Academic Degree Discipline
48%
Sciences
Engineering
19%
Business/Economics/Law 20%
13%
Humanities

assets go home every day.”

Ken Dahlberg, SAIC Chief Executive Officer

Employee Benefits
SAIC provides its employees with
benefit choices designed to suit
their needs and the needs of their
families and eligible domestic
partners.

In Fiscal Year 2004, SAIC

contributed more than $592 million
to these benefit plans.

Retirement Plans
SAIC retirement plans help

F O U N D E R ’ S M E S S A G E

It is hard to believe that it was

35 years ago – on February 3,

1969 – when SAIC got its start.

Our history has played an im-

portant role in defining what

we are today. So let me men-

tion first why I founded SAIC.

Thirty-five years ago I was the manager of a self-sup-
porting government contract research organization at an-
other company. What I observed was that the government
was not always getting the best technical support from
private contractors on its national security projects. I found
this to be unacceptable because our country needed the
best help it could get in the national security area. So,
providing quality work on national security problems at a
fair price was the major motivation behind the founding of
SAIC in 1969. I believe we have succeeded in this.

“
I’ve had the privilege to work side-by-side with very talented, high-caliber

individuals that are the envy of our competitors.”

Dr. J. Robert Beyster, SAIC Founder

We were able to recruit some leading technologists
and they were happy to join our little start-up company
because of the opportunity for ownership. However, as
with many small companies, one of the biggest challenges
we faced was establishing credibility with our custom-
ers – we were small and unknown. As the number of
contracts grew, our performance spoke for itself.

I can’t tell you where we would be without employee

ownership, but I am convinced that we would not be
where we are today. Shared ownership, wide participa-
tion, and shared responsibility have created an effective
entrepreneurial environment throughout SAIC with not
just a few owners at the top, but many owners.

Soon we began to experience rapid growth. The com-
pany culture attracted many known experts – their work
was important to government and commercial customers.
As scientists, they wanted to work on important
programs. As owners, they wanted to bring in more
significant contracts. Company growth meant more
opportunities for the ambitious to rise through the
management ranks.

I believe that our employee ownership culture is one
of our best discriminators, ensuring interest in satisfying
customers’ needs. Employee ownership has given us the

flexibility to react to our customers’ needs in ways other
companies cannot.

Throughout our history, we also have done some
impressive work for our customers outside of national
defense, especially in the areas of commercial IT and
telecommunications.

In the 35 years that I’ve helped this company grow,

I’ve had the privilege to work side-by-side with very
talented, high-caliber individuals that are the envy of our
competitors. SAIC’s customers recognize our willingness
to take on the nation’s most complicated technical chal-
lenges and, importantly, our dedication and commitment
to getting the job done. I believe that my dedication to
helping our government on issues of national importance
is reflected in all of our employees, and for that I am truly
proud.

Together, we have built a premier company that is
highly respected in government and commercial circles.
Not only have we built a company that is filled with tal-
ent, but SAIC also is known for its professionalism, for its
sense of value and ethics, and for its entrepreneurial spirit.
A tremendous number of people have contributed to
our growth and success over the years. I thank all of them
for their exceptional efforts and their future contributions.

F O U N D E R ’ S M E S S A G E

It is hard to believe that it was

35 years ago – on February 3,

1969 – when SAIC got its start.

Our history has played an im-

portant role in defining what

we are today. So let me men-

tion first why I founded SAIC.

“
I’ve had the privilege to work side-by-side with very talented, high-caliber

individuals that are the envy of our competitors.”

Dr. J. Robert Beyster, SAIC Founder

I can’t tell you where we would be without employee

I believe that our employee ownership culture is one
of our best discriminators, ensuring interest in satisfying
customers’ needs. Employee ownership has given us the

flexibility to react to our customers’ needs in ways other
companies cannot.

Throughout our history, we also have done some
impressive work for our customers outside of national
defense, especially in the areas of commercial IT and
telecommunications.

In the 35 years that I’ve helped this company grow,

B O A R D o f D I R E C T O R S

J.R. Beyster
Founder and Chairman of
the Board

W.A. Downing
General, U.S. Army (Ret.)

H.M.J. Kraemer, Jr.
Former Chairman, President
and Chief Executive Officer,
Baxter International, Inc.

K.C. Dahlberg
Chief Executive Officer and
President

D.P. Andrews
Corporate Executive Vice
President, SAIC

W.H. Demisch
Financial Consultant

J.A. Drummond
Vice Chairman, BellSouth
Corp. (Ret.)

D.H. Foley
Executive Vice President,
SAIC

J.E. Glancy
Executive Vice President,
SAIC

C.B. Malone
President, Financial &
Management Consulting Inc.

S.D. Rockwood
Executive Vice President,
SAIC

E.J. Sanderson, Jr.
Retired Oracle
Corporation Executive

M.E. Trout, M.D.
Chairman of the Board,
Cytyc Corporation (Ret.)

R.I. Walker
Corporate Executive Vice
President, SAIC

J.P. Walkush
Executive Vice President,
SAIC

J.H. Warner, Jr.
Corporate Executive Vice
President, SAIC

M.J. Desch
Chief Executive Officer, Telcordia
Technologies

A.K. Jones
University Professor, Computer
Sciences, University of Virginia

R. Snyderman
Executive Dean of the School of
Medicine, President and CEO,
Duke University Health System

A.T. Young
Executive Vice President,
Lockheed Martin Corp. (Ret.)

SAIC has more than 14,000 employees in the greater Washington, D.C. area. Our largest facility in the area is the 620,000-square-foot Towers complex in McLean, Virginia (above).

S T R A T E G I C L O C A T I O N S
United States
SAIC has employees in 48 states and the District of
Columbia. The largest concentrations of employees
are in San Diego, the greater Washington, D.C.
area, the greater Hampton Roads area of Virginia,
and northern New Jersey.

I N D E P E N D E N T A U D I T O R S

Deloitte & Touche LLP, San Diego, California

Produced by: SAIC Communications
Project Director: Nola Smith
Art Director: Dave Poehlman
Principal Photographer: Wilson North
Principal Writers: Bruce Hasley, Greg Pankauski, Nola Smith
Associate Writer: Rozlyn Reece
Associate: Susan Harrington
Printer: Rush Press

International
SAIC has employees in 50 countries, including:
Europe: Belgium, Bosnia, Czech Republic, England,
France, Germany, Ireland, Scotland, Italy, Spain
North America: Canada, Cuba
Middle East: Egypt, Saudi Arabia, Turkey
South America: Colombia
Pacific Rim: Guam, Japan, South Korea

Statements in this Annual Report other than historical data and information may
constitute forward-looking statements that involve risks and uncertainties. A number
of factors could cause actual results, performance, or achievements to be very different
from the results, performance or achievements expressed or implied by such forward-
looking statements. Some of these factors include, but are not limited to, the risk factors
set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended Janu-
ary 31, 2004, and in such other filings that the Company makes with the SEC from time
to time. Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date hereof.

B O A R D o f D I R E C T O R S

J.R. Beyster
Founder and Chairman of
the Board

W.A. Downing
General, U.S. Army (Ret.)

H.M.J. Kraemer, Jr.
Former Chairman, President
and Chief Executive Officer,
Baxter International, Inc.

K.C. Dahlberg
Chief Executive Officer and
President

D.P. Andrews
Corporate Executive Vice
President, SAIC

W.H. Demisch
Financial Consultant

J.A. Drummond
Vice Chairman, BellSouth
Corp. (Ret.)

D.H. Foley
Executive Vice President,
SAIC

J.E. Glancy
Executive Vice President,
SAIC

C.B. Malone
President, Financial &
Management Consulting Inc.

S.D. Rockwood
Executive Vice President,
SAIC

E.J. Sanderson, Jr.
Retired Oracle
Corporation Executive

M.E. Trout, M.D.
Chairman of the Board,
Cytyc Corporation (Ret.)

R.I. Walker
Corporate Executive Vice
President, SAIC

J.P. Walkush
Executive Vice President,
SAIC

J.H. Warner, Jr.
Corporate Executive Vice
President, SAIC

M.J. Desch
Chief Executive Officer, Telcordia
Technologies

A.K. Jones
University Professor, Computer
Sciences, University of Virginia

R. Snyderman
Executive Dean of the School of
Medicine, President and CEO,
Duke University Health System

A.T. Young
Executive Vice President,
Lockheed Martin Corp. (Ret.)

SAIC has more than 14,000 employees in the greater Washington, D.C. area. Our largest facility in the area is the 620,000-square-foot Towers complex in McLean, Virginia (above).

I N D E P E N D E N T A U D I T O R S

Deloitte & Touche LLP, San Diego, California

35Years

of Employee Ownership

S A I C 2 0 0 4 A N N U A L R E P O R T

s a i c . c o m