On Monday, SAIC (NYSE: SAI ) announced it has won a contract to provide command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) services to the U.S. Army's Communications-Electronics Research Development & Engineering Center (CERDEC) Command.
This is a "multiple-award, indefinite-delivery / indefinite quantity" (IDIQ) contract. Essentially, what these terms mean is that this is an umbrella contract, under which more than one company (in this instance, SAIC and one other firm, the identity of which SAIC did not specify in its press release) is authorized to compete for multiple, smaller awards on specific contracts up to a certain ceiling value for all contracts.
The main contract here has a one-year term, potentially to be followed by four one-year extensions. If all options are exercised, SAIC says the contract should be worth approximately $263 million over the five years. Of course, there is no certainty that all of these revenues will go to SAIC.