On September 27, 2013, Science Applications International Corporation — the largest pure-play intelligence contractor in the United States — completed its split into two publicly traded companies. The parent company changed its name to Leidos, emerging as a $6 billion technology company focused on defense, intelligence, health, and engineering solutions. A spun-off $4 billion unit retained the SAIC name, focusing on IT services and direct support to government organizations. The split represented the most significant corporate restructuring in the intelligence-contractor industry since the Carlyle Group's acquisition of Booz Allen Hamilton in 2008.
SAIC had been founded in 1969 by J. Robert Beyster, a physicist who built the company into a colossus of intelligence contracting. By the time of the split, SAIC had been involved in some of the most consequential — and controversial — intelligence programs of the post-9/11 era. It had led the failed Trailblazer program at the NSA, consuming over $1.2 billion before cancellation. Its employees and those of its subsidiary Titan Corporation had been implicated in interrogation abuses at Abu Ghraib. It held major contracts with the NSA, CIA, DIA, and virtually every other intelligence agency.
The stated rationale for the split was to resolve "organizational conflict of interest" rules that prevented a single company from both developing systems and competing for the contracts to operate them. As Leidos Chairman John Jumper explained, the separation would "completely remove our conflict of interest, which for Leidos opens opportunities of about $37 billion a year that we didn't have before." In other words, the intelligence-contracting market was so large and lucrative that a single $10 billion company had to become two companies to capture more of it.
The split illustrated how intelligence privatization had become self-reinforcing. Government procurement rules designed to prevent conflicts of interest were not constraining contractor growth — they were incentivizing corporate restructuring to capture even more government spending. Leidos would go on to acquire Lockheed Martin's IT division in 2016 for $4.6 billion, becoming the largest IT provider to the U.S. government. The new SAIC acquired Engility Holdings in 2019. Both companies continued to grow, demonstrating that the intelligence-contractor ecosystem had reached a scale where even splitting a company in two produced two entities that each independently grew larger than the original.