EGL
#The answer to your first question is that it was all through SG&A and that we're looking at somewhere in the neighborhood of an additional $4 million for the year.
I think that basically, we could talk about more in the fourth quarter then in the second and third.
I don't have an exact number for the $4 million.
We did.
I think we had it in the script.
I think we said it was low 30s going forward.
So for this year, I think, we talked about this and we did the reconciliation.
There was a total of about $350-ish million rolling off in different ways.
That includes what we factor for our re-competes, it includes programs that have come to an end or coming to an end or are being de-scoped.
We also talked about the fact that [then] publicly that we believe that, that number is going to mitigate in 2017.
I don't have an exact number here for you now.
As <UNK> said, we're going to be getting into 2017 shortly.
Again, we're replacing that with the new business.
We indicated that on the offset of the year that new business was going to be about 7% ---+ 6% to 7% and that re-compete was about 15% of the business that we had to replace.
It was also obviously, some base from stretching the base.
Let me just comment.
We are seeing ---+ of course, the last few years things have gotten quite slow.
We saw what would be perhaps a normal 6 to 12 month kind of submittal to award timeframe go much, much longer.
We're now seeing ---+ and its few very data points, but that customers are very concerned about the long time lag.
They are working to shorten that up.
We see a slight uptick ---+ of course, the two that we won here early in the quarter, if we did kind of a pro forma on last year to this year, we think we're seeing about a 17% improvement in the adjudication timeframe.
We talked about the three focus areas that we have, being space, intel and fed civ, as we brought the company together we did see some real revenue synergy opportunities, in both DoD and fed civ, but fed civ going perhaps little bit bigger and faster, as far as where our capabilities lie.
We're going to continue to play our strong space heritage.
We've got 40 some years.
We have supported over 240 launches.
We'll take existing customers in DoD, in intel space, be looking at where we can play that forward into NASA.
It really is, in my mind, all about taking the new mix of capabilities we have, very thoroughly going through our client base, what are their needs, and where do we now have an additional opportunity that we didn't have before, by the combination of the TASC and Engility teams.
You know Engility historically had about 1% in the intel world.
Now, we're over 30%.
So you'll see ---+ I guess I should've commented certain customers have certain buying habits, certainly in the work that we do on the intel and space, has historically been cost-plus so you'll see from a historical Engility, a little bit more on the cost-plus side due to that new kind of portfolio mix of the company.
I think some of it, Chris, might just be nomenclature.
We've long had a Vice President of Human Resources Development, People Assets, Training Development, those kinds of responsibilities.
I think what we're just flagging here is, CHRO is really now kind of an industry best practice.
I think acknowledging the importance, it's a C-suite job, and that is ---+ couldn't be more true than in our business where people are the engine and they drive every bit of our business.
So understand that we have to go through a process here to get the total backlog ---+ rolled up, given that we pulled the two companies together and integrated.
One had an automated way and one didn't.
So what I'm giving you is a estimate, our best estimate, of where it was probably somewhere around $3 billion in Q4.
Thanks, <UNK>.
So on the business development side we talked last time about the increase, that we've been reducing our indirect spend, we are increasing the share of the spend that is going to business development and our investment in capture activities, as far as earlier.
Doing the right thing at the right time, the right way.
We're increasing the size of the bids so we'll submit $5 billion, we're talking about this year of new business as our objective.
That's 25% more than last year but its not 25% more bids, it's about the same number of bids.
They're about 25% larger on average.
Starting earlier interacting with the customer, developing our solutions and vetting it with the customer before an RP comes out, are all best practice activities that we're applying.
We see some early evidence of success with the awards this quarter of the re-competes on DiTra and TSA.
We have a few proposals in evaluation now, where we're seeing our scores and we see them at the very high end of the scale and we like what we're seeing there.
That's really good evidence.
Those contracts have not gone to award yet, we're in discussions, but it's evidence that the work that we've been doing is leading to the outcome that we were after, which is a highly rated proposal; and with the highly rated proposal our probability of win, I think, goes up.
Those are the kinds of things that we are working on.
If I can just add one of the things that we are doing and we are doing it with a lot of rigor is really ---+ it's one thing to say we're going to start early and we're going to do the four or five things that are standard good business practice on the capture side.
We are also being incredibly thorough at saying, what capabilities do we have and how does that match the customer mission, what problem are they trying to solve, how do we do it.
And in the case where, this is the case in many opportunities, we're trying to take away business from a competitor, we have to be convinced that what we offer is worth the risk to the client of transitioning that business.
So we have to focus and pick the right deal that sounds easy, but exercising that discipline of saying no to things, when you're trying to grow business is not easy; and we're paying a lot of attention to what are those right things.
Funded contracts are 563 and funded orders is $563 million.
We are investing as we said and ---+ but that's not what's driving this number.
That's really a number that was driven by a significant amount of severance this quarter.
Not all of that, obviously would be repeatable in the future.
Another point, <UNK> you made a comment about the cost of the additional benefits.
All that was in our plan for the year.
There's nothing that we're doing here which is spending more money, it's how we're spending the money that we had planned in the most effective way.
About $9,800.
Our prime contract work is about 82%.
Yes, <UNK> I'll be happy to.
I think we are seeing a number of our clients step away from LPGA and move back towards best value contracting.
It's a logical reaction to a number of agencies letting ---+ contracts that are very low priced, those contracts were then not able to staff and they actually were not able to complete the work.
And in many of our clients as you know, that's a mission impact when work doesn't get done very important things don't happen.
So again, I wouldn't say it's an industry trend, but we are seeing of view more best values ---+ what we're going to keep our eye on is whether or not a client says it's best value or not, will they award only to the lowest bidder.
So I think the jury is a bit out on that.
I will say that we are not ever going to get totally focused on just price.
There's a lot of components to offering a solution to your customer.
Cost has been a very, very important.
It will remain important.
We'll keep our eye on that but we're going to be really concentrating on what's the complete solution.
It's about 75% to 80%.
Somewhere in that range.
I guess, I would say I think the world is changed.
I think it would not be good thinking on our part to think we're going to go back to three to five years.
So when I look at our backlog and other things, I think the new reality will remain with this kind of a two-year ---+ we might have options, but the days of getting a five-year contract and five option years and then getting another five on top of that, I think are gone.
Yes.
I could talk a little bit about it, <UNK>.
Our bookings environment, I think we've been very clear about thing very studious about selecting larger opportunities where we can put together the right change, offer the right solutions.
We're going to continue to do that.
I think that ratio of about 70% to 80% has been consistent at least over the last year.
So that, we have not seen a big shift there.
We're going to probably see, as we just mentioned, contracts running a little bit shorter, two or three.
So we have to adjust our thinking on how we evaluate our performance relative to backlog.
But I do think the clients ---+ they understand, just like all of us do, that the longer the time between when we submit bids and when they award, the more things can change in their world or a requirement can be antiquated.
That is the one area that I do anticipate a little bit more improvement.
I don't think it will be drastic.
I think we'll see a little bit faster adjudication rate.
Yes, we have two more in Q2 that we have queued up.
The combination of which is about $900 million.
So under <UNK>'s leadership, I think we've transitioned to those larger bids and that will be kind of our normal mode from here on out.
(multiple speakers)
We submitted one of the large bids and two more are in proposal right now.
There are several more coming along behind that, particularly if you use $100 million threshold that you mentioned.
So there's a nice flow of opportunities that we've selected from among many that we're focused on and are really after a quality solution that scores well and at the right price reaching those customers which vary across the board.
And actually, the duration of some of these are longer.
Several of these larger ones are in the four or five-year range.
So clearly, those are attributes that we like too.
Could I rephrase ---+
De-scoping <UNK>, is that what you asked.
(multiple speakers) I don't know that it's a huge shift.
If you go back three or four years, you were seeing 10%, 20%, 25%, 28% reductions on programs, existing programs.
We haven't seen ---+ we've come down that curve but there's always going to be year-over-year savings that your clients demand.
<UNK>, I think the reason I think we were a little bit more conservative on the guidance was because of the integration, right.
We thought that there was a certainly a chance if we didn't get all the bills out the door right away.
You kind of cut over a system on January 1, you've got to get the bills out of the door by the first week and if you don't do that to the same extent you have been, your DSOs going to go up.
So we were little conservative because we felt like the DSO could go to 61, 62, 63 days.
That's probably the difference in what we had anticipated and what happened is our DSO stayed below 60, thanks to the good work of our folks.
That's why it's a little bit better than we anticipated.
That's the biggest reason.
Well, normalized would have been probably where it is today or slightly lower.
But, first quarter wasn't normal because of the integration.
But <UNK>, if you're asking it, I think as we look forward, we think somewhere between 55 to 60 days is where we'll be.
Sure.
The short answer is this was opportunistic.
There was a basket that we have in our credit agreement.
It allowed us to do this for $10 million.
There are other covenants around this basket, which unfortunately we probably won't be for the next year so going forward.
So short answer is we did this once, we really don't have opportunity to do it again.
The remainder of our pay down this year will be on the first lien debt.
We wish we could do more of it.
It was really nice saving the 12%, but unfortunately we won't be able to.
