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SAIC Reaches Pact With Greek Government

Science Applications International Corp. officially acknowledged resolving a long-standing billing dispute with the Greek government regarding the security system it developed for the 2004 Olympic Games in Athens.

In a statement released April 4, SAIC said a modification agreed to March 29 resulted in an immediate reduction of 4 million euros, or $5.3 million, resulting in a payment of $339 million.

SAIC said the original contract was for 259 million euros, which is $344.5 million at the current exchange rate of $1.33 for each euro.

The Greek government also agreed to pay 26 million euros, or $34.6 million, within 30 days for previous work already completed, and agreed on future work involving maintenance of the security subsystems during a five-year period.

When the contract was awarded in May 2003, the estimated amount was for $287 million, but changes and increases were made as the security system was put in place.

The dispute regarding the bill caused SAIC to delay its initial public offering from December 2005 until October 2006.

It also caused SAIC to take operating losses in its 2006 fiscal year of $83 million, and $34 million in the prior fiscal year.

“We’re pleased with this resolution and look forward to continuing cooperation with the Greek Ministry of Public Order to complete the program,” said Ken Dahlberg, SAIC chairman and chief executive officer.

SAIC was the lead contractor for the Greek government to design an extensive security system to ensure safety at the Olympic Games. Among other contractors on the team were General Dynamics, Siemens, Honeywell and ITT Industries.

Shares of SAIC, traded on the New York Stock Exchange under the symbol SAI, declined somewhat after news of the negotiated payment first surfaced in late March, but rebounded in the next several days. They closed at $17.63 on April 4, and have ranged from $16.98 to $21.10, the high reached soon after the stock debuted.

, Mike Allen


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