The news follows the company’s announcement in October that it would remove three top executives — Deborah Alderson, president of the company’s defense solutions group; John Lord, her deputy; and Peter Dube, general manager of the enterprise and mission solutions business — and begin an internal review of CityTime, an employment timekeeping system SAIC was under contract to manage.
The U.S. Attorney’s Office for the Southern District of New York has alleged that “a massive and elaborate scheme to defraud the city” corrupted the program, and New York Mayor Michael R. Bloomberg has called on SAIC to reimburse the city for the more than $600 million it has paid for the program over an 11-year period.
The company said at the time it removed the three executives that there was no evidence any of the three were personally involved.
SAIC reported a loss of $89 million (a loss of 27 cents per share) in the three-month period ended Oct. 31, down from a profit of $173 million (46 cents per share) in the same period a year earlier. Quarterly revenue stayed roughly flat at $2.8 million.
A company spokeswoman said in a statement that SAIC “believes that a loss related to the outcome of the CityTime investigations is probable and now estimates that the loss will be at least $232 million” but added that the figure could grow.