The $70K contract that started it all

As part of the 50th anniversary celebrations at Leidos, Insights will be taking a closer look over the course of this year at some of the key moments in the company's history. For a deeper dive into our past, we invite you to download and read our new eBook.

There are a handful of strong customer relationships that Leidos has maintained for more than 40 years. These long-term partners have played a significant role in helping the company grow and establish itself. But a track record of performance supporting the armed forces, DOE, FAA, and NASA has to start somewhere. For Leidos, the Defense Atomic Support Agency (DASA) — a predecessor to the Defense Threat Reduction Agency — served as the launching pad.

Leidos founder Dr. J. Robert Beyster was a nuclear physicist. Right around the time Beyster launched SAI in 1969, the U.S. government stopped performing atmospheric testing of nuclear weapons. Coincidentally, the simulation of nuclear outcomes was one of Beyster’s research interests.

Beyster saw an opportunity to try to fill a void, and the government became SAI’s first customer. The company’s first contract was a $70,000 project with DASA, for which SAI researched and analyzed the effects of nuclear weapons. This initial contract shortly led to other nuclear-related projects with the Atomic Energy Commission and the Los Alamos National Laboratory.

Landing the DASA contract and performing the work were important milestones for Beyster’s startup. By the end of the company’s first year, SAI had 20 employees and was in the black. The company earned $243,000 in revenues with a $20,000 profit, which shocked Beyster.

He was so surprised SAI made a profit during its first year that he called one of the company’s board members and told him it must be an accounting error. Beyster found it hard to believe that his fledgling company, which relied on its scientists and engineers to perform sales and marketing roles, turned a profit so quickly.

To Beyster’s relief, the numbers were correct. Yet, nobody associated with the company, not even Beyster, could have predicted the customer-focused contracting behemoth it would become.