General Dynamics Corporation's (GD) unit, General Dynamics Information Technology (“GDIT”), has received a 5-year task order, worth $42.2 million, from the Federal Bureau of Investigation (“FBI”). The company has already appointed more than 30 new employees in several locations to support this task order.

Per the agreement, the company will deliver information technology (“IT”) services to FBI’s Computer Analysis Response Team Storage Area Network (“CARTSAN”) segment. General Dynamics will deliver required infrastructure to CARTSAN to obtain, develop and present hidden digital information. In addition, the company will provide maintenance and administrative support to the Computer Analysis Response Team – Forensic Analysis Unit for its Forensic Networks Program and other forensic programs.

This task order was awarded under the FBI Information Technology Supplies and Support Services contract (“FBI IT Triple S”). It is an 8-year multiple-award, indefinite delivery and indefinite quantity (“IDIQ”) contract with total award-value of $30 billion and was first awarded in October 2010.

Earlier, the company obtained three task orders under the IT Triple S program to deliver information assurance and security services, operate and maintain the Enterprise Management System (“EMS”), and support virtual server platforms and thin client configurations in enterprise-wide FBI environments to the FBI.

General Dynamics’ strong expertise to provide cost-effective and innovative IT services, enables it to get contracts from the several federal agencies on a regular basis. At the end of third-quarter 2012, Information Systems and Technology segment’s total backlog was $10.1 billion compared with $9.3 billion in the prior quarter.

Post third-quarter 2012 earnings release, GDIT received numerous orders. In November 2012, GDIT received a 5-year multiple-award IDIQ contract from the Space and Naval Warfare Systems Center (“SSC”) Atlantic to deliver the worldwide Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance and IT support to its European Office and its Combatant Command and Unified Command customers. This agreement had a potential value of $750 million to all five awardees, if all options are applied.

We have identified several key growth drivers like improvement in global jet business market, stability in U.S. military vehicles demand, a backlog of $51.5 billion, an ongoing share repurchase program and strong cash flow generation, which may fuel General Dynamics’ future financial performance.

However, we are skeptical about the company’s over-reliance on the U.S. government orders, and risks related to postponement and cancellation of key projects. General Dynamics currently has a short-term Zacks #3 Rank (Hold rating).

Falls Church, Virginia-based General Dynamics Corporation engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. The company was the third largest U.S. defense contractor in terms of revenue in fiscal 2011, after The Boeing Company (BA) and Lockheed Martin Corporation (LMT).