Contract Deobligations Alert — January 15, 2026

6 NASA contracts total $1.65B obligations (e.g., L3Harris $568M, KBR $568M), with long horizons to 2050 and $465M+ unexercised options signaling sustained R&D funding.

Multiple IT delivery orders (e.g., SAIC State/Treasury $205M, AT&T DOT/DHS $146M) feature ceilings >4x obligations ($1.7B+ upside), targeting cyber, cloud, telecom modernization.

$1.15B obligations in health (Novitas $877M, Sprezzatura VA $191M), low outlays (1-56%) but extensions to 2029 signal recurring revenue in Medicare/Vet IT.

Low outlays vs obligations (avg 42%, e.g., Novitas $5.5M/877M, ARA $0/403M) across 70% of contracts risk deobligation if ramps stall.

Firm fixed price on 40% of value ($1.8B) exposes to overruns in construction/IT (e.g., Walsh $78M tower, Conduent $110M print).

Subawards average 25% of obligations ($1.1B total, e.g., ARA $231M/403M) dilute direct capture amid contractor dependencies.

Unexercised options >$3B portfolio-wide (e.g., SAIC $1.25B ceiling upside, L3Harris NASA $465M) in 65% of contracts through 2028+.

NASA long-duration R&D (27yr avg for top 3) aligns with Artemis/GEO programs, positioning incumbents for follow-ons.

$2B remaining outlays (e.g., GD IT $112M, Guidehouse $11M) in 2026 expirations offer near-term cash flow visibility.

37% of value ($1.65B) in 6 contracts to 2050, cost-plus structures dominate with 30%+ subawards.

45% of contracts ($2B) in IT/cyber (State, IRS, FAA), ceilings 3-6x obligations amid EIS transitions.

$300M+ in VA/FAA/GSA builds (towers, renos) fully obligated, firm-fixed to 2028.

{"entity"=>"L3Harris Technologies", "reason"=>"$568M NASA obligations (13% of portfolio value), $465M options to 2050 in GEOXO/EP systems.", "trigger"=>"Option exercise >$100M or outlay >50%"}

{"entity"=>"SAIC", "reason"=>"$220M obligations +$1.25B ceilings in State/IRS IT, 0-3% outlays signal ramp.", "trigger"=>"FY26 outlays >$50M or deobligation"}

{"entity"=>"Novitas Solutions", "reason"=>"Largest single $877M HHS MAC, 0.6% outlay post-2019 end risks deobligation.", "trigger"=>"Extension to 2025 or outlay spike"}

{"entity"=>"KBR Wyle Services", "reason"=>"$568M NASA/DOT, multi-mission support with $16M options.", "trigger"=>"Follow-on awards or subaward creep"}