All right, good morning, everyone. In an attempt to stay on track here from a time standpoint, we'll go ahead and get started. I'm Joe DeNardi, Senior Vice President of Investor Relations and Treasurer. Welcome to our 2024 Investor Day. We're glad to be with you all. We appreciate your support and the time you give us. We understand it's an investment on your part, and we value that. Let's see. We're going to be making some forward-looking statements today, so please familiarize yourself with this slide, which I'm sure all of you are very familiar with at this point, and take a look at the risk factors section of our 10-K. Our agenda today is maybe going to be a little bit different than what you're used to. I'm going to turn the stage over to Toni momentarily. She'll talk about our strategy.
Lauren will brief you on our approach to innovation and some of the investments in technology that we're making. We're then going to break up into three groups, and we'll circulate in 15-minute increments through the demos to your left. At the end of that, we will ask you guys to grab a box lunch, which I think will be over there. Make your way back to your seats, and Prabu will provide our financial update. And then we'll take Q&A at the end. So with that, I'll turn it over to our CEO, Toni Townes-Whitley.
Thank you.
Thank you. Oh, thank you so much. Appreciate that, Joe. Hey, welcome. Let me take the opportunity to welcome you to our 2024 Investor Day here with SAIC. Look, I've been CEO since October 2nd of last year. When I joined, I asked myself a few questions, but I've also been asking questions of my executive leadership team, all of the employees I've met, and the customers I've had a chance to engage with. Really, those two questions have been why SAIC and why now. It's my attempt and the attempt of this team to lay out for you over the next few minutes the answer to those questions from our perspective, and hopefully you have an answer to those questions in your own thinking about why SAIC is positioned right now to be a fast-growing organization.
I'm going to take just a moment to introduce you to my leadership team. I'm also going to talk a little bit about our 27 growth expectations in terms of our financial outlook. Then I'm going to outline some of the aspects of our enterprise growth strategy that you've heard me comment to or reference in many of the earnings calls. Let me start with our leadership team. Notwithstanding their physical beauty, which is fairly significant, and that of their leader, there's a mosaic in this team, a mosaic of very veteran, experienced, functional leaders that understand SAIC, have been at SAIC, and have been in the market for a significant amount of time. We've got our Chief of Human Relations, Michelle O'Hara, just away for a minute. We've got our General Counsel, Hilary Hageman.
And I know near and dear to your heart, our CFO, Prabu Natarajan, who you'll hear from later today. But we also have some new leaders that have come in from the market in new roles that haven't existed previously at SAIC, roles like our Chief Innovation Officer, Lauren Knausenberger, coming from the Air Force, and Tim Turitto, our EVP for Enterprise Operations. And then we've got we've flighted up four very seasoned P&L leaders that have close proximity to their missions and understand their business. And so I'd like to introduce Vinnie DiFronzo, who runs our Air Force and Combatant Command, Josh Jackson, who runs our Army Group, David Ray, who runs our Space and Intel Group, Barbara Supplee, who runs our Navy operation, and for the first time, announcing our new civilian lead, Srini Attili from McKinsey, who's just joined us. Thank you for being here, Srini.
I flatten the organization as one of the first moves. In this flatter organization, this is the group with their directs, if you will, that are engaging much more closely in the customer mission. They are reviewing our core contracts. They are personally assigned to our top 40 enterprise pursuits across the company, and they are engaging on a daily basis with great uptempo and great intensity. So that's our leadership organization. Let me now take you to a look at our 27 targets. Let me pause here, as you've seen in your deck. Let me just talk quickly to these three, and then I'll talk about our path towards them. 27, we expect organic growth driving to mid-single digit, 5% here reflected. We're going to talk about our path there, but accelerated top-line growth.
We're driving through that growth, EBITDA, EBITDA dollars, growing and driving to free cash flow conversion. That's our growth trajectory for the next three years. Our free cash flow, you know we've had a track record of increasing our free cash flow per share by about $1 a year, and this reflects getting to $12 by 2027. So fundamentally, this ties with an expectation of organic growth, an expectation that that growth is bounded in terms of a margin rate so that we ensure through an enterprise operating model and other metrics that we don't operate we don't go after, as Prabu would say, calories versus vitamins, that we don't grow at the expense of our margin, and fundamentally that that continued growth drives earnings. Okay. The questions I get from this audience most of the time are in these five dimensions.
So how we think about that financial path forward, I've mentioned organic growth. I've talked about leveraging a robust enterprise operating model, leveraging new business development processes to address some of our new business, our pipeline challenges and/or recompete challenges, and making investments in a differentiated portfolio, and all of those to accelerate top-line growth. If anything should tell you structurally we don't have an impediment in growing a mid-single digit, it would be last year's performance. Fiscal year 2024 showed the market, but also showed our team there are no structural impediments to growing that to growing at that level. Look, we're planning to deliver more EBITDA and cash from the business. So when people ask me about balancing revenue growth and margin, the business is going to generate the EBITDA and cash and the growth off that business.
We are laser-focused on addressing delivery execution and business development challenges to, if you will, reshore up our recompete rates back to a 90% win rate. Look, when we talk about capital deployment priorities, we're staying the course. It takes significant discipline to avoid running after large-scale M&A. Trust me, the first 17 meetings in my first two weeks, every banker in town was there. But fundamentally, we've got a strategy that's focused on organic growth, on building the execution capability. You've heard me talk about the fact that good organic growth can be a great shot selection tactic to really understand how to do M&A in the market, and fundamentally to looking at capability tuck-ins, tucking in particularly to harden the enterprise differentiators that we're investing in.
One of those such capability tuck-ins was a capability of platform called Koverse, which you will actually see demonstrated today in the showcase. That's the kind of tuck-in we're talking about going forward. And quite frankly, staying the course on share repurchase. We believe in getting the best return on our investment, and we still believe that's the best return. You'll see Prabu lay that out over the next few years, how we're going to continue down that path. And then finally, as I talked about investment and ROI on our investments, we're really trying to institute an internal ROIC capability, getting a lot more sophisticated about understanding the effect and the return on the investments we make in our portfolio in the innovation factory, and you'll hear more about that from Lauren Knausenberger later in this presentation.
I'm also making investments in business development and upgrading our business development capability. So internal ROIC, external ROIC, obviously in terms of against our peer set, remaining asset light, holding our strategy on capital allocation, and letting our growth drive to our earnings. All of that comes together through probably the busiest slide you've seen with the smallest font you've received in an investor day. We're trying to win, win the award for the eye test. You've got it in front of you, but simply this is our enterprise strategy at a single glance. And I'm going to unpack it for just a moment. Over the last six months, I said I started on October 2nd.
We started a sprint on October 9th, and we've been sprinting for 25 weeks with this leadership team, some outside consultants to help us formulate and articulate a strategy of growing this business in a couple of horizons over the next five to six years. This first horizon, we are focused on this organic growth story, but this is how. This is part of the how. So let me unpack it a little bit left to right for you. There's a reaffirmation in that first column of who we are as a company, of our purpose, our value statements, our vision. We had to make sure as a 55-year company that's gone through a couple of shifts in the market, who are we? In fact, the whole leadership team went to San Diego and met with the founder's daughter, Dr.
Beyster's daughter, and she sat and reminded us of some of the legacy and underpinnings of how this company started. That's one way to just shore up who we are. What you also see in the second column is a very transparent conversation of how we serve our customers. And we looked at our value proposition, and we upgraded that value proposition to really speak to where we want to be in the market, a place in the market that's not fully defined by a category, but absolutely we see demand signals, which is around Mission Integrator.
It's about the ability to quickly, securely, in a mission-critical space, mission-critical operation, bring in and embed technology, integrate emerging technology, whether that be across the technology ecosystem, small business, ventures, large business partnering, what we build, but all our differentiators are meant to drive towards integration in a market that is shifting and that demand signal is increasing. You'll also see how we get there with four pivots. I came into the role talking about four pivots, pivots in our portfolio, our go-to-market, our culture, and our brand. Today, I'm going to focus more on the portfolio and our go-to-market. The next couple of slides, I'm just going to outline a few areas that I think will be super relevant for this audience: our customer focus, our growth vectors.
So think about our customer focus as who we are and how we plan to serve our customers, where we plan to go in the market in terms of our growth vectors, and how we plan to undergird this new strategy with an enterprise operating model and some best-in-class investments in enterprise business development. So I'm going to hit those three areas as we go forward. Our customer focus. How many of you were here at last year's Investor Day? Can I just get a little sense? Okay, the majority. Last year's Investor Day, we said we aspired to be a trusted integrator, and that aspiration remains.
But what we've learned and acknowledged, and it's shown up in the data of some of our recompete losses, is that to be a trusted integrator and a long-term partner to your customer, we've got to introduce more value and innovation through the lifetime of the contract. We've got to also bid more into the market, and we've got to differentiate our portfolio more significantly. So I talked about our new value proposition as around securely and in real-time doing mission integration. But in addition to that, we also recognize that we need to be making commitments to our customer mission.
Right now, if you've been in this industry for a couple of decades, you see the shift of investment moving to the commercial, to the commercial providers, to, if you will, the private sector from the government in terms of knowing what are the new R&D, what are the new capabilities that the government will need. And that has shifted more to our world to be able to identify ahead of the curve where the government is going and where they need to go in terms of capability. And as a result of that, we really have to lift up as an organization. We are very good at meeting contractual requirements of our customers. We do that very, very well. But here's the correlation.
The more we are heads down in contractual requirements, we are missing some of the major trends, the convergence across sector from national security into the civilian space, the embedding of technology and technology insertion, and even where the long-term priorities are happening across the government. That's what we have to change in terms of our customer engagement. So we've identified five national imperatives. These are areas where we are already doing business. We have already gotten demand signal in terms of long-term funding from the government. We have capabilities that serve this market, and we are investing in future capabilities to serve this market. Trust me, when we talk to our customers about imperatives, they start to feel the juice and the passion of what they may have associated with SAIC of old, which is you get it for the long term.
And those are listed here: undersea dominance, border of the future, citizen experience, air all-domain warfighting, and next-generation space. Now, you can look at those as just slideware, but at the end of the day, we're committing to creating solutions, doing thought leadership, addressing the policy issues, making our investments along these lines to further our customer missions. And in fact, if you heard me this morning on Squawk, I hope you didn't hear me on Squawk Box.
That was a very quick interview, but if you heard me on Squawk Box this morning, as well as on Yahoo Finance, I was speaking to some recent wins we had in the space arena, a recent partnership that we had with GomSpace North America, to integrate payloads and integrate payloads, but in an in-orbit processing environment where we were going to launch we will plan to launch next year a capability that really looks like System-on-a-Chip capability. It's a new technology. That's the kind of thing we want to be known for as it relates to next-generation space. These are the kinds of questions we're getting and the new engagement and quite frankly, the energy from our customer set. I mentioned a couple of other areas I'll go on your map, the portfolio pivot.
I get a lot of conversation around what growth vectors, where are you planning to grow? Before I can talk to you about growth vectors, I have to do just a quick primer on taxonomy. It's not where you want to go in an Industry Day, but I am going to go there for a moment because we've renamed what we do. Before you can define what vector you can grow in, you have to be able to inventory what you actually do. We've had a lot of words to describe what we do internally. We've used our own words. We've confused ourselves at times and our customers. So one of the first things we did was say, "Let's use an objective definition of what we do using codes from the federal government." This is the Federal Procurement Data System.
They codify everything they buy from the private sector. There are four sets of offerings that we have that are objectively referenceable, and they are these: mission IT, enterprise IT, engineering services, and professional services. Think of mission IT or the services, IT services, and solutions that we do in direct support of a mission program. Think of enterprise IT or those same services generally in support of a CIO office, a chief information office, or an IT office, some of the more of the back office, some of our cloud migration directly in support of the CIO. Engineering services, you're probably familiar with, are hardware and software, system integration work and production work we do. And professional services are the labor-based work that we do that's not IT. It's not engineering, generally advisory, sometimes SETA, PMO type work that we do. That's what we do. Those are the names.
There's no value judgment on those names. That's exactly what we do and what we get paid for in the government. But you have to understand this taxonomy to understand the growth vectors. So I thought I'd do just a quick primer on the way we're talking about our business. The growth vectors, let me just give you some detail about those on the next slide. Four growth vectors. Civilian, the civilian market. Why the civilian market? As we looked at the data on the market sizing, we found that we had an equivalent, if not larger, addressable market in the civilian space as we had even in the defense and national security space, particularly in the areas that we are differentiated. We went literally agency by agency where we have our footprint.
We also found that that is one of the faster-growing markets, particularly in the agencies where we have footprint, agencies like State Department, the VA, Treasury. The civilian market also renders a much more accretive book of business. The most accretive work that we have within our businesses currently is within our civilian space. So we've said we need to rebalance. And in fact, if you look at a couple of the national imperatives, you can see how we're playing to the civilian market on citizen services and border of the future to rebalance our business towards our civilian market. And quite frankly, look at the convergence that's happening. When I have the opportunity to talk with the Secretary of Defense and others in the Pentagon, we talk about capabilities and challenges we have like counter-UAS, counter-unmanned aerial systems, one of the major challenges facing our warfighter today.
And we are a player in that space, absolutely. But interestingly enough, the same capability that can support a warfighter can support at the border, can identify fentanyl coming over the border, same technology for counter-UAS. And that's the kind of opportunity we're looking for is to leverage what we've done in national security and build up our civilian market. Mission advisory. We have a history of doing a lot of advisory work, but in a non-advisory contract vehicle. We do all kinds of advisory work, sometimes out of our innovation factory, sometimes our SETA business. But what we haven't done is position ourselves as an advisory with an advisory capability.
We're going to launch an advisory capability to drive some of the highest margin work in our business, provide thought leadership, position us with key customers starting in our civilian space because they've got the track record of buying advisory services. I've got a leader for civilian coming out of McKinsey, surprise, you can maybe make the connection, who might know a little bit about advisory capability and how to build an advisory practice. We're going to go after enterprise and mission IT advisory capability starting in civilian as a new entity for the organization. By the way, that market is growing 6%-7%, growing faster than our other markets as well. Then enterprise and mission IT. I've said that we have this as part of our taxonomy. This is what we do, but it's also the fastest-growing part of the market independent of sector.
The highest demand signal and fastest growth is coming in enterprise and mission IT. So you're going to see us bidding with more, if you will, veracity into the civilian markets, creating mission advisory opportunities, and also bidding our work into enterprise and mission IT. So what does that mean for integrated solutions? This is less about our new bids. This is about how do we add value to our current book of business, our current $7.5 billion book of business. And this is about how do we move up a value chain with our customers, embedding more tech, moving from labor-based services to more integrated solutions. The reason we do this, this drives two things: on-contract growth, which is going to be a new metric for us on hardening our growth with on-contract growth off our base business. And this is the risk mitigator for recompetes.
If you don't add value through the life of the contract, you set yourself up for a wonderful contract experience with high customer sat and lose the recompete because they don't see you as the organization to partner with for the future. So those are our growth vectors. I also said I would mention just a little bit in our go-to-market pivot on how do we harden those growth vectors? How do we harden this strategy? How do we underpin it? If you know the history of SAIC, we've had a franchise model to most recently a dual-sector kind of two-tower model. I flattened the organization to five business groups and with an enterprise operating model. No matter how beautiful the strategy is, if we don't have processes, metrics, guardrails, accountability, redesigned incentives, if we don't have the scaffolding, it really doesn't matter what the strategy is.
We will not be able to measure our progress against it. And quite frankly, we won't be able to execute it consistently. In fact, much of what we have in the strategy has existed at SAIC. What we have lacked is systematic deployment of our capability, systematic execution of that strategy, and quite frankly, not having an opt-in, opt-out culture. So I thought I might just share with you in terms of the enterprise operating model. Everybody will love, of course, the five elements of the model. I immediately went to the metrics because I know you're all going to love metrics, and we'll do that. But I just want you to know the operating model is more than just performance metrics. It's a strategic planning process. Well, that sounds not so sexy. Why strategic planning? Because great bid selection is half of our issue.
Selecting where to bid is half of the issue, not just how we win, but where we actually because if you're bidding at the low end of commodity IT, you want to ask why our recompete looks the way it does. Some of that is because we're bidding in the wrong areas of the market. So strategic planning, metrics I'll get to in a moment, really an account structure for the enterprise, standardizing, really defining what execution excellence looks like, and rhythms. Why enterprise rhythms? Rhythms are when we bring the company together left to right, cohorts we're bringing together to learn best practices. Again, this is not sexy stuff. This is the basic. But we have a cohort we just brought together of our 34 account vice presidents. They actually have not been brought together, that they all run the 34 accounts that underpin our entire company.
There's so much learning that happens when we get an enterprise rhythm that we run in a routine way of bringing our people together. And then best-in-class enterprise business development. I'm making some investments, as you've heard, in upgrading the talent in our business development organization, excuse me, upgrading the tools as well and our processes. So I'll speak to some of the process improvements there and some of the metrics. Let me just hit a few metrics. This is the kind of slide that gives your CFO a heart attack, so probably was right now breathing, light breathing, getting some water, hoping that you all don't zone in on two of these and find this as a new conversation or earnings call. However, I wanted to give you a view of how we manage this business now.
On the left, we've been managing at the enterprise level and business group level. That's been a standard scorecard of financial metrics that we have always managed. What we have introduced is a strategy scorecard at the enterprise for myself, the ELT, and quite frankly, in some cases, for the board on a quarterly review to understand how we are measuring the progress against the strategy that's been outlined. You're going to see some, let's say, new metrics there that maybe we haven't spoken about. You'll see metrics like a submit rate right here. How many submits are we doing per year? You want to talk about book to bill and how to quantify our book to bill and get more forward-leaning than backward-looking on book to bill? Then let's look at our submit rates.
Prabu will outline for you how our submit rates have been in decline over the last few years. We are committing to increasing our submit rate to roughly $30 billion in submits by fiscal year 2027, up from $17 billion last year. Submit rates is a way of understanding how we're converting the bid velocity, how we're converting unqualified deals to qualified deals. You'll also see on-contract growth. I mentioned that as a hard target, not just a back-end target. When we miss this or miss that, we can sort of grow off our base, but a stated target for our business. The use of portfolio differentiators. If we're investing in the portfolio, it has to be systematically deployed in every bid and every contract. Right now, we don't measure that in a robust way. That's part of that soft ROIC internally that we're still working through.
Then the percentage of our revenue in mission and enterprise IT. I just said it's a growth vector. If our revenue isn't growing in that space, that's an indication we're not on strategy. You also see one maybe in the cultural area around critical skills. We are investing in upskilling our people. May not be of interest to all here, but I will suggest to you, you cannot grow in this market in the way we're looking to grow without upskilling your talent. And it isn't about just acquiring that talent from the market because everybody wants that talent. It's about incubating that talent, and that's one of the investments that we're making. So this is illustrative of how we're measuring ourselves on a monthly and quarterly basis to actually underpin and harden the strategy we've talked about.
I'll kind of start to wrap up here around everyone's favorite topic, business development. It's everyone's favorite topic because it seems to be the self-inflicted wound we've had for many, many years. If you netted out our recompete, if we were at the correct recompete win rate or one that is closer to what the market standard is, we would have very different discussions as an organization. But in understanding recompete, the focus I get and I get this question pretty much every week, how are you going to fix recompete? I want to start with the multivariate equation, which is a recompete. If there was a single variable, we would have addressed it, folks. Let's just start there. It's multivariate that you run a regression against a few things. One, how are you delivering a contract? Because recompete begins the first day you win a contract.
We have found that in our delivery of contracts, we possibly have not collected all of the information to know where we are with the contract, meaning our customer sat can look really, really good, customer satisfaction scores, award fees, that's the way the government pays you for your very, very high, and still lose a recompete. How does that happen? Why is that correlated? Because what it says is we maybe talk to one customer in government engagement. It's always multiple customers, always multiple customers. So sometimes you can get very comfortable, heads down, engaging directly with the customer you're serving without dealing with the acquisition customer or the end customer or the CIO customer. Those are the folks that sit on the evaluation board for the recompete. So we're expanding and getting more objective in our customer satisfaction.
We don't want the program team being the one to indicate how happy the customer is. We need an independent view of that. Second, we've got to introduce value and innovation along the entire life cycle of the contract. We can't wait till six months before a recompete. We have to systematically deploy that which we built in the company across that contract. That means introducing ways into the new contract vehicle. It also will grow off that base contract as well. So look, we've got to deliberately infuse innovation. We've got to measure ourselves a lot more rigidly than we do right now. And fundamentally, we can drive that recompete through a combination of great program execution, including innovation, measuring true customer sat, and starting to position our BD capability much earlier. We did a look. I did an initial audit to understand what was going on.
And we found out we had a lot of the right processes. We weren't following them consistently. Capture life cycle. You can't talk about recompetes without looking at your overall capture organization, which means your ability to bid out of your pipeline. And on that capture organization, we've got some improvements to make, both in terms of talent, and we're upgrading the talent. We centralized it. We centralized it so we can build a standard capability. The head of that centralized capability is here, Ravi Dankanikote. And there's Ravi around. And we put it as a single belly button to push to say, "Hey, how are we doing this left to right?" We don't get to be customized and opt-in and opt-out. So in building this capability, this is about excellent business development earlier in the cycle, solid capture capability.
You will hear us say, "We don't lose on price generally. We don't. But we have lost on tech innovation." In that regard, that is where the systematic deployment of solution and capability matters most. Best-in-class business development, processes, metrics, some new talent, expanded capabilities, and an enterprise operating model that pulls that together in a very routine, rigorous review of our business. That's the execution that we are planning for, that we are beginning now, and that we expect will render the kind of growth we've talked about I've talked about earlier in this presentation. I'm back to my favorite slide. I know. I love this slide. I have it as a placemat. It will be at Thanksgiving. You can have one as a gift. I'm willing to share.
I'm suggesting to you that this enterprise growth strategy, this is what's burned into my executive leadership team, specifically around how we're going to do this left to right. But let me tell you what underpins all of this. It's that little box, and I'll pop it out here, portfolio differentiators. At the end of the day, this strategy will not be successful if we don't further differentiate our portfolio. And I have been in your seat. I understand how many times you've heard AI, data, cloud. I get it. My hope is that as you listen to Lauren, our Chief Innovation Officer, who really does have sort of an outside-in perspective as a former customer, she'll come in and provide some of that perspective.
But you understand that these four key differentiators that we're highlighting and the system of system integration and on-demand solution delivery that we also believe creates great capability for us, that these have to be in place, have to be substantiated in our model, in our go-to-market. They have to be in every bid, and they are changing the dimension of how we're growing. So this is our secret sauce. And there's no better person to speak to secret sauce, particularly around tech, than our new Chief Innovation Officer. So with that, I'm going to pass the mic to Lauren and have her come up. Thank you very much. Enjoy yourselves in the showcase.
All right. Thank you, Toni. And thanks, everyone, for the welcome today here at NASDAQ. I am Lauren Knausenberger. I am the chief innovation officer. It actually started on October 2nd, the same day as Toni. I've been in the role a little over five months now. And as Toni mentioned, I was most recently SAIC's customer. For the past seven years, I had the honor of serving as the chief information officer and the chief transformation officer for the Department of the Air Force. 750,000 airmen and guardians, global, enterprise, solving a lot of technology problems, got to be involved in some really exciting missions around the world, occasionally got to play with some very fun airplanes. We were talking about some of those over dinner last night.
So when I left the Air Force in June, I had a pretty high bar for what I wanted to do next. And there were a lot of things that I could have done that could have taken me away from the mission, away from the tech, away from just really the impact that I have to feel in my work. And so I feel just really blessed to be here at SAIC with this incredible team. I do want to share with you a little bit. We'll share some fun pictures with you here for a minute. But I do want to share with you just some impressions since coming in the door at SAIC. Some of those really pleasant surprises, like the level of differentiation that we have in our solutions.
And I'll give you some nuance on the next slide of where I truly believe we are the best in the business in certain areas and in how we bring those together. I was also blown away by the tech talent, the depth of the technology with the level of mission intimacy that we see in so many parts of this company. It really is impressive. A lot of folks that really deeply understand the tech, they don't deeply understand the mission. And so when we go in and solve a problem for a customer, we bring those things together. You're going to meet three of our incredible tech experts who also really get the mission later. You'll have some demos with them. I'll tell you more about that.
Now, I guess on the side of things that I noticed coming in the door that maybe I immediately thought, "Hey, we could do better on that." So I told you, great capabilities, great people. I also saw, like a lot of organizations, that not everyone across the organization knew about those incredible enterprise capabilities consistently. We didn't know how to sell those enterprise capabilities consistently. I saw some actually pretty solid processes across the company that were very inconsistently followed. And I saw also inconsistency in accountability. Now, the good news on all of those things is that this ELT has come together. And I think that we see ourselves very clearly. I think that we know exactly where we were October 2nd. I think we saw the same baseline.
Our strategy gets after the market focus to grow, but it also allows us to get after those things that will help us to unlock value that can really stop companies from making that progress when they institute a new strategy. I have a lot of confidence that we'll be able to get that strategy also because of this leadership team and the way that they do cultural modeling. Cultural modeling is something that I've seen throughout my career as one of the most important measures of how a strategy will be rolled out. Specifically, you have a leadership team that walks the walk, that consistently reinforces their strategy.
When you're trying to drive transformation or cultural change, and you see someone doing something awesome, like when we had some folks in our Navy group, they were able to sell something at 2% higher margin, absolutely wonderful, great sale. They were able to add more value. Someone else got credit for that sale. It seems against incentives. We rewarded that person because they were being an enterprise player. They were worried less about, "Am I going to meet my numbers? Then am I going to add value to my company and to my customer?" We immediately want to say, "We celebrate that." Likewise, if you see someone going back to not following a process, not having that enterprise mindset, we've been very, very consistent in showing that. And it absolutely starts at the top. So I'm going to embarrass our CEO for a minute.
You might want to cover yours for a minute, Toni. I'm going to tell a story. So one of our senior leaders, 200-hour combat hours in the A-10 and the F-15 Eagle. And we got out of one of our Wednesday strategy sessions. We're having a very brief moment, very brief break to just refill some coffee cups. And he says to me, "Throughout my military career, I've seen a lot of leaders, gone through all the training, been in combat with great leaders. I've also seen some really terrible leaders. And I feel like I've learned from all of them. I feel like I've kind of got this leadership thing down now." And then he paused for a minute, and he said, "Toni breaks the mold." And she really does. I think we all see that. We all follow her. She is an incredibly engaged and active leader.
She wants to know the business. And whether she's talking to us or she's talking to our 24,000 people, she is engaged. Our employees believe her. They absolutely want to follow the strategy, but they want to know where they can help. And so I feel very good about us being aligned and being able to put this into place. All right. So the innovation organization. So Toni mentioned earlier that we are investing more in innovation this year. And because we are investing more in innovation this year, I want to tell you a little bit about the team and what we do. And I guess follow me a little bit from right to left here. On the right-hand side, we have strategy. We have our chief technology office. And then we also have product partnerships and ventures.
So those are the folks that are aligning us to corporate strategy. We're developing technology roadmaps. We're watching out over the horizon. We're making sure that we're ahead of tech trends, that we understand where our customer's going, and that generally, we are envisioning and planning for the right capabilities to drive the growth that we want to grow for this company. In the middle, our innovation factory. Those are the folks that are actually delivering the digital and the engineering capabilities that we bring to market. And then on the left-hand side, those are the delivery folks. We sell them by the sprint. We send them in to solve problems for our customers. They are also part of how we integrate services with our digital and engineering solutions and bring value to our customers. They help us add stickiness in those areas.
And then the next set is a little bit about what we do, again, from right to left, tech advisory. So you can see Jay Meil over here. He's got the beard and the glasses. That's only one reason why we call him the wizard. That's his call sign. When we put Jay in front of a customer to talk about data and AI, he walks in the room. A customer may know their problem. They may articulate the problem. They may not know what their problem is yet. But folks like Jay will spend an hour with the customer, and they will come out of the room. The customer fully understands their problem space. They feel confident that they can solve the problem. They feel confident that we are the folks that can help them get there.
And it may be that we go into a consulting engagement from there, or maybe we're going to develop a product, or maybe there's an RFP. But that is a key part of our work coming out of the innovation organization. Let's say that that customer now wants to release an RFP. The team will also send the subject matter experts to make sure that we can write that capability into the deal in a way that is going to resonate with the customer. They're going to know that we're going to help them to get the value that they need out of deploying that capability. And then the product and solution development, that's the factory that I mentioned before, the folks that develop the capabilities and delivery success as well. You're probably wondering, with investment, how are we dividing that investment? It is about 67% for digital.
So think cloud, cyber, AI, data, those types of investments. About 33% of that investment goes toward digital engineering capabilities. All right. Toni mentioned earlier, "Hey, you've seen these words before. Why do we think we're the best at some of these things?" Well, there are a few reasons. I'll start with kind of the methodology on this. We started out just asking a broad group of experts from across the organization, folks that know the business, including the business leaders in this room, our finance folks, our technology folks, our sales folks. We brought them together. We started with the whiteboard. My first instinct, remember, I was just a customer. I actually didn't know back in June that SAIC did all of these things. I knew about the cloud side. I knew very little about the rest.
And there might have been an acronym that came out. They kind of called BS on a few things. Like, "Really? We think we're the best? What's our proof on this?" And actually, through a process, we worked with a consultant. We really dove into the details of how we served customers. We looked at quotes from customers. And we also looked at third-party validation, folks like Gartner, IDC, Frost & Sullivan, to get into, "What is the nuance? Where are we truly the best?" So let me tell you first where I believe that we are truly the best at SAIC on secure multicloud. So I'll give you the first stipulation. We are not the best in cloud. Google, Amazon, Microsoft, those guys are cloud providers. We are not. We work with all of them. They are complementary. We go to market with them.
What we are the best at is deploying cloud environments with enterprise services that allow our customers to immediately get the full value of their cloud. That comes through in our past performance. We're on all of the large cloud vehicles pretty much across the Department of Defense, the largest ones, Cloud One, CBC2, BMC3. Those are huge cloud contracts. They are the vast majority of the compute within the DoD as well as the vast majority of the enterprise services. They do really hard things. Part of this is deploying business applications. Part of this is doing command and control at multiple levels of classification, not just unclassified, secret, top secret. Some of the policy challenges that happen with that are very complex. This company, unlike any other company, is able to move code across levels of classification and do it instantaneously.
They figured out the policy environment to get things accredited in an automated manner. They have figured out how to do that with partners, which is a key part of the national defense strategy. Being able to share data with allies and partners at the secret level is really hard. We have deployed the only secret releasable cloud in the world to be able to share with our partners. It's a pretty big deal how we've brought together the tech, the mission, the policy, and the seamless execution for those deals. I'll just give you another piece on why this is so hard. Another service, while I was in my last job, also tried to deploy their cloud.
As Cloud One was growing like gangbusters, adding enterprise services, bringing in data services, expanding to secret and top secret, bringing in more complex missions and challenges, that cloud was shut down based on cybersecurity risk and actual threats that had happened. It has not stood back up. There is a reason that other parts of the department are leveraging Cloud One. Then when we wanted to transition that capability to Treasury, we also won T-Cloud. We were able to bring everything that we learned from the DoD customer, all of the security features, all of the speed, all of the really, really complex use cases. We are able to robust our ability in FinOps thanks to a venture investment in Morpheus. We were able to go to market together for Treasury. We're doing great work for Treasury today.
So that ports across to the civilian market. I want to chat a little bit about data and AI. I'm going to talk about them a little bit together because data, of course, is the fuel for AI. A few years ago, we acquired a company called Koverse, really incredible data capability. It kind of had immediate credibility with me because the founders came out of the NSA, which has the most complex threat service, the most complex data environment of anywhere that I have seen, and the biggest stakes. I mean, they have nation-states spending billions of dollars trying to hack them every single day. It is pretty complex. You have folks that are trying to steal intelligence secrets. You have folks that are trying to steal weapon system designs. It is the data that we most want to protect. So these engineers, they came out.
They developed this solution to just hypersegment data and to be able to ensure the finest grain. So imagine that all of the other competitors, you have some spreadsheets and maybe a common repository in your organization. I'm going to make a database analogy with Excel because we're in a finance room. But imagine that you have a folder full of things. You don't want to maybe share your model with your buddies. You're pretty proud of your model. Most of our competitors, they will control the security at the sheet. So you can either see the whole sheet or you can't see the whole sheet. And for a lot of businesses, that's probably fine. We can go in with our capability with Koverse, and we can restrict it by the cell.
So you can decide that you want to share some of your stuff with your buddies or with everybody. But maybe you want to protect those 10 cells. Or maybe you want to go to a very fine grain on that particular formula that you don't want people to see. We had a hyperscaler recently do an AOA. And they came back and said, "This is the capability that gets to the finest grain. Nobody is doing activity-based access control at the cell level." That's that Excel analogy. But it is also called a data cell in a database. And we would need at least three capabilities to approach your capability with this one offering. And so that hyperscaler wants to bring us into their product, given the amount of money being spent on Zero Trust across the entire federal government right now.
That being such an important part of Zero Trust sets us up really well as we continue to scale into this world. So you have very fine-grained data. Now it's time to do something with that data. We want to operationalize AI. There are a lot of AI platforms out there. We have a pretty fantastic offering that we did not build ourselves. We have white-labeled and integrated some of the best open-source technology, brought it together, containerized it, brought it into a secure area where our customers first can solve big problems, usually leveraging our tech experts that you heard me talk about earlier and the mission intimacy that they bring. Biggest problem in the Department of Defense and civilian sector, it's not the technology. There is no shortage of AI platforms.
It's being able to deploy those platforms securely to segment the data and to solve actual problems. There's almost a little bit of fatigue on people seeing AI platforms without folks coming and actually solving a problem. But once we solve the first problem, our technology is so easy to use. It leverages low-code, no-code, as well as prompts where we just rolled out a release where you can literally just say in plain English, "I want to have an LLM that does X." And we can deploy that. So when one of the more recent world conflicts kind of came into the news, we had a customer literally send a message on a Signal chat, "Does anybody have an LLM that we can air-gap? And we need it fast. We have all of these meetings. We can't keep up with all of the chatter that is happening.
“Can you help us?” And within 48 hours of getting approval to launch, we had that LLM deployed, air-gapped, and solving their mission. So the speed that we can deploy is also a major differentiator. And we have not seen that from our competitors. And then finally, on the digital engineering side, this is kind of the number one thing that if you go to a trade show, you just cannot tell the difference. Everybody's solution looks the same. So we actually showed up. The Navy, they saw the same thing. Said, “We can't tell the difference between all the digital engineering solutions. We just need you guys to show up. We're going to have a bake-off.” So we showed up at the bake-off. So did all of our competitors. Guess who won? I wouldn't be telling you the story if we didn't completely smoke the competition. So we won.
We won easily. At the digital engineering conference around the same time, we won the award for most innovative solution. It is called ReadyOne. Our digital engineering solution is called ReadyOne because it is ready on day one. We've already built all the connectors. We've already built the digital thread. It's not just digital tools where, "Hey, I'm a mechanical engineer. I can open a digital tool. And I can do my stuff over here. And you do your thing over here." That's kind of like do you remember a couple of years ago when people thought they were digital because they went from a paper form to a PDF? That's what a lot of digital engineering programs are doing. We are completing a completely continuous level of work.
So if a thermal engineer is doing something over here, it updates the model across the digital thread. The mechanical engineer over here, they can see that update. They can constantly see how their work comes together. And we can share that on an ongoing basis with our customers. We were incredibly fast at bringing in any data model, any data set, any tool. Most tools that people actually want to use, we've already built the connector. So we can literally just stand it up and go. And that's to solve any number of problems. So we recently had a situation. This was actually a counter-UAS example where we had a customer, and I guess I'm kind of crossing over into systems of systems integration here. But this is a key part of our secret sauce there.
So our customer wanted to grab a really, really old, really, really gnarly data set, of which the DoD has many. And they picked some folks actually before they asked us to integrate the data set. One of them is a very incredible, innovative, venture-backed, decent-sized defense startup. One of them is an established OEM, also pretty good reputation for innovation. Government was pretty impressed with them when they were able to solve this problem in three weeks. And actually, as a former customer myself dealing in DoD, I'd say, "Oh, three weeks? That was pretty solid." And the guys are kind of smiling. And I'm like, "OK, all right. What have they not told me yet?
Hey, guys, how long did it take us?" "Yeah, it took us a day and a half." It's like, "OK, why did it take us a day and a half when this incredible team took three weeks?" Well, because we actually practice the open architectures and the standards that we talk about. We don't hold data in a proprietary way. We don't close things off. We leverage the standards. And we do them every single time. You use our repeatable process. We use our tooling. So it's very simple.
But it is also very unique because a lot of the players in the industry, all of the things that they do to keep things proprietary, it ends up hurting them when it comes time to do things at speed and to do them well and to mitigate risk and to ensure mission success at a very, very high level of precision, which is what our customers need. So systems of systems integration, this is a capstone for us. This is how we come to business. We bring all of these things together. And we do it really well. In fact, I would say if you gave us a really, really easy problem, just a really easy problem, and you put us in a room of competitors, we'd probably all solve the problem. You probably couldn't tell that much of a difference with a really, really easy problem.
The more complex the problem, the more we are going to stand out because we do use all of this tech together consistently. We understand the mission. We can solve the problem. We can bring together everything that we need consistently to integrate both hardware and software. And that is where a lot of companies really struggle. When you bring in the hardware and the software at the same time, a lot of folks can't handle it anymore, especially the cybersecurity risk that kind of goes across those two things. And then finally, on-demand solution delivery. So this was something I was really impressed with when I came in. It is not that we were doing DevSecOps. That is everybody's development methodology. Not really that impressive at this point. Everybody is doing it pretty consistently. They can write some code. Everybody can write some code.
We have 42 teams that we can sell commercially that if you have a problem tomorrow, we can send you a team. Our customers, they constantly when they hear about this because we've just actually started to market it a little bit more and got it up on the Amazon Marketplace as well so that folks can purchase our commercial sprints there, our customers go, "Wait a second. You mean I don't have to wait a year and do a huge IDIQ so that I can buy software development?" No, you can buy our teams the same way that you buy software. You can just go to the Marketplace or to the GSA vehicle. You can just buy a sprint. You don't like what we deliver, you don't have to get a new sprint.
But if you do like it, and if we solve this first problem, then why don't we solve the next problem for you? And why don't we keep solving problems for you using this model? And so this is one of the key things that we want to really get out there this year and really double down. And it's also a key area of investment because the more we hire folks into those teams, the more we bring those teams online, the more demand there are for those teams. We keep them pretty well billable. And then you've known this company for a long time, some of you. I want to just reiterate that bottom line has not changed at all. You can be really, really technically sharp in this industry.
If your customer doesn't trust you, if you don't have the past performance that you can talk about, if you haven't done it for them, and you're not able to convey the mission intimacy for them, you're not going to win. So this company brings together those technical differentiators. But it brings together all of those solid things that you have come to know of this company over the past many decades. All right. So I talked a lot about capabilities and differentiators and tech. These are the other places where a lot of organizations can mess up after deploying the tech. And because of that, these are the places that I am focused, that we are working on driving value this year to unlock value.
I don't want us to be a company that develops amazing tech and doesn't get every single bit of mission outcome and revenue out of the capabilities that we develop. So first, I talked a little bit about how we develop the tech, that enterprise tech acumen. I've already seen such a huge improvement since October. Toni mentioned getting the account executives together, having them in one room for the first time. We gave them a pretty good just lesson on exactly what we have capability-wise across the company. They were excited. Some of our account executives and our business group, after my team went into greater detail, they were like, "Oh my goodness." Our executives were like kids in a candy store.
They didn't know that we had all these things that we could sell so easily. Folks actually were pretty willing to sign up for targets: "Hey, I want to go sell this to my customer because I think this can add immediate value this year." That's a key part of how we're going after on-contract growth. A key part of that, too, is for the first time, we have CTOs and also innovation sales folks that are embedded in the business groups. The business group leaders are all sitting over here. We are completely integrated together, making sure that we develop capabilities that they need to go to market, solve their customer problems. They were getting that feedback loop. We also have that constant level of understanding across the business of what we can go and sell together now. That's been a key area.
Investment efficiency. I'm going to share some metrics with you, I think, on the next slide. But I want to make sure that every dollar that we spend on technology that is going toward something that's going to add value for the customer and add value to the company. And if there's something that we can be doing better in our operation to drive more value, if we can get more value out of the same spend, then absolutely, I want to do that. The innovation ecosystem. We're a pretty big company. It feels small, actually, after the Department of the Air Force to me. But it is a pretty big company, 24,000 people. You have folks that are on customer site. They have incredible, incredible knowledge, both technical and mission intimacy. We don't want that knowledge to stay only on customer site.
We want to make sure that that knowledge and that tech and that mission intimacy are coming back into the factory where we're delivering capabilities, that those really smart people can feel a kinship, that they can learn from each other, that they can mentor each other, and also that they understand exactly what the company brings behind them. Because you can get kind of can go native with your customer a little bit. You can kind of forget that there's a company behind you. One thing that I've heard Toni say a couple of times that really resonates is that one of us can never be smarter than all of us. That is something that resonates with people. Everyone wants to bring their best to their customer. Historically, people didn't want to necessarily bring a new capability.
They were almost afraid to bring a new capability to their customer. But the way that she has framed it around, you are not solving all of your customers' problems if you're not bringing all the capabilities of the company, it resonates with people that are very mission-focused. And then finally, external branding. So we do have a new Chief Marketing Officer. She is fantastic. And we are working through brand. My key goal here is, I mentioned in the first five minutes, that I was pleasantly surprised by the incredible capabilities and differentiation at this company. I don't want people to be surprised. I don't want our customers to not know that we are the best in the business at any of the things that I know we're best in the business. And so that is something that we want to get better at communicating.
I want us to get credit in the market for the places that we are really good. All right. So I mentioned earlier we're increasing our level of investment. I also want to make sure that we are managing that investment with rigor. I want our CFO to know that when he is making an investment in the factory, that it's a good investment. I want to be able to put a number against how well that investment is going. So some of these are the ways that we measure. I'll start with discrete revenue. That's an easy one. Just like the I is a little bit of an easy one. We know how much we spend on and how much we invest. The R, we don't sell directly usually. So how do we measure the R in the ROIC?
So for the discrete revenue, we do have products that we track the revenue on how much we sell of a product. We do have the sprint teams. We look at how much we sell of the sprint teams. So products and services coming out of the factory, how much are we selling commercially? We track those things. But even more important, probably, is the affiliated revenue. Did we put $1 million of a data science platform into a bid? And did we win the bid based on that being a discriminator for a billion-dollar bid? Were we able to significantly add value and mitigate risk, even if it's a smaller amount of discrete revenue, toward a broader affiliated play? So we measure both of those. We also, this year, are going to be measuring on-contract growth.
We have our innovation sales leaders with specific targets and specific folks that they're working with to go out and make sure that not only are we growing on contracts, but that we're focused on selling these capabilities that are going to solve customer problems right now, and that we can also kind of sell within the year. Because there are a lot of things, like those DevSecOps sprints, we have so many customers that want someone to come and do a small thing. And that's a great way to let them test and mitigate their own risk and see what we can do as a company. So we want to be able to do that for more of those relationships. And then on adoption, Toni mentioned earlier, we've lost a few bids in the past on the tech scores. I don't want that to happen anymore.
And so we are holding ourselves accountable on those tech scores. It's really mutually accountable. We need to make sure that people know the capabilities that we have as a company. We need everybody to be able to write about it. We want to be there in the proposal room. We are often there in the proposal room, helping to make sure that we have brought value to the proposal, that we've thought innovatively about the solution for the customer. And that's for new bids as well as for current bids. We want to make sure that we have a high percentage of things that include those differentiated offerings from the factory. And in some cases, we want to know that we are using them internally. So our digital engineering platform, sometimes we deploy that for customers.
But a lot of times, it is how we do incredible engineering work for our customers. How do we significantly mitigate risk, especially on an FFP deal? How do we get more value out of an FFP deal when we're doing digital engineering? It's because we have an incredible capability. And we can deliver a better outcome for our customers based on using that capability. All right. Finally, we're going to have a little show and tell over here. Do you want to ask everyone to look at the back of your badge? Sorry, you don't win a car today. I know that's a disappointment. But it will tell you which demo station you get to go to first. We have three of our experts from the factory. They're going to walk you through three technologies and a couple of different use cases.
For the data science suite, you're going to get to see a little bit of a teaser on how we use AI for all-source intelligence. So how do you bring data from many, many different sources that don't always come together and basically take some of the work off the analyst to figure out what is really important? I think a lot of folks after 9/11 really became familiar with this term because we had data in different places that would have helped us to prevent those attacks. We didn't bring them together fast enough through sharing. This solution brings together information from all sorts of different fragmented sources and helps an analyst do the job of many to solve problems and to stop things from happening. He's going to share a use case from the Marine Corps.
With CloudScend, you're going to get a little bit of a little bit of an air defense use case. How do we make sure that airplane, that balloon, that hopefully not missile, that might be headed toward our airspace, how do we detect it quickly? How do we know what's going on? How do we get the data to the right people? And how do we leverage our data AI and cloud suite to do that? And then with ReadyOne, you're going to get to see a little bit about how we leverage digital twins for NASA's proposed lunar lab. One of the cool things on the digital engineering side is you can bring in physics models. So you can test your engineering design not just on Earth, but also on the moon just by changing out your physics model.
So I hope that you have fun with our demos over here. These guys are very passionate about what they do. And they will absolutely answer any questions that you have and go as deep as you want to. Thank you all so much for listening to us today.
Good afternoon, folks. We're starting a couple of minutes early here for the session. I could probably use an extra couple of minutes, so I'm going to steal two minutes here. Let's wait for a couple of folks to come in. Are you getting the feedback? All right. Well, let's get started. Phenomenal to see all of you here again. I did not think personally that we'd be here a year later doing another Investor Day, but really, really excited to see you all again.
As Joe said upfront, we sincerely appreciate your interest in SAIC, the investment of time, and your resources, and we want to be worth your while. I think it sort of starts there. What you heard from Toni this morning is a team that's come together in a mere six months, formulated a strategy, and is committing to execution of a strategy for the next three years. That's not easy to do in a $7.5 billion-$8 billion company. What you then heard from Lauren was, "Here are the bets we're making on the technology front. Here's where we're investing.
Here's the capability we are expecting to deliver over the next three to five to 10 years." What you also heard from Toni was, "We have to think about business development and capture in a really holistic way," by which we mean we've got to make sure that the habits and the hygiene exist inside of the business around account management, account strategic planning, around execution, around innovation, and ultimately returns that we are delivering on a consistent basis. It is really important for you all to remember that none of this is possible. Business development and capture are getting centralized. Innovation factories run out of as a matrix organization.
None of this is possible unless we have a P&L set of leaders that are really stepping up and ensuring that we are connecting the dots between all the things that the enterprise is doing, committing to, and will execute to, with real mission delivery for customers that are sitting clearly. The raison d'être for the reorganization was to flatten the organization so we can get to our customers a little bit faster. There's a genuine sense of excitement in the customer community about the level of engagement that they're seeing from SAIC.
So I really want to preface everything I'm going to say on the financial front with, "This comes down to a solid strategy committed to execution and really holding ourselves accountable to a return criteria." Now, I often get asked the question, you know, "Let's talk about the SAIC investment case." And I sort of boil this down to some really simple principles, which is absolutely consistent execution, communicate incredibly transparently with investors. That means level setting consistently. That means calibrating the information asymmetry that I think exists between the internal constituents and the external market, which is how do we constantly build a narrative back to a place where you all know where we're driving to? Consistent organic growth. We are going to deliver 3.5% organic growth from FY 2022 to FY 2027. Consistent organic growth supported by good capital deployment. Obviously, we're going to improve margins.
As Toni very clearly said, we are committed to delivering more EBITDA and more cash out of this business. But that is where the investment case for us lies. Consistent delivery of top-line growth, good EBITDA production, obviously improving margins over time. And we're actually signaling that given the investments we're making inside of the business, given the things you heard from Lauren and from Toni, our long-term vision, call this an aspiration, is to get this portfolio to about 10% on an adjusted EBITDA margin rate basis. But the reality is we are absolutely committed to delivering more EBITDA out of the business. We have always been good generators of free cash flow. How do we compound free cash flow growth here on an annual basis? As we've shared publicly, we've delivered 10% improvement to free cash flow per share.
And what you are seeing us committing to right now is that that trend is expected to continue over the next three years, such that we can, on top of compounding earnings 4%-5%, buying 4%-5% of our outstanding stock every year, we are truly generating about a 10% growth in free cash flow. Now, capital deployment, you know, I'll say that it's taken an incredible level of discipline and consensus on the team to say, "Let's not think about scale M&A. Let's think about differentiation." You heard from Lauren and from Toni about Koverse, about Morpheus, about our venture investments. And the reality is there is a map here that we've been following internally to say, "How do we smartly allocate capital to the greatest return?" And I think our commitment to capital deployment has not changed.
Part of as many things that are changing potentially with the strategy and the execution and the go-to-market and the pivots Toni talked about, what will not change from SAIC is the commitment to being transparent and commitment to doing the best we can so that we can execute on a quarter-in-quarter-out basis. That will not change for the next three years. So multi-year financial targets. And you heard a little bit of this from Toni, and I'm not going to spend a lot of time on the detailed charts because I know you all have fantastic models out there, other than to say, "This is the first time we're talking about FY 2027. We had committed to 2%-3% growth in FY 2025. No change there.
That reflects the headwinds we have from our recompete losses." The reality is, as we say this internally to our teams all the time, the job this year is going to be moving revenue right to left on a quarter-in-quarter-out basis because you have to execute like your life depended on it. So 2%-3% is our current mark for FY 2025. 2%-4% is very consistent with the long-term targets we set for revenue growth last year at Investor Day. And obviously, the investments we're making inside of the company, in the factory, in business development and capture, the efficiency initiatives that are underway to ensure that we are optimizing our facility footprint, our IT footprint, our operating footprint, all of that is freeing capacity for investment inside the business such that we are actually committing to higher revenue growth rates.
4%-6% is what we've got for FY 2027 and at the midpoint, about 5%. Toni said this exactly right. We delivered 7% growth last year, folks, 7.5% to be precise. We are demonstrating that structurally, this portfolio is capable of delivering mid-single-year growth rates, but we have to get some things working in a way that allows us to be consistently generating sustainable organic revenue growth. To me, that is really, really important. No suspense here on EBITDA margin. There were some questions coming out of earnings call. Is this sort of, you know, where we're starting to see some pressure on margin rates? The reality is, I think Toni said it absolutely right. You know, we expect guardrails. We are not chasing calories. We're chasing good growth.
And that means we've got to stay calibrated and messaged around what the margin rate impacts are of things we're bidding. Look, if we are in the enviable position of growing consistently this business at 5%, 7%, 10%, the reality is if there's pressure on margin as a result of delivering that kind of outsized growth in EBITDA, that's okay. That's a bet we will make. But we are not going to keep investing in the business without committing to a return. And this is what you see this team doing, which is we're holding ourselves accountable to what we expect to see as good returns coming out of the business. I'm going to flip a chart here because this, to me, is how I think about transparency and, you know, making your commitment. There are two columns for every year.
The left side is what we told you all a year ago for FY 2024, 2025, and 2026. To the right of it is the actual delivery relative to the targets we provided a year ago. As you can see, with the number of green dots there, nearly every key metric we are tracking ahead of what we told you a year ago. I think what you're starting to see is that curve starting to navigate up a little to say, "We are expecting this business to produce higher levels of growth and EBITDA dollars and cash on a consistent basis." Now, $765 million of EBITDA is the FY 2027 number. It's at the midpoint of the guide range that you have. Our incentive comps are designed to generate additional EBITDA and cash from the business. That's the midpoint number that we're tracking to.
Sometimes I talk about this internally as if we can grow EBITDA by $100 million-$150 million over the next three years, we get traded at 12-13 x EBITDA. There is a lot of equity value we can create from the business if we are committed to an EBITDA dollar number that translates at our multiple to some real value for our shareholders. What is really important on free cash flow is we're committing to $540 million-$560 million of free cash flow, translating to $12 of free cash flow per share. I'm a simple guy, and I do math that is simple. We were at $8. We hit $8. We said $9. We hit $9. We're now saying we're going to get to $10 this year, $11 next year, and $12 the year after. Oh, by the way, that assumes 174 stays in place.
So we're not assuming any tailwind from 174. And we are assuming that our cash taxes, as we've previously communicated, will go up probably between $50 million and $100 million over the next three years. So that is the capacity of this business to generate cash. We were laser-focused years ago on working capital, but there's an art to the way we're managing working capital at the individual belly button program manager level that we are truly focused on generating improved net working capital out of the business. We held net working capital flat to slightly down last year after growing the business 7.5%.
This is the value of growing the business as an asset-light delivery model that allows you to have a minimal amount of CapEx, no more than you need, and focused on really executing to EBITDA conversion of cash and basically getting to $12 of free cash flow per share. What we are right now assuming is leverage stays at about 3.0. Our natural organic EBITDA growth is going to allow us to generate enough EBITDA to push leverage down. The assumption we're making here right now in this model is that we are going to hold leverage at about three turns, and we are likely to have incremental capacity for investment in the business. Hard to have a conversation with investors. For me, it seems like without a compensation chart. I'm only going to highlight three things we changed this year.
This is FY 2025, so you'll see it officially in the proxy next year. There are three circles here, relative TSR. We've gone from our vice presidents in the company not having performance-based shares three years ago to a company that has now made relative TSR a distinct metric for every single vice president in the company. Skin in the game. That's the principle. And it's graduated changes every year so that people are embracing the message around the power of committing to a set of goals and where your interests are aligned with the interests of your shareholders. So relative TSR is a standalone metric. Our performance shares are now at 60% for the executive leadership team, 50% for the senior vice presidents in the company, and 40% for the rank and file, if you will, VPs. And that was also sitting at zero three years ago.
So we are consistently moving the bar where last year's performance this year will not get you last year's score. It will truly generate less of a return from a relative basis. And to me, I think the team has really, you know, absorbed and embraced the message that we are in the business of producing value for our shareholders and our customers, and we have to get the whole package working together. And then the last thing we changed was multipliers. You know, there was a leadership multiplier of a 0.8-1.2. Guess what we did this year? We said for the executive leadership team, we are going to create more downside risk.
That means if we don't, if I don't do the things that are setting up this business for success in the future, Toni and the board now get to say, "I get 50% of my target pay," regardless of the actual financial performance of the year in the way we're doing leadership multipliers. No improvement to the upside. 1.2 was capped as a multiplier upside last year, and we're holding the upside at 1.2. It's really creating a little more downside risk for the executive leadership team. So I really think it's important to talk about creating skin in the game and making sure that we are delivering what we have to deliver. Toni talked about organic growth rates improvement, and I'm not going to talk about it. I am going to talk about the value of the submissions.
Toni said an improved path to multi-year submissions, $17 billion growing to $30 billion. I want to be crystal clear about this. We're not talking about increasing what I'm going to call the velocity of spraying and praying, which means you spray the dollars out and hope you win your share of these programs. It really is about targeting a pipeline that you're attempting to get to and then ensuring that there is a high level of conversion between investment in the pipeline and the actual bids you're delivering. We are actually committing. There was a lot of questions internally around, "Do we put a number out there?" I go, "Look, this is a really forward-looking metric. It's three years out. We need folks outside the company to understand it's not just vaporware to talk about higher growth rates.
Here are the actual targets we're committing to such that we can deliver what we have to deliver." You all can do your math on blended win rates between recompete and new. The reality is our competitive win rates on recompetes have been less than 80%. I know some of you all heard this in the one-on-one meetings you've had with the team, so I just want to put it out there. Less than 80%. Restoring recompete win rates back to the 90% mark, along with improving our submission volume, we expect will generate real returns. Growth-focused EBITDA. I'm not going to belabor the chart other than to say, if you all were concerned after the earnings call that somehow we're going to keep diluting margin rate, this should reassure you that we see a real path to 9.5% EBITDA margin rates by FY 2027.
The reality is, aspirationally, we're really targeting about a 10% rate. That's going to take some time with the investments we're making in the factory, the software sprint teams, the marketplace, you know, agile teams that we're selling. There's some real capability that if we can figure out how to get this to market in a consistent way across the portfolio, we are going to improve the margin rate profile of this business. Just think about it this way, folks. $7 million of profit gets us 10 basis points of margin. If we did making this up entirely, $20 million of software sprints that's not baked in the base plan, that's incrementally, potentially $15 million or more of EBITDA. That's 20 basis points in a year. So to me, it's very targeted in terms of what we're looking at and ensuring that we are deploying our resources effectively.
This is the capital deployment chart. I really want you to focus on a couple of things here. One, that, you know, we're doing a little bit of, you know, delevering as we go, nothing more than the mandatory maturities that are coming due. We are committing to $375 of buybacks. This was another question we had coming out of earnings call, which is, is there a signal that your buybacks are slowing down? The reality was we didn't want to get ahead of this conversation on earnings day three weeks ago. We signaled that we're holding the line because we wanted to have this conversation, because this is not a good conversation to have on a year-in-year-out basis. We wanted to commit to a three-year plan.
What this says is we are committing to about $375 million, which, by the way, still leaves us about $500 million of capacity for M&A over the next couple of years. I've always said this. We could run leverage in this company. We have phenomenal cash flow. We can run leverage at just below three or just over three. We have enough capacity for capability-based tuck-in. We're not chasing scale. We want to make sure that we are deploying this. And this is really our path to free cash flow per share, that we are going to grind from $8-$12 over the course of the next, you know, three years such that we can tangibly commit to growing the business and delivering enough cash and really not doing stupid things on capital deployment. I think just stay the course. The message is not changing.
As many things as we're improving and doing things differently, strategically speaking, and from an innovation front, the financial fabric that we've established is soundly in place, and that's where we are committed delivering. A couple of charts on ROIC. This is an important metric. You heard Lauren talk about it, and I've got a couple of pictures here. SAIC in FY 2019 and SAIC at the end of FY 2024. Here's where we see SAIC in FY 2027, that we are consistently committing to remain asset-light, grow EBITDA from the business. Buying our own shares generates real ROIC that we think will really create some significant value. I'm going to end with this chart because to me, this sort of sums the calibration of all the different things you heard today. We are truly committed to growing this business at 3.5% consistently.
Folks, if we happen to grow more than that, great. This is our commitment right now for FY 2027, 3.5% CAGR. We know we have a budget environment that's going to remain somewhat tight, so we want to make sure we stay calibrated relative to a budget environment that's going to be there. And so we are delivering 3.5% growth, 4.5% on EBITDA. We're buying our shares 4%-5% a year, translating to 10% free cash flow per share CAGR over the next three years. Just stay, stay to the message and stay on formula here and $12 of free cash flow per share in FY 2027. And we are committing to return about $1.3 billion of capital to our shareholders. So with that, we'll go to Q&A. We'll get the chairs over and we'll we'll be happy to take questions.
Thanks, Prabu. So we'll shift to Q&A now.
Hopefully, we've got some mics that will be. We're still. You said about what you got answered. Yeah, the audience mics. Hopefully, we've got a couple of those being worked around. Okay. While we, well, we've got the chairs, while Toni and Lauren find a seat, I just want to thank a few of the folks, Nari and Jeane, Nancy's around here for all their help in pulling this together. Tricia, who else? Becky, there are a lot of folks that really help us put all this together and make everything look pretty. And if we could just give them a quick round of applause. Thank you. And all right, who's got the mic? Tobey.
Thanks. Thanks for doing this. Your plan to increase the bid pipeline, the cadence, the dollars, as well as improve the win rates and retention rates.
How long a period of time is it reasonable for us to and you to be able to render a judgment on how your plans and changes, whether or not they're successful? And if that's a long time from now, what's sort of the near-term message and catalyst for investors today, if indeed that is kind of out in the horizon?
Maybe I'll take first swing and have Prabu or Lauren respond. Prabu showed you just in one of those last charts a progression of increasing our bid volume from $22 billion to $25 billion, I believe, to $30 billion in 2027. That's a forward measure that you will know by the end of this fiscal year how well we're doing almost on an annual basis on bid volume.
The challenge with the bid volume is that left to its own as a volume metric, it is very instructional, but it is not a strategic metric. You can bid the wrong things. You can bid not to your growth vector. You can see all if you look at our measures, the performance measurement scorecard that I shared during my presentation. If you'll see there is a set of metrics there around what we're bidding, where we're bidding, the nature of what we're bidding. So we're going to be measuring that on a quarterly basis on the quality of our bids, the volume of our bids, and quite frankly, the win rates relative to those bids. And those three triangulate each year.
I would say we're going to have to move towards and we are starting to move towards a more agile process, the same way of how we build solutions, what we ask our customers to do, we have to do, which is to be agile and getting the data on a quarterly basis and making adjustments. We didn't speak to one of the bullets on one of my slides said resource dynamic resource allocation. One of the reasons to flatten the organization and put an enterprise model underneath is we needed transparency to say halfway through the year, some deals will always move in the government. You think it's going to happen in April? It moves. Some deals you will disqualify because they've changed their acquisition strategy or you're no longer well-positioned. So deals move throughout.
Our challenge has been we haven't had an enterprise way to say where do we reallocate towards the deals that as the deal moves, what's the next deal up in the queue? And maybe that deal is not in the same business group. Maybe the better deal is sitting somewhere else in a different business group. We haven't had the enterprise transparency to say, and quite frankly, some of the willingness to do dynamic resource reallocation. So I would suggest to you that bid volume is going to be important. We can track that on a quarterly basis. We'll have an annual number. We've set targets. It is now part of our scorecard. How we bid, the strategic value of our bids is also part of our scorecard.
I think we need to come back to you with both because at the end of the day, that's our accountability is not just to bid, not just to bid calories over vitamins, but fundamentally to bid into our growth vector and to bid with our differentiators. But the last piece of that will be how we, in fact, ensure that we're getting. I think people are trying to get the calculation of how can you ensure north of one book-to-bill? One of the ways to do that is to start to look at your bid volume. When you do the math of bid volume relative to win rate, you start to get to a book-to-bill, and we feel confident that we can get above one.
Tobey, maybe the second part of that question, I think the investment case rides on communicating transparently, performing higher than expectations, and delivering solid growth on a multi-year basis. We all know we could go grab programs to juice up topline, and we're trying to do this the right way over the long term by picking programs that are truly asset-light, that are accretive to the portfolio from a margin rate perspective. So truly delivering that while we are delivering good cash out of the business. What you heard today was really a bet on SAIC. So the investment case for me rides on the fact that this is truly a bet that we will deliver consistent organic growth that will lead to higher levels of EBITDA and cash out of the business, and we're going to make smart decisions on capital allocation.
So to me, that's the investment thesis, I think.
Seth Seifman has a question all the way in the back there.
Thanks very much and good afternoon. I guess could you talk a little bit about mix changes over the course of, you know, this period? It seems there's an emphasis on civilian growth growing faster relative to defense and sort of, you know, where that target mix would be and then maybe between sort of, you know, enterprise and mission, you know, how you expect the mix to evolve over the course of this period.
Yeah. So I'll take the first part. Yeah. Hey, Seth. I think the way to think about this is a commitment to a pivot around civilian.
We've said that the margin rates from the civil portfolio are going to be higher than the margin from the rest of the business, think maybe 200-300 basis points higher than rest of DoD and Intel. And so I think there's a very accretive part of the portfolio. And as Toni mentioned, it is also a market that does not get the credit it deserves in terms of the actual TAM inside the market. So as we think about that, we think of this as an opportunity for us to take market share in that market. So we are not targeting a specific mix of civil versus the rest of the portfolio other than to say FedCiv is about a third of the portfolio right now, and we're looking for a little more balance than that.
Yeah. I think that's fair.
Look, in terms of the enterprise, mission, Enterprise IT, Mission IT, look, our goal will be to move up a value chain and to do that particularly in the accounts that are strategically ready to make those moves. There are customers that are either sending signals or customers we can shape signals for moving up that value chain almost independent of the initial contract we have. Certain parts, I think one of you all asked a question, certain parts of the military, if you will, are more forward-leaning. We know the Air Force and some of the combatant commands are further into the enterprise and mission IT. That's one of our fastest growing areas has been historically in that space. So you're going to see us leverage where we can. It's not going to be a spray and pray.
To Prabu's point, I could say value creation in every contract. I could say it on all 34 accounts. In effect, we've got a handful of strategic accounts, probably 10-12 across that portfolio where they're ready to make that move. And the question is our ability to systematically deploy our differentiators and drive the move. So I want to make sure we're not setting a target on, you know, what mix we are going to be measuring in our bid case excuse me, in our bid pipeline. Do we have a percentage? What is being bid out of Enterprise IT and Mission IT? That's going to be the driver on new business. But on existing business, we're going to be measuring in an interim way how you're moving up the value chain.
Great. T hank you.
Cai.
Yeah. Thanks so much.
So can you talk about what your win rate is on new bids now and where you see that in 2027?
So I'll try and answer it this way, Cai. Our win rates we've shared are higher than the 30% that you will normally see in the marketplace. And so I think, frankly, one of the reasons we've been able to deliver, you know, 3%, 4% growth on average over the last three years is our new business win rates are pretty high. You almost wonder if you're bidding enough things if your win rate is that high. Obviously, it's helped offset some of the recompete losses and the headwinds we've had on the recompete front. So without putting a specific number, it's higher than the 30% we would expect to see and have grown accustomed to see. And it's probably higher than we want it to be.
We want to make sure we're also bidding differentiated new work. So we want to make sure the pipeline's in a place that can actually support the kinds of things that you saw today.
So if you do the math, basically, if you go from, say, 79% to 90%, you basically pretty much get home. So what are you assuming, you know, as you're increasing the number of bids, are you assuming you can? I assume you're assuming you can sustain the 30% +.
So I would say we run all kinds of scenarios. And I think we flex the scenarios for differences in win rates between recompete and new. And that includes recompetes that require a level of innovation different from the current baseline of programs than new that maybe new were than the work we're targeting.
We've modulated the internal view of this to ensure that we are not assuming the same level of win rates for the next three years, but to say if there is a really strategic bid out there, in realistic terms, can we think P win there is 40%? We would ratchet that down to a 20% P win because we think the competition's really stiff. We've actually modulated the win rates, expected win rates on recompete and new. All I would say is we should expect book to bill to be better than 1.0 if we get to the kind of submit volumes that we're targeting as well as the kind of accretive work we're targeting.
I guess I would just say in response as well, we've just outlined a set of four growth vectors. We've talked about four to five enterprise differentiators.
We're stepping into competitive part. We're in a competitive part of the market, and we're stepping into super competitive parts of the market. We realize that, obviously, these are fast-growing and accretive areas. So when Prabu says, "We've modeled and sort of dissected our pipeline to ensure that we're not doing just a simple new business recompete win rate and just applying that," we have there are dimensions within each one of those categories. Will we expect I was very concerned at how high our new business win rate was when I came in, to be honest, because it either said we weren't bidding enough or possibly we weren't bidding into the more strategic areas, which will be more competitive, and that's what keeps the market at about 30%.
So are we willing to see some of that drop from back to market levels for new business if we were positioned correctly? Yeah, we're willing to see some of that, but not at the expense of losing any more recompetes. That we aren't willing to do.
Thank you.
Sheila.
I guess to that question, guys, what do you think resulted in lower recompete win rates? Toni, you talked about a little bit feeling too comfortable on a contract and not maybe winning on contract growth versus the inverse on the new bids. You guys won a higher percentage. So what resulted in that? And what do you think is the biggest risk to your strategy? Or is it just once the momentum gets going, it takes off?
I'll let you hit the first part of that, and I'll hit the biggest risk. Yeah. So look.
Sheila, it's a fair question, and there's a good amount of introspection inside the company. I think it comes down to can we produce real innovation while we're on contract? And I think Toni said it exactly right, which is, you know, winning that recompete starts on day one of program execution. And if we get lackadaisical thinking that our current statement of work and doing that effectively is going to ensure that you hold a recompete, that is absolutely the wrong mindset. So I think part of the fix here is to ensure that we are competitive from day one of a recompete. The second thing, customers want more value for the same cost. So that means we have to really be innovative in the way we bring solutions. You've heard us talk about our venture investments. You heard about Morpheus. We have Orca that's plugged into T-Cloud.
We are making smart venture investments that will allow us to build them into the fabric of the delivery model. Getting it to be systematic across the enterprise is where the challenge is. Toni said something that was really important. We've had, I'd say, for reasons that I would call, you know, entrepreneurialism in the organization, a little more of an opt-in culture. I think part of what you are hearing today is there are going to be fewer and fewer things that are opt-in. These are not nice to do. You have to do it, or you have to find another place that will let you do what you want to do. I think there is a change in the tone that comes from change in leadership.
But I think it's really important to talk about all those things, taking a little bit of time and hence our holding 2026 growth rates where they are, but actually showing inflection to growth rates in 2027.
So I'm going to respond to the second part of your question, but maybe connect it a little bit to the first part. Number one risk that I think we have is always around our culture, our culture's ability to adapt to a new way of going to market, to being able to sell and systematically engage with new portfolio items, to see themselves more than order takers but fundamentally consultative. I come out of a consultant. That's where I started my career as a consultant. And there is a DNA that comes with a consultancy about how you position. So we ask about the recompete.
I want to make sure that we don't overly simplify this. Introducing innovation to customers in our market is super difficult. There are customers in front of you that don't want innovation and want you to stay right there and stay quiet and do what we said in the contract. There are other customers you have to identify outside of that initial customer group. There are contract excuse me, contract vehicles and different impediments to introducing new capability. There are policy reasons Lauren spoke to. So it's a real skill, consultative skill set to say, "Hey, you didn't mention this need, but I see you have it. You don't see that the convergence is happening in the market. Let me introduce you. Let me bring that capability." Some companies have that in their DNA. We have in our DNA.
We know that mission as well as our customers sometimes even better. But how we shift to being able to say what we know and the tech that we have learned, how we compose that for our customer is a skill set. And it is a cultural shift for us to move in that direction and feel comfortable leaning in with that kind of consultative sale. And I believe that underpins the change on-contract growth, how we win recompetes, and how we bid and execute new business. So I'll be looking for as many cultural signals of that shift as we are looking for the financial outcomes that you all, I'm sure, will hold us accountable for.
Sheila, I'm going to add a little bit to that question, just having been a recent customer and actually, if you rewind a little bit, a competitor of SAIC as well.
So one of the things that I mentioned was I saw some inconsistency when I first joined the company. And I think that when you heard Toni talk earlier about the major efforts to ensure consistency of process and accountability in process as well as the centralization of BD, those are things that the company has done to get after some of that inconsistency. And some of that inconsistency also manifested itself in different account executives, different program teams really knowing who is the decision maker on my recompete or on my new business. And so from my perspective, and I shared with some of you earlier, when I was the CIO of the Department of the Air Force, I had so many different stakeholders. In any given bid, there was going to be a different group of stakeholders that were making decisions. They had different motivations.
So if you're a vendor selling in that space, you have to understand the entire complexity. Vinnie, who's our Executive Vice President for that group, he understands it. He came from that world. We have some places where we did not have that level of robust understanding. And through that centralization and through some of the consistency of process, we now have a little better understanding and better sensors across the enterprise to see where do we need to upskill some folks, where do we need to bring in some new relationships, and also making sure that we are consistently doing independent program reviews because it's very easy for a program team to say, "Our customer loves us.
Of course, we're going to win the recompete." I will share that the number one thing that makes me nervous if I walk into a proposal room is if the proposal team says first, "Of course, we're going to win because the customer loves us." Do you know who's on source selection? Are they actually making the decision? Is it someone over here? How's your relationship with them? And so it is always a multivariate equation. And I think that we now have the consistency and rigor to be a little bit more effective there.
Byron.
Yeah. Toni, a couple of questions on people. Does headcount grow pretty much in line with sales, or do you expect to get more productivity out of the workforce? So headcount should actually grow a little b it less. That's one question.
Yeah, it's a great question.
When I looked at our people metrics when I first came in, I was super pleased to see a couple of things. I saw the lowest attrition rate we've had in a number of years, and particularly even in critical skills. We call the critical skills those are sort of our data, AI, some of our technical skills, some of the lowest we have had. I also saw an acquisition engine, maybe best in class in terms of days to fill, the lowest days to fill metrics in the industry we're sitting with this team. The challenge we saw were we were also going to the market to fill, but not internal hires as the measure I look at. Do we incubate our own talent? How do we reset? That was where I had some concerns.
When we think about growing this portfolio, it's a combination of redeploying our own folks into new areas. It's a combination of growing our direct labor on our contracts, as Prabu and I talk about. You can look at our contracts. We have to grow our direct labor. There's a profitability element to that as well, but we have to grow our direct labor. So we're now tracking with our program managers, not just at the contract group, but that the direct labor grew on that contract. And that's about how do you share what's the share between your subcontractors? Sometimes it's about how you negotiate with the government. So we're expecting that growth has to be in line not only in terms of the revenue but direct labor. That's the only way we're going to get to the profitability that we're talking about.
And then you talked a little bit about kind of training and upskilling pe ople.
Yes.
You know, how does that fit into the growth plan? How long is that going to take? What specifically are you teaching people? What's the rollout on that? Fire away.
We've got three pilots right now, enterprise-wide pilots for upskilling. Our head of HR is thrilled with that question because we've not made this an HR initiative, by the way. This is a go-to-market initiative. This is not, "Isn't it nice to learn some skills and grow your " this is if we're going to market in these areas, particularly think about contracts where the same individual may be on the contract for a long period of time. The government is saying, "Did something happen with Billy?
“Am I paying that you're asking for a higher price, and Billy hasn't gotten more skills, hasn't been certified anything new? Why would I do so?” It becomes margin dilutive over time if you don't upskill your talent base. We're doing three formal pilots. One is some in geographical areas where we have large concentrations. We're also looking at one in the, as we know, in the cloud area. So we get technical upskilling around cloud and our ability to do secure multi-cloud. And every one of the business groups is introducing, as well as I'm pleased to say because I didn't make it a mandate, but it became pretty exciting that every one of the functional areas are all doing upskilling pilots within their own organizations. And remember, this is not going to be everyone. These are individuals who are prime and ready to level up.
We've got lots of modes of how we can educate them. The factory is helping us educate and do the upskilling. We expect to translate into how we bid. You know, what's super interesting about your question is how much our customers want to talk about this. They want to know how we're upskilling, and can they piggyback on the upskilling conversation for their own? We haven't quite yet seen exactly how it's going to show up in bids, but we're going to speak to it in our bids.
Here's another way. That was a great answer. Here's another way to think about it. We think about bid models, and we think about execution models. One of the things that we absolutely want to see in an execution model is what does the labor base on this program look like over the period of performance?
And so you break the metric down to say, "If my level of, let's call it, you know, a T7, is that the right mix on year three of a program, or can you actually do the same work with a T4?" Upskilling is really important because it allows us to fungibly move our people over a period of performance such that we're actually getting them ready for the next contract. So that's a very active, intentional process underway. The other thing we've changed is we have bid thresholds that are lower today than they were six months ago. We get to see more bids on a weekly basis than we did in the preceding couple of years. So that actually then forces the teams to think about how to get prepared for these conversations. And they know what we're looking for. We look for a labor base.
And we translate this very simply for folks. A dollar of incremental labor base is worth $0.20 of investment capacity. It's as simple as that. So if you have a program that's got $100 million of labor, it is powerful to get that program from $100 million-$120 million because that gives the enterprise $2 million of capacity or $5 million of capacity for investment. So we're breaking these down into digestible pieces. And then we're giving the PMs and our capture folks and folks that are running our business the levers to ensure that we can pull the right ones for the long term.
Bert.
Thank you. I guess just a question on the budget side. How do you think about accelerating your growth, or at least what are the risks to accelerating your growth in a budget backdrop that's likely to decelerate?
So I'll take the first part.
Yeah. So, hey, Bert. So I think what we've communicated for a couple of years now is we expect things to get harder in Washington, not easier. Our baseline assumption right now is that for the next year to three years, we're talking about a flattish budget environment. We can all debate, you know, real interest rate, real, you know, budget growth rates versus nominal rates. We are expecting this to be somewhat low-grade. So this puts the focus on differentiation and grabbing market share over the next three years, which is what we're targeting right now to do. So I think it's going to be a difficult budget environment. We've got an election year dynamic underway as well. But look, our, you know, we share the concerns that our customers have on budgets and clarity around outlays.
Reality is we navigate this every day with them, but we are not bullish about our assumptions on budget growth rates.
It's put some pressure as well on. You can see a target around on-contract growth. The lowest cost of sale for us is an existing contract that you can grow off of that base, right? Most of those contracts that we have have an approved budget, and we can grow right off of those base. We sort of sell into your ceiling, into your contract ceiling. So that's a strategy that we have over the next few years to underpin that. I would also suggest that if you look at our civilian business where we said we want to grow significantly, we happen to be in some of the cabinet-level agencies that have a fairly solid budget signal in terms of their appropriation. Again, I speak to VA.
I speak to Treasury, one of the best funded at this point. We'll see what happens, but we find ourselves in a place where we believe we can grow off our civilian business.
David.
Thanks, Toni. So you have the slide with the executive leadership team. A lot of new faces, at least to us here today. Maybe taking it down a level from there, one or two levels, how much turnover or change has there been in the leadership organization below? How much has come from kind of internal promotions versus looking to the outside? And where you've looked to the outside, what, you know, why, I guess, have you decided to go outside the organization to promote to the leadership levels?
So I would speak to it in terms of if I can kind of do the Rubik's Cube with you for a minute.
I chose to flatten the organization. I think you've heard the rationale of taking the sectors out. I elevated the business group leaders that, quite frankly, the role, they were none of them were reassigned to a different business group. So if you think about that continuity of mission, credibility, mission, expertise, they elevated directly to me. I went to the market. We wanted to take what had been sort of merged as an enterprise operations organization that included everything from our innovation factory to procurement and contracts. And we broke that up. And I went to the market for a Chief Innovation Officer because I wanted to drive a different innovation portfolio approach to the market.
As well, I went, quite frankly, to a trusted individual who I had worked with with two other organizations who I knew could run the enterprise operation, but also fundamentally had built the business development engine for the federal Microsoft Federal when it spun several months ago. Excuse me, several years ago. He's like, "Wait a minute. I was with you several months ago." So I went and got Tim Turitto. When we looked across the sort of talent that existed both inside and outside, I knew that we wanted to do something bigger in civilian. I knew we wanted to be in the advisory space in civilian. And so we have a phenomenal civilian practice that has been growing. But fundamentally, I wanted to go get a civilian leader that could tick several boxes on that space. And that's how I went and got Srini.
When I look below the line, if you will, it's interesting. We've all talked about this account VP cohort. You probably say, "Why in the world they keep mentioning this?" We have 34 account vice presidents. A lot happens at that level. They run the accounts that flight up to these business groups. They run the P&L. We've had very little turnover in that space on the account VPs of those 34 accounts. In fact, it's been very stable. We brought them together, and they've started to meet each other and engage on best practices. On the business development, so on the account side, the P&L management side, very stable. On the business development and capture side, not as stable purposely. We are doing performance management in that space.
When I say I'm making investments, I'm not just bringing in headcount, which we are, but we're also exiting those who don't hit the performance bar. You can't have the book-to-bill we've had for the last few years and the growth pattern we've had and not take a look at your business development and capture team and say, "Wait a minute. We've got to take a look." And we have. I'm super impressed with the gentleman we've put on top of that, Ravi D. He's sorry, Ravi Dankanikote, who's here. He had been on our civil and defense sector. He sees the whole market. And he standardized. And I've given him absolute authority to go through and to raise the performance bar. And then we've started to work on incentives. And Prabu, I thought, did a great job of skin in the game.
Now, when we start putting more skin in the game, you saw it on TSR metrics, relative TSR metrics. You saw it in terms of PSUs and the shift in PSUs to RSUs or RSUs to PSUs. We've got vice presidents that have to kind of sign up for more skin in the game. Will that have some trickle-down effect? Hasn't happened yet. You know, we just did bonus payouts. Everybody's smiling right now. Give them a week. You know, we'll see. But so I'm everybody's best friend right this moment. But we'll see if there's a cascade. But if the reason is, "Hey, I don't want to sign up for skin in the game," or, "Hey, we're raising the performance bar.
We've just instituted a new performance management process that we will be using to codify goals and to hold people accountable. We've got uptempo in this company right now, uptempo. And the uptempo says personal accountability that starts with me, which I share my priorities every quarter with my team and with the organization. And I also share how well I did on the last quarter. So there may be some turnover as a result of that, particularly maybe in the vice president ranks as they start to understand what this means. But so far, pretty solid on P&L, on the P&L side, not a lot changing below the bar there, and some shifts happening on BD and capture.
Matt.
Hi. Thanks. Toni, you talked in your slides about kind of shot selection in your bid process, which I kind of implies maybe there's some areas you could de-emphasize.
Could you talk about what those are and kind of how big a share of the portfolio that is, if that's maybe a headwind we should think about?
I can talk about the areas. I'll let you hit the size of the portfolio, which means Prabu will summarize at that level. Look, part of our strategy was to put rubrics around areas that we have either been challenged by in the past or they don't fit our financial profile. And so in terms of bid rubrics, what's good and what's not acceptable? A couple of those areas where we've put out rubrics, one in the SETA area, we've said, "Hey, this is what a good SETA bid looks like. This is when the revenue and the accretion value is where we're comfortable.
This is what good CETA looks like." We also talked about, "This is what good system integration and development looks like," where we do a lot of assembly and integration. But this is when we're going to do it when it's low, when we truly have domain expertise, when there's a low CapEx or low upfront investment. There are certain rubrics around it. So it's in the rubrics that people are understanding. It's still business that we do. It's business that's going to come up the value chain for us. But if we're going to bid new, we're going to bid into the rubric. If it doesn't fit the rubric, we're not bidding there. In terms of sizing that. So I'm going to try and avoid the direct answer to that question. Of course. That's why I sent it to you. I thought you would.
So here's how we think about this. I think we set return expectations for every bid that goes out the door. And over the last couple of years, especially this year, we are continually expecting to generate higher levels of profitable growth than the preceding contract. So that's part one of the focus. Second part of the focus, you saw the taxonomy discussion from Toni. We want our programs to see themselves inside the new strategy. If you're services and you're going to remain services for the next five years, maybe we really ought to think carefully about, "Is this a market we need to be in?" But we want them to think about, "Can I change a service bid to become more of an integrated solutions bid over a period of time? Can I take a cost-plus program, sell software sprints by the drink?
Can I sell them licenses out of our commercial operating factory such that we can accrete up even a normal cost-plus program?" So I think we're coming at it in a couple of different ways, recognizing that the portfolio we have is the portfolio we have today, but we are actively trying to transform that portfolio to make it higher-end relative to where it is today. So that's the way we think about it.
Any other questions?
I know Jon Raviv is tempted, but I think he's going to hold off.
You want?
I was looking at the clock. Thanks very much, Jon Raviv of Capital One. You mentioned before that sorry, the civilian market underappreciated in terms of TAM. I think it might also be underappreciated in terms of specialization, various entry. I mean, there's a whole list of reasons why and politics as well.
It's a whole list of reasons. Can you talk about what you're seeing in the market? I'm curious, also, Lauren, your perspective on coming from the defense side, what you're seeing in the civilian market across certain agencies that has changed to create a more attractive market, let's say, both from a company perspective and also why maybe outsiders should also appreciate that market too? Thank you.
Sure. Why don't you guys start, and I'll jump on?
Okay. Let me just say, having spent a good bit of my career in the civilian space, you know, the civilian market has moved fastest, if you will, to cloud and to some of the new emerging technologies. They are not burdened by heavy platform weapon system type purchases. They have gone much more directly.
Now, each agency, and you could kind of rank the cabinet agencies of who's furthest, where the laggards, but fundamentally, they buy in that mission and enterprise IT space. They know how to buy in that space. They do procurements that play to that space. They send fairly clear signal. And that's really been the case, I would say, over the last five to seven years that civilian has moved out in that space. So then I look at where we're positioned in the civilian market in about five to six key cabinet agencies that are not only pretty well-funded going forward, but they are large substantive purchasers of enterprise and mission IT where we happen to be, whether it be Department of Transportation and the FAA, or we could go all through State Department, various places where we are.
I think the other signal for us is where there are agencies in the civilian that actually look and reference what happens in the national security space. And there are certain agencies like Department of Homeland Security where we are very well-positioned that absolutely look at and take, if you will, we have great validity with what we do in national security in the DHS space. So we happen to have some cross-sell, cross-demand, cross-signal kinds of opportunities that we want to take advantage of in the civilian space. I'm not in any way suggesting the civilian space has just miraculously gotten to be a better place to be in the market. There are many companies that play on both sides. I think we are super branded on national security because of our history.
We're going to have to do some significant branding to get in the civilian space. A lot of people don't even realize how large our civilian business is as part of SAIC, so we've got some opportunity there. But overall, it's been a pretty solid market for those in the system integration space because of how they purchase and how creative the opportunities are there.
Absolutely. Toni pretty much answered your whole question already, but I'll add a little bit of color. A lot of the technology that we've already discussed applies very well to the civilian space just as it does in the DOD space. The problems are different. The underlying technology is not as different. The domain expertise is very different. We have strong domain expertise. Toni mentioned some of the agencies that we're focused on.
But I think that the mission advisory piece that is core to our strategy, I think that is kind of the secret piece that was missing before. We do do some advisory work today, but it is more fragmented than it should be. And we've not been as focused on it. And so you've seen other companies that started in the advisory world kind of shift more toward the implementation world. And it's been challenging for them, but they've made that switch. We want to do a little bit of a shift in the other direction. We are incredibly effective when we get in front of a customer, and we can solve a problem, and we can show a product, and we can demonstrate a real solution on the fly. We're really good at that. We need to do that more often.
We need to do it earlier with domain experts that can get in with those agency heads and really go much farther left of RFP than we typically have in the past. I think that as we build out that practice, you're going to see us naturally take on more of that share in civilian as well.
Great. Again, I think as we started with, we all know this is a busy time of the year and the quarter for you also. We appreciate your time and the investment you're making into us. If you have any questions, follow-ups, let me know. We'll talk to you again with, what is it, first quarter earnings.
Thanks.
All right.
All right.
Thank you.
Thank you.