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Home » Awards Shift for Giant Military Support Contracts
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Awards Shift for Giant Military Support Contracts

April 25, 2019
Debra K. Rubin
KEYWORDS Fluor / KBR / LOGCAP / military support
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Contracting giant KBR appears to be the big winner in the U.S. Army’s April 12 announcement of contractors for the latest Logistics Civil Augmentation Program (LOGCAP V) contract.  with a ceiling of $82-billion, it covers logistics and construction support for the U.S. military and other agencies and entities globally for up to 10 years.

KBR gained contractor status in three regions, including Afghanistan, in what analysts say was an unexpected change that helped generate a 6% post-award stock boost for the firm.

Under the framework contract, from which firms gain work through individual task orders, KBR also will support European and North American commands.

In what appeared to surprise some analysts, Fluor Corp. was unsuccessful in retaining Afghanistan, held since 2008 and which analysts say had been one of its largest U.S. government contracts. In the new LOGCAP, analysts say Afghanistan support could generate about $1.4 billion in annual task orders for KBR.

Fluor was reselected as contractor for the Africa Command. Analyst Andrew Wittmann of Baird Equity Research speculated on revenue and earnings impacts for the firm in 2020, but others note its recent selection, along with five others, for a $975-million U.S. Navy “contingency”contract.

A Fluor spokesman did not confirm analyst and online speculation of a LOGCAP bid protest by the firm related to Afghanistan that could delay changes until year end.

DynCorp International, also an unsuccessful incumbent contractor in Afghanistan, reportedly filed a bid protest on April 24, according to Washington Technology, a defense services sector online publication.

AECOM is the second unsuccessful LOGCAP bidder, said the Colorado Springs Gazette

In a post-award report, Moody’s Investors Service said “for LOGCAP V, the Army prioritized past performance, proposal quality and capabilities ahead of price.”

Two new LOGCAP contractors also were selected. PAE and Parsons will support central and South America while Vectrus Systems gained two other contracts that Steven Fisher, construction analyst at investment firm UBS, says could generate about $1.4 billion in annual task orders.

The Gazette also said that Vectrus had held the Army's Kuwait-Base Operations and Security Support Services (K-BOSSS) contract, but it will be folded into the current LOGCAP contract.

K-BOSSS generated more than 40% of nearly $1.3 billion in revenue that the firm reported last year, the newspaper says.

Louis Berger Services, a unit of design firm WSP, announced that it is a key Vectrus subcontractor on its LOGCAP awards.
 

 

 

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Recent Articles by Debra Rubin

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Debra-k-rubin1

As ENR Editor-at-Large for Management, Business and Workforce, Debra K. Rubin has a broad vantage for news, issues and trends in global engineering, architecture and construction—from corporate finance and executive management to regulation and risk, next-generation workforce and developing markets such as offshore wind energy.

Debra also launched and manages ENR's Top 200 Environmental Firms ranking, which defines a $51-billion global market; is editor of ENR WorkforceToday e-newsletter on industry talent management; and supervises content for the Industry Buzz page, which leads ENR’s monthly Contractor Business Strategy report. She also is an organizer of ENR's annual Groundbreaking Women in Construction conference, a major AEC industry forum for talent management and women's career advancement.

Click here for more detail on the 2019 conference in May in San Francisco and plans in formation for the 2020 event.

Debra's reporting for ENR on the 2001 Ground Zero attack damage, response and recovery earned a Jesse B. Neal award from B2B media giant Connectiv and is featured in the National September 11 Memorial & Museum in New York City.

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