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KBR-Triple Canopy JV Wins $118M Contract for Army Security Services in Kuwait, Vectrus Shares Plummet on Loss

ArmyLogisticsA joint venture of KBR (NYSE: KBR) and Triple Canopy has won a one-year,  $117.8 million contract that includes separately-funded option periods to operate a U.S. Army base in Kuwait and provide security support services for the military branch’s area support group in the country.

KBR-Triple Canopy LLC will perform work through Sept. 29, 2017, the Defense Department said Thursday.

The Army received five bids for the contract via the internet and used its fiscal 2016 operations and maintenance funds to cover the full obligated amount.

A FedBizOpps award notice posted Thursday said the Kuwait Base Operations and Security Support Services 2.0 contract’s first year includes a four-month phase-in period that starts Sept. 30, 2016 with an eight-month base term between January 30, 2017 and Sept. 29, 2017.

Four one-year option periods are available after the base period and the Army will determine those awards on an individual basis, while the fourth option year will include eight months of contractor execution and a four-month phase-out period if exercised.

The Army also has an option to extend services for another six months after the fourth year if needed.

(UPDATE — 10:24 a.m. Eastern time September 30): Vectrus (NYSE: VEC) disclosed Thursday its proposal for K-BOSSS 2.0 was not selected and the company’s services as incumbent contractor under the predecessor K-BOSSS contract are scheduled to run through Dec. 28, 2016.

Shares in GovCon Index-listed Vectrus plunged as deep as 52 percent in the first half-hour of trade Thursday and hit a 52-week low of $12.50 as the stock’s one-year high is $34.98.

The Colorado Springs-based services contractor’s stock is down 49 percent as of this update and trading at a volume roughly 12 times over the three-month average.

K-BOSSS is Vectrus’ largest government contract and contributed $218 million in revenue for this year’s first six months to represent roughly 35 percent of total sales for that period.

“Vectrus is reviewing the Army decision and will further determine the impact and the way ahead as they receive additional debriefing information, ” the company said in its statement.

Vectrus said Sept. 1 its bid for the Army Prepositioned Stocks-5 contract re-compete was not chosen and the company’s stock closed down 20 percent after that announcement.

AECOM‘s (NYSE: ACM) URS Federal Services business will take over that APS-5 contract under a one-year, $70.4 million modification.

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