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Weekly Roundup September 19 – September 23 2016: KBR Becomes Major Govt Services Player & more


September 19 – September 23 2016

A Note From Our President & Founder Jim Garrettson

KBR’s expansion move into the U.S. and global government services markets became official on Monday when the Houston-based engineering company closed its $300 million purchase of the business known as Honeywell Technology Solutions Inc.

This deal’s closure took place nearly two months after KBR completed the $570 million acquisition of Wyle and these two transactions add up to what the buying party believes is now a $2.5 billion player in government services across the world with 7, 000 employees.

For KBR, this almost $900 million investment in the public sector market represents a move to diversify beyond its traditional engineering and construction work as the company expects 41 percent of its total annual sales to come from government services.

KBR CEO Stuart Bradie said in the HTSI deal closure’s announcement that his company views its bolstered government services business base as a provider of “high-value, low-risk, more predictable and long-term earnings capabilities” to help balance against the cyclical hydrocarbons business.

This statement reiterates Bradie’s message to investors in May after KBR first announced the Wyle deal, when he endorsed the federal market’s stability.

“There’s good visibility in the government side because of lengths in procurement cycles and we can see what’s down the tunnel 12-to-24 months out.”

To reflect its increased market presence and emphasis, KBR officially joined Executive Mosaic’s GovCon Index of 30 publicly-traded government contractors before markets opened Thursday for readers to follow and compare its stock to other GovCon services identities Leidos, SAIC, Engility, CACI and many others.

KBR entered the GovCon Index in a week that has seen a vast majority of equities rise after the Federal Reserve’s decision Wednesday to leave interest rates unchanged.

One additional full week of trading remains before the third quarter’s end and then it’s onto earnings season for many GovCon primes.

THE WEEK’S OTHER TOP 10 GOVCON STORIES

Jim Chilton Promoted to Boeing Network & Space Systems Business President
Chris Raymond, a VP for the N&SS business, will lead a new strategic defense and intelligence systems organization as part of a realignment.
Leidos to Support Army Geospatial Info Program Under Potential $777M Award; Roger Krone Comments
Seven teammates will partner with Leidos to help the Army perform airborne and terrestrial geospatial data collection work.
OFPP Administrator Anne Rung to Join Amazon Business
Rung will leave her post as the U.S.’ chief acquisition officer later this month and oversee a government-focused supplier initiative at the global sales giant.
Logistics Health, MSLA Added to $6.8B VA Disability Exam Process Support Contract
Five total awardees will help the Department of Veterans Affairs manage reports on former soldiers that apply for disability claims benefits.
Navy Taps 14 Firms for Potential $750M Administrative, Healthcare Support IDIQ
A total of 112 proposals were submitted for the five-year program that also includes clerical services to the Navy.
Booz Allen Wins Potential $268M Infrastructure Operations Task Order Under DIA E-SITE Vehicle
DIA originally selected Booz Allen as one of 50 companies for the five-year enterprise IT services program in July 2015.
Fairfax County Board OKs General Dynamics Plan for Reston, Virginia HQ Site
General Dynamics will occupy 160, 000 feet of office space at the future campus that will have a walking trail connected to a DC Metrorail station.
Capgemini’s US Govt Arm Chooses Tysons Corner VA Site for Consolidated HQ
Capgemini Government Solutions CEO Doug Lane said the business expects to add more employees on top of the 100 hired in the year’s first half.
State Dept Clears $2B Boeing KC-46A Aircraft Sale to Japan
Japan will purchase four Pegasus refueling tankers from the U.S. government to be equipped with Raytheon- and Northrop Grumman-made electronics.
DigitalGlobe, NGA Renew EnhancedView Imagery Service Agreement; Jeffrey Tarr Comments
NGA extends its satellite imagery contract with DigitalGlobe for an additional year and the renewal took effect September 1.

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