) recently announced that its Infrastructure, Government and Power
segment has received a base operating support services contract
from the U.S. Navy Facilities Engineering Command in Atlantic for
their Isa Air Base located in the Kingdom of Bahrain.
The project tenure is estimated to be one base year with a
four-year extendable option. The composite value of the five-year
contract is approximately $113.8 million. KBR has recorded the
advances for the base year in its second-quarter 2014
The scope of the contract requires KBR to supply integrated
support services for base operations including managing and
supervising the operations while complying with the environmental
norms of the region. The company will be responsible for everything
from managing information, galley operations, labor, materials and
necessary equipments to maintaining housing, wastewater and water
facilities at the base. This apart, KBR will be supervising the
support vehicles for the base and the nearby sites.
In 2013, KBR had received another contract from the U.S. Army
for its Logistics Civil Augmentation Program (LOGCAP) IV in
Bahrain. The contract, valued at about $53.5 million on an
aggregate basis, required KBR to support the U.S. forces with its
life support and logistics services.
Such contracts are critical for KBR to revive its
Infrastructure, Government & Power segment, which has been
witnessing weakness in the recent times. In the last reported
quarter, the segment revenues had declined 18.4% year over year to
$337 million primarily due to reductions in logistics,
infrastructure and mineral-based projects. Moreover, in 2012, the
segment had contributed as much as 24.0% of the company's total
revenues, which declined to 21.1% in 2013.
KBR is a global engineering, construction and services company
and currently carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the sector include
Altra Holdings Inc.
). All three hold a Zacks Rank #2 (Buy).
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