FWLT (MM)

Jacobs Engineering Group Inc.(JEC) announced winning of three strategic contract awards. These three awards are from the three big nations: U.S. Army Corps of Engineers (USACE) Kansas City District, Civil Engineering and Development Department of the Government of the Hong Kong Special Administrative Region and from URENCO ChemPlants Limited, a wholly owned subsidiary of URENCO Ltd, UK.

USACE Kansas City District contract involves enhanced commissioning services for various projects within the Northwestern Division mission area. The building size of projects, prescribed by the United States Green Building Council, may vary from 10,000 to 500,000 square feet with the option of single or multiple building projects.

In the course of providing enhanced commissioning services, Jacobs will be supporting USACE guiding principle of environmental sustainability, while improving security and maintainability. The USACE expects to seek Leadership in Energy and Environmental Design (LEED) Silver rating for their new construction and major renovation projects.

This five-year indefinite delivery/indefinite quantity (IDIQ) contract is estimated at $9.5 million.

On the other hand, for the Hong Kong Government’s Special Administrative Region contract, Jacobs is intended to provide services for managing and operating the Public Works Regional Laboratory in Tai Po, Hong Kong with 21 laboratory-based staff for a period of three years. The Laboratory, which is a part of the Public Works Laboratories, comprising a central and five regional laboratories, provides construction material compliance testing services for public sector projects.

The contract value is estimated at approximately $5 million.

The URENCO Chemplant contract includes Jacobs’ services toward project management, design engineering, procurement, construction management and inactive commissioning associated with a new Tails Management Facility (TMF) at URENCO's Capenhurst site at north-west England in United Kingdom.

This new facility is anticipated to generate approximately 80 new operational jobs once commenced. The contract for this facility is scheduled to start immediately and the construction and pre-commissioning is expected to be completed by early 2015.

The contract value of URENCO Chemplant facility has not been disclosed yet.

Jacobs Engineering Group Inc. is one of the world's largest engineering and construction companies providing services to a variety of industrial, commercial and government clients across a global network. The company directly competes with its peers, such as Fluor Corporation (FLR), Foster Wheeler AG (FWLT).

We currently maintain a long term Neutral recommendation on the stock. Jacobs has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).

 
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