Recently KBR Inc. (KBR) won a job order contract (JOC) from the University of Houston to provide construction management services across the university campuses and centers located in the city. The financial details of the contract have not yet been disclosed. However, as per the terms of the agreement, the value of contract and scope of KBR’s service will keep changing as and when task orders are issued later on.
Job Order Contracting (JOC) is a delivery method that helps to streamline and expedite the procurement and execution of small-to-medium renovation/repairing of construction projects.Especially in an institution like Houston University, JOC will complement the internal maintenance workforce, freeing them up from complex, one-time projects, so that they can focus on their primary mission.
KBR has a significant experience and a broad client base that uses its JOC services. Earlier, the company delivered a number of JOC-related services to the educational, municipal, military and healthcare sectors. Also, KBR possesses a breadth of services and experience to achieve the University's maintenance and construction goals due to its rich prior experiences.
During the last few quarters, a number of new contracts have been showering upon KBR. This included a contract by petrochemical giant Sasol Technology (Pty) Ltd, to provide engineering, procurement and construction management (EPCM) services for its gaseous oxygen compressor at the Oxygen East Plant in South Africa. Also its joint venture with CH2M Hill was awarded a contract worth $17.9 million under the Air Force Contract Augmentation Program (AFCAP).
Given the favorable scenario, we expect the KBR stock to experience a revision and show a rising trend in the coming quarters. KBR also recently hit a 52-week high on May 31, with a price of $36.69, beating its previous high of $36.46 attained on May 22, 2013.
KBR currently has a Zacks Rank #3 (Hold). Other stocks from the same sector that look promising include Michael Baker Corporation with a Zacks Rank #1 (Strong Buy), while both Pernix Group Inc (PRXG) and Willdan Group, Inc. (WLDN) have Zacks Rank #2 (Buy).