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KBR Wins Two Task Orders From The U.S. Air Force for $106M

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Shares of KBR, Inc. (KBR - Free Report) have surged 232% on May 19. The company recently announced that its Government Solutions (GS) unit won two task orders worth $106 million from the U.S. Air Force's 774th Enterprise Sourcing Squadron to support the Air Force Life Cycle Management Center (AFLCMC).

Per the contract, KBR will support the modernization and sustainment of the C-130 Hercules aircraft. It will help in the development of recommendations on cyber security strategies, engineering analysis and assessment of testing for the International Air Traffic Control Radar Beacon System, Identification Friend or Foe (IFF) and Mark XIIB System (AIMS) Program Office.

The first contract is a five-year, $65 million recompete task order. KBR’s experts will support current and upcoming avionics upgrades and aircraft block modification programs; digital engineering transformation efforts; and all production, modernization and sustainment requirements.

Won under the Defense Information Analysis Center's (DoD IAC) multiple-award contract (MAC) vehicle, the task order will be carried out at Wright-Patterson Air Force Base in Ohio; Robins Air Force Base in Georgia; U.S. Coast Guard Base Elizabeth City in North Carolina; and in British Columbia, Canada.

The other one is a five-year $41-million recompete task order. KBR will conduct research and analysis and provide recommendations for the International Air Traffic Control Radar Beacon System, Identification Friend or Foe (IFF) and Mark XIIB System (AIMS) box and platform-level certification testing and system-level changes.

The work will carry out these duties at Robins Air Force Base, Georgia, with support at other locations around the globe.

Byron Bright, president of KBR’s GS unit, stated, "KBR has a highly experienced group of engineers and IFF technical experts who are honored to continue their trusted working relationships across the U.S. and allied IFF communities. The DoD AIMS Program is a critical component of maintaining U.S. air superiority across the globe, and we're honored to continue support of this important military capability."

KBR’s Robust GS Business to Aid Business

KBR is a leader in advancing air, space, cyber and missile defense systems for the U.S. military. The company’s Government Solutions unit has been performing pretty well. The Government Solutions business has been banking on on-contract growth in logistics and engineering, take-away wins along with new work awarded under the company’s portfolio of well-positioned contracting vehicles.

Strength in KBR’s overseas logistics and mission support programs on the back of higher military exercise activities, increased outsourcing of sustainment activities by the military and the ramp-up of the new wins led to the upside. Further, higher tasking for various missile defense and other military priorities in its engineering business areas under select IDIQ contracts also led to the upside.

Currently, KBR is witnessing higher revenues in the segment, given solid organic growth across each of its government businesses, including new work supporting Operation Allies Welcome ("OAW") and the acquisition of Centauri in October 2020.

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KBR’s shares have outperformed the industry this year. Its solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses.

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Currently, KBR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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