Jacobs Engineering Group Inc.’s (JEC - Free Report) joint-venture business recently secured a $5-billion management and operating (M&O) contract from the National Nuclear Security Administration (NNSA).
Over the last month, Jacobs’ shares yielded a return of nearly 0.4%, as against 0.1% loss incurred by the industry.
This Zacks Rank #3 (Hold) company is poised to grow on the back of diligent business contracts and sound restructuring initiatives. Notably, Jacobs also signed an agreement (on Aug 7, 2017) to acquire CH2M HILL Companies Ltd., which is in sync with its efforts to become a $15-billion global solutions provider over the long run.
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M&O Deal Insights
On Aug 1, Jacobs joined forces with Huntington Ingalls Industries, Inc.’s (HII - Free Report) Stoller Newport News Nuclear unit and Honeywell International Inc. (HON - Free Report) to form the Mission Support and Test Services LCC (“MSTS”) joint venture.
NNSA is a division of the U.S. Energy Department and its Nevada National Security Site (NNSS) site is located near Las Vegas. Per the aforementioned deal, MSTS will directly operate and manage the NNSS site for the next 10 years.
The NNSS training ground and testing facility conducts several types of national security experiments. This helps augment safety levels of the United States and its allies through development of complex emergency and nuclear deterrent response capabilities.
According to the above discussed M&O contract, MSTS will adhere to the ethical standards of the NNSS site and proficiently look after its security and safety. The contract is anticipated to be accomplished by this November.
Jacobs noted that the prestigious NNSA contract has reinforced its status as a premium nuclear life-cycle solutions provider. Notably, it reinforced its competency as a renowned operations and management service provider of several critical infrastructure in the nation.
Jacobs quotes competitive prices for its contracts and ensures that the number of contract receipts increases over time. Over the last few months, the company has won a number of contracts from renowned institutions and public-sector agencies like the Chevron Corporation (CVX - Free Report) , National Aeronautics and Space Administration, and the U.S. Army. Notably, elevated transportation spending of the government authorities of Australia, the U.K. and the United States has largely increased Jacobs’ contract-winning prospects for the near term.
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