KBR, Fluor, Dyncorp win US Army contract, shrs up
HOUSTON (Reuters) - KBR (KBR.N), a former unit of Halliburton Co. (HAL.N), Dyncorp International Inc. DCP.N and Fluor Corp. (FLR.N) were awarded parts of a U.S. Army contract with a combined potential value of up to $150 billion to provide services to the military in the Middle East.
The contract, the Logistics Civil Augmentation Program (LOGCAP) IV, would be worth up to $5 billion a year in business for each of the companies, with the potential duration of 10 years, the U.S. Army Sustainment Command said in a release on Wednesday.
News of the contract buoyed shares of the companies, which provide engineering, logistics and construction services.
KBR climbed nearly 1 percent to $26.59, while Fluor shares rose 1 percent to $105.19. Dyncorp soared 4.4 percent to $22.45. All three stocks trade on the New York Stock Exchange.
A total of six companies submitted proposals for the work, the Army said.
KBR is the Pentagon's largest private contractor in Iraq, where it has been paid more than $22 billion to provide logistics, meals, laundry and other services to U.S. troops.
The company, which was split off from Halliburton earlier this year, has drawn scrutiny from auditors and the U.S. Department of Justice for its billing claims related to its work in Iraq.
The Army said the contract was parceled out to three companies rather than just one to "more effectively manage the number and scope of LOGCAP actions required to fight the global war on terror."
Halliburton was headed by U.S. Vice President Dick Cheney prior to his taking that office in 2001.
In July 2006, the Army said it would rebid the massive contract, which was previously awarded to Halliburton's KBR in 2001. At the time, Fluor said it might bid for the work.