U.S. taps DynCorp, Fluor over KBR for Afghan work
WASHINGTON, July 8 (Reuters) - DynCorp International Inc [VETASD.UL] and Fluor Corp (FLR.N) have been chosen over KBR Inc (KBR.N) for five-year contracts worth up to $7.5 billion each to support U.S. troops in Afghanistan, the U.S. Army said Wednesday.
The deals involve one base year plus four options years to provide laundry, dining, recreation and other such services, said Dan Carlson, a spokesman for the Army Sustainment Command in Rock Island, Illinois.
Cindy Green, director of DynCorp investor relations, said in an e-mail that DynCorp's initial award for the first year of the contract was for $640 million to $650 million.
Flour said in a statement it would book awards as the task order is incrementally funded, with an initial undisclosed award expected to be booked in the third quarter of 2009.
Fluor's task order award includes work for 74 operating bases in Afghanistan's northern region, the company said. Its scope of work includes construction services, power, water, housing, base operations, sustainment services and logistics support.
Dyncorp shares were up $2.04, or 12.8 percent, to $17.89 in midday trading on the New York Stock Exchange. Fluor shares traded down 55 cents, or 1.2 percent at $45.78. KBR shares were down 33 cents, or 1.96 percent, at $16.51.
The awards are the largest of their kind since the Logistics Civil Augmentation Program, or LOGCAP, was reshaped in April 2008 into a competition that pits KBR, which won the original work in 2001, against DynCorp and Fluor for individual tasks.
Carlson said the selection was made on the basis of best value to taxpayers as part of the LOGCAP IV contract. The three chief factors weighed were past performance, cost and each companies' proposal for the work, he said.
These new task orders will transition all remaining work in Afghanistan to LOGCAP IV. Similar processes to compete and transition the work in Iraq are also under way.
DynCorp was awarded work in southern Afghanistan, Fluor's work is in the north, Carlson said. (additional reporting by Karen Jacobs and Braden Reddall) (Reporting by Jim Wolf; editing by Gunna Dickson)
