US Bureau of Reclamation Selects Jacobs to Design and Build Critical New Mexico Water Project

Rhea-AI Summary

Jacobs (NYSE: J) has been selected by the U.S. Bureau of Reclamation to design and build the San Juan Lateral Water Treatment Plant in northwest New Mexico, a $267 million project. This plant is the largest component of the Navajo-Gallup Water Supply Project, aimed at providing water to approximately 250,000 people in 43 Navajo chapters.

The plant will initially treat 18.8 million gallons of water per day, with the capacity to double. The project includes commissioning the San Juan Lateral distribution system and operations and maintenance. When complete, the water supply project will divert 37,761 acre-feet of water annually from the San Juan River Basin through two water treatment plants.

The Navajo-Gallup Water Supply Project is 70% complete, with initial water deliveries expected in late 2028 and final completion by the end of 2029. This project is important for improving living conditions in Navajo communities, providing water for various facilities beyond basic drinking water.

Positive

• Jacobs secured a $267 million contract for a critical water infrastructure project
• The project will provide water to approximately 250,000 people in 43 Navajo chapters
• Initial water treatment capacity of 18.8 million gallons per day, with potential to double
• Project is 70% complete, indicating significant progress
• Strengthens Jacobs' relationship with the U.S. Bureau of Reclamation

Negative

• None.

Insights

Engineering and Infrastructure Expert

This $267 million contract for the San Juan Lateral Water Treatment Plant is a significant win for Jacobs, showcasing their expertise in large-scale water infrastructure projects. The project's scope, including the ability to double capacity and serve over 200,000 people, demonstrates its long-term impact and scalability.

The contract highlights Jacobs' strong position in the water infrastructure sector, particularly in projects addressing critical needs in underserved communities. This aligns with increasing government focus on upgrading water infrastructure nationwide, potentially opening doors for more similar contracts.

Investors should note the project's funding through the Bipartisan Infrastructure Law, indicating potential for more government-backed projects in this sector. The long-term nature of the project, with completion expected by 2029, provides Jacobs with a stable revenue stream for several years.

Overall, this contract strengthens Jacobs' portfolio in sustainable infrastructure solutions, positioning them well for future growth in this essential sector.

Financial Analyst

This $267 million contract is a significant addition to Jacobs' backlog, representing approximately 1.5% of their annual revenue based on their 2022 fiscal year results. While not transformative, it's a substantial project that contributes to steady, long-term revenue growth.

The contract's nature - a critical infrastructure project with government backing - provides revenue stability and potentially higher margins compared to more competitive commercial projects. The multi-year timeline also offers visibility into future earnings.

Investors should consider how this project fits into Jacobs' broader strategy of focusing on critical infrastructure and sustainability solutions. Such projects often lead to follow-on work and strengthen relationships with key government clients, potentially driving future contract wins.

The project's social impact component may also enhance Jacobs' ESG profile, which is increasingly important for institutional investors. Overall, while not a game-changer, this contract reinforces Jacobs' strong market position in a growing sector.

San Juan Lateral Water Treatment Plant secures sustainable, clean water for Navajo communities

DALLAS, Oct. 22, 2024 /PRNewswire/ -- Jacobs (NYSE: J) was selected by the U.S. Bureau of Reclamation to design and build the San Juan Lateral Water Treatment Plant in northwest New Mexico. At a cost of $267 million, the plant is the largest and most important component of the Navajo-Gallup Water Supply Project. Prior to the project's initiation, more than 40 percent of the Navajo Nation households relied on hauling water to meet their daily needs, and to this day the Navajo Nation estimates that over a third of Navajo Nation households rely on hauling water to meet their daily needs. When completed, the project will provide water supplies to approximately 250,000 people in 43 Navajo chapters.

Jacobs will design and build the San Juan Lateral Water Treatment Plant to initially treat up to 18.8 million gallons of water per day, with the ability to double the plant's capacity. At full build-out the plant will be able to serve over 200,000 people. The project also includes commissioning of the San Juan Lateral distribution system, and operations and maintenance.

"Critical to improving the living conditions for Navajo communities, in addition to basic drinking water, this plant will provide water for commercial and retail businesses, health care, schools and other facilities," said Vice President Design-Build and Operations Management and Facilities Services Greg Fischer. "Our approach provides the Bureau of Reclamation a more efficient way of delivering critical infrastructure necessary to supply clean, reliable, long-term water for this community."

When complete, the water supply project will divert 37,761 acre-feet of water annually from the San Juan River Basin through two Jacobs-delivered water treatment plants. Once treated, according to Safe Drinking Water Act standards, the water will be conveyed and delivered through nearly 300 miles of pipeline, 19 pumping plants and several storage tanks.

"We are extremely pleased to award this contract to Jacobs, who we have a long-standing relationship with, having completed the award-winning Cutter Lateral Water Treatment Plant in 2020. Their consistent quality of work, reliability, dedication and proactive approach make them an invaluable partner," said Reclamation's Four Corners Construction Office Construction Engineer/Manager Bart Deming. "We look forward to continuing our collaboration and delivering safe, reliable drinking water together for the Navajo people."

The Navajo-Gallup Water Supply Project, funded in part by the Indian Water Rights Settlement Completion Fund through the Bipartisan Infrastructure Law, provides safe drinking water to Navajo communities in Gallup, New Mexico and Window Rock, Arizona. The project is 70 percent complete, with initial water deliveries expected in late 2028 and final completion by the end of 2029.

At Jacobs, we're challenging today to reinvent tomorrow – delivering outcomes and solutions for the world's most complex challenges. With a team of approximately 45,000, we provide end-to-end services in advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. From advisory and consulting, feasibility, planning, design, program and lifecycle management, we're creating a more connected and sustainable world. See how at jacobs.com and connect with us on LinkedIn, Instagram, X and Facebook.

Certain statements contained in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," and similar words are intended to identify forward-looking statements. We base these forward-looking statements on management's current estimates and expectations, as well as currently available competitive, financial and economic data. Forward-looking statements, however, are inherently uncertain. There are a variety of factors that could cause business results to differ materially from our forward-looking statements including, but not limited to, uncertainties as to the impact of the recently completed separation transaction pursuant to which we spun off and merged our Critical Missions Solutions and Cyber & Intelligence government services businesses with Amentum  (together, "new Amentum ") on Jacobs' and new Amentum's businesses, the timing of the award of projects and funding and potential changes to the amounts provided for under the Infrastructure Investment and Jobs Act and other legislation related to governmental spending, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets, the possibility of a recession or economic downturn, increased uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, among others, and the impact of any future pandemic or infectious disease outbreak, including the related reaction of governments on global and regional market conditions, among others. For a description of some additional factors that may occur that could cause actual results to differ from our forward-looking statements, see the discussions contained under Item 1 - Business; Item 1A - Risk Factors; Item 3 - Legal Proceedings; and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in our most recently filed Annual Report on Form 10-K, and Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations; Item 1 - Legal Proceedings; and Item 1A - Risk Factors in our most recently filed Quarterly Report on Form 10-Q, as well as the company's other filings with the Securities and Exchange Commission. The company is not under any duty to update any of the forward-looking statements after the date of this press release to conform to actual results, except as required by applicable law.

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FAQ

What is the value of Jacobs' (NYSE: J) contract for the San Juan Lateral Water Treatment Plant?

Jacobs (NYSE: J) has been awarded a $267 million contract to design and build the San Juan Lateral Water Treatment Plant in northwest New Mexico.

How many people will the Navajo-Gallup Water Supply Project serve once completed?

When completed, the Navajo-Gallup Water Supply Project will provide water supplies to approximately 250,000 people in 43 Navajo chapters.

What is the initial water treatment capacity of the San Juan Lateral Water Treatment Plant?

The San Juan Lateral Water Treatment Plant will initially treat up to 18.8 million gallons of water per day, with the ability to double the plant's capacity.

When is the Navajo-Gallup Water Supply Project expected to be fully completed?

The Navajo-Gallup Water Supply Project is expected to be fully completed by the end of 2029, with initial water deliveries expected in late 2028.