KBR Transforming Cyber Capabilities for Department of Defense with $199M Contract Win

Rhea-AI Summary

KBR has been awarded a $199 million contract by the Naval Information Warfare Center Pacific Program Executive Office Digital and Enterprise Services to support the Department of Defense's digital transformation. The five-year contract focuses on enhancing zero-trust capabilities, ensuring secure data flow and edge protection for military operations.

KBR will conduct research, analysis, and testing in critical technology areas including future generation wireless technology, trusted AI, integrated sensing and cyber, network systems-of-systems, space technology, and quantum science. The company's experts will provide recommendations for integrating prototype components into existing information systems to improve reliability and reduce costs.

Positive

• Secured a $199 million contract with the Department of Defense
• Five-year contract duration provides stable revenue stream
• Expansion into critical technology areas for military operations
• Opportunity to showcase capabilities and potentially secure future contracts

Negative

• Cost-plus-fixed-fee contract structure may limit profit margins

Insights

Financial Analyst

KBR's $199 million contract win is a significant boost to its defense sector portfolio. The five-year duration provides stable revenue visibility, enhancing investor confidence. With a cost-plus-fixed-fee structure, KBR mitigates risk while ensuring profitability. The contract's focus on cutting-edge technologies like AI, quantum science and zero-trust cybersecurity positions KBR at the forefront of high-growth defense tech sectors.

Investors should note the potential for follow-on contracts and expanded opportunities within the DoD, given KBR's deepening expertise in critical areas. However, the cost-plus model may limit upside potential compared to fixed-price contracts. Overall, this win strengthens KBR's competitive position in the lucrative defense IT market, potentially driving long-term growth and margin expansion.

Cybersecurity Expert

KBR's contract to transform DoD's zero-trust capabilities is a game-changer in military cybersecurity. Zero-trust architecture is important for protecting sensitive data and networks in an era of sophisticated cyber threats. By implementing this model, KBR will significantly enhance the DoD's ability to secure data flow and edge protection, critical for maintaining information dominance in modern warfare.

The integration of zero-trust with advanced technologies like AI and quantum science presents unique challenges and opportunities. Success here could position KBR as a leader in next-gen cybersecurity solutions, opening doors to commercial applications. However, the complexity of implementing zero-trust across vast military networks shouldn't be underestimated, posing execution risks that investors should monitor.

Defense Technology Analyst

This contract highlights the DoD's strategic focus on emerging technologies important for maintaining military superiority. KBR's involvement in research and integration of AI, quantum science and advanced networking systems positions it at the cutting edge of defense innovation. The emphasis on autonomous computer information technologies suggests a shift towards more AI-driven defense systems, potentially revolutionizing military operations.

For investors, this signals KBR's evolution from traditional engineering services to a high-tech defense solutions provider. The diverse technology areas covered under this contract could lead to multiple revenue streams and intellectual property development. However, the rapid pace of technological change in these fields presents both opportunities and risks, requiring KBR to maintain agility and continuous innovation to stay competitive.

HOUSTON, Aug. 20, 2024 /PRNewswire/ -- KBR (NYSE: KBR) announced it has been awarded an estimated $199 million cost-plus-fixed-fee contract supporting the Naval Information Warfare Center Pacific Program Executive Office Digital and Enterprise Services (PEO Digital) Technical Director's Office. KBR was awarded this contract under the Department of Defense Information Analysis Center's (DoDIAC) multiple-award contract (MAC) vehicle. These IAC MAC task orders are awarded by the U.S. Air Force's 774th Enterprise Sourcing Squadron to develop and create new knowledge for the enhancement of the DTIC repository and the R&D and S&T community. The work will be performed over a five-year period in Charleston, South Carolina and San Diego, California. 

Under the terms of this new contract, KBR will transform the zero-trust capability of the Department of Defense. This state-of-the-art security measure ensures secure data flow and edge protection, a critical requirement for military operations. The team will perform research, analysis, assessments and testing to identify, develop, refine and integrate advanced technology experiments. KBR will address critical technology areas for the Department of Defense, including future generation wireless technology, trusted artificial intelligence and autonomy, integrated sensing and cyber, integrated network systems-of-systems, space technology and quantum science. These technologies enable autonomous computer information technologies that help protect the nation's networks and enhance information dominance.

"We are excited to play a significant role in the digital transformation and to expand upon our zero trust capabilities," said Stuart Bradie, KBR President and CEO. "This win allows KBR to provide valuable technology and mission expertise and showcase a capability that benefits the United States Department of Defense."

KBR's subject matter experts will provide recommendations for integrating prototype components and designs into new or existing information systems including command and control systems; communication systems; networking systems; cyber operations; intelligence, surveillance, and reconnaissance systems; business systems; and information security to increase availability, improve reliability, and reduce support costs.

About DODIAC Program

The DoDIAC, sponsored by the Defense Technical Information Center, provides technical data management and research support for DoD and federal government users. Established in 1946, the IAC program serves the DoD science & technology (S&T) and acquisition communities to drive innovation and technological developments by enhancing collaboration through integrated scientific and technical information development and dissemination for the DoD and broader S&T community.

About KBR

We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 36,000 people worldwide with customers in more than 80 countries and operations in over 30 countries.

KBR is proud to work with its customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.

Visit www.kbr.com

Forward Looking Statements

The statements in this press release that are not historical statements, including statements regarding future contract values, performance periods and outcomes, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks, uncertainties and assumptions, many of which are beyond the company's control, that could cause actual results to differ materially from the results expressed or implied by the statements. These risks, uncertainties and assumptions include, but are not limited to, those set forth in the company's most recently filed ANNUAL Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks and other U.S. Securities and Exchange Commission filings, which discuss some of the important risks, uncertainties and assumptions that the company has identified that may affect its business, results of operations and financial condition. Due to such risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Except as required by law, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

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SOURCE KBR, Inc.

FAQ

What is the value of KBR's new contract with the Department of Defense?

KBR has been awarded an estimated $199 million cost-plus-fixed-fee contract with the Department of Defense.

What technologies will KBR focus on under this new contract?

KBR will focus on future generation wireless technology, trusted AI, integrated sensing and cyber, network systems-of-systems, space technology, and quantum science.

How long is the duration of KBR's new Department of Defense contract?

The contract will be performed over a five-year period.

Where will the work for KBR's new DoD contract be performed?

The work will be performed in Charleston, South Carolina and San Diego, California.