This is a blog to follow-up from our May 2019 blog on KBR’s U.S. Government business.
In May 2019, KBR rebranded their U.S. based government services business as “KBR Government Solutions” after retiring the very short lived KBRwyle brand Also changing in KBR’s business is their announcement moving three-segment business model to a two-segment model, effectively dropping the energy business to focus on the Government Solutions and Technology Solutions segments. CEO and President Stuart Bradie stated that this change was part of a shift away from high-risk commoditized markets and to focus on a more technology-based business.
KBR’s largest federal customer is NASA (see figure 1), driven mostly by the legacy Stinger Ghaffarian Technologies, Inc. (SGT) work and expertise. The Centauri acquisition will help KBR become less NASA centric. Refer to our previous blog on KBR to get a look at some of their marquee contracts.
What’s Next for KBR?
KBR has stated that they are making a shift towards their Government Solutions and Technology Solutions business but what are they doing to fuel that change?
Acquisition of Centauri
Just two weeks after announcing they would change to a two segment business model, KBR acquired Centauri for roughly $800 million. Centauri is a technology-driven company that provides high-end space, directed energy, and other advanced technology solutions. The company features more than 1,750 employees at 22 offices including a headquarters in Chantilly, Virginia. Centauri is one of only two companies that have a presence in all of National Reconnaissance Office’s (NRO) flying System Program Offices (SPOs).
KBR will add the company to its Defense Modernization and Space Exploitation businesses and assume it’s over $1 billion in contract backlog and options. Centauri’s revenue is primarily driven by its work with the U.S. Department of Defense and the Intelligence Community.
This acquisition helps KBR expand its space expertise from civil space into the military and Intelligence Community market. This also builds on KBR’s presence with NASA, the company’s largest federal government customer (see figure 1 above).
KBR’s evolution evidenced by investments and wins
- In June 2018, KBR brought on Todd May, former Director of NASA’s Marshall Space Flight Center to serve as Vice President of the Space and Mission Solutions business unit. He now supports civil space, mission IT and solutions, and human performance. This was a major hire for KBR and is another showcase of KBR’s commitment to continue to grow in the space domain.
- In January 2020, KBR became the first and only company to be able to train private astronauts at NASA facilities after signing a Space Act Agreement with NASA Johnson Space Center that allows the company to provide human spaceflight operation services to commercial companies. This move helps demonstrate the tight relationship that KBR has been able to develop with NASA
- In June 2020, KBR was awarded the $570 million ceiling, eight-year period of performance Marshall Operations, Systems, Services and Integration (MOSSI) contract. Work under this contract supports spacecraft, payload, satellite, propulsion systems operations, as well as multi-program facilities. This contract was created through the merger of two contracts, one held by Teledyne Brown Engineering and one held by COLSA.
- In November 2019, Kord Technologies (a Centauri company) was on a Raytheon-led team that received an order under an Other Transactional Authority (OTA) agreement with the U.S. Army to provide six Lower Tier Air and Missile Defense Sensor (LTAMDS), a 360-degree capable radar created by Raytheon. The team received $384 million with Kord being responsible for optimizing and testing integrated defense architectures for the solution.
- In August 2020, KBR was awarded a $165 million task order to support the U.S. Department of the Army’s Tactical Aviation and Ground Munitions (TAGM) Project Office. KBR will support various weapon systems under the task order including the HELLFIRE missile. With the recent acquisition of Centauri, we expect KBR will continue to make gains in this area of work.
- In March 2019, KBR was awarded three separate task orders under the Department of Defense Information Analysis Center’s (DOD IAC) multiple-award contract vehicle totaling $95.7 million to provide cybersecurity and engineering support. These awards support the U.S. Army, U.S. Navy and U.S. Air Force.
- In December 2019, KBR received a $216 million ceiling, four-year contract to provide cybersecurity services for the Defense Health Agency (DHA).KBR will support all DoD Military Health System sites which range from 1,500 to over 60,000 server and workstation assets and assist with as many as 430 programs of record systems. It is a continuation of their previous work with the DHA.
FedSavvy Strategies Takeaway
- KBR continues to evolve away from its legacy into a higher end technology driven business.
- The hiring of Todd May, acquisition of Centauri and recent major wins in NASA are all indicative of a solid foundation in the space market and focus to grow that core market
- The Centauri acquisition allows KBR to expand their work in adjacent markets such as DOD space operations with minimal overlap into their current operations while strengthening up their cybersecurity services.
- The Centauri acquisition also opens the door to the lucrative and difficult to establish Intelligence Community business.