During an earnings call Tuesday with Wall Street analysts, top executives at Jacobs said the company is excited about leading a joint venture becoming the new remediation contractor at the Department of Energy’s Idaho National Laboratory.
“During the quarter Jacobs was awarded the Idaho Cleanup Project at Idaho National Laboratory as a majority partner in the Idaho Environmental Coalition,” said Bob Pragada, president and chief operating officer, during a rundown on the Dallas-based company’s performance for the quarter ended July 2.
The contract, potentially worth $6.4 billion over a 10-year ordering period, “recently cleared protest,” Pragada said. A Bechtel-led group filed and later withdrew a challenge before the Government Accountability Office after the award in late May.
“Together with the DOE we will use Jacobs technology driven solutions to reduce the environmental legacy of the Cold War while delivering social value by supporting high quality jobs in the region and protecting the Snake River Aquifer, a critical element of Idaho’s agricultural industry.”
The contract will result in $780 million being added to the company’s already healthy backlog for the current quarter, which runs through the end of September, said Jacobs CEO Steven Demetriou during the call.
The DOE has given the Idaho Environmental Coalition, which also includes North Wind Portage and teaming subcontractors Navarro Research and Engineering, Oak Ridge Technologies and Spectra Tech, a green light to start the transition from incumbent Fluor Idaho on Oct. 1. If the 90-day process goes as planned, the Jacobs-led team will take control around Jan. 1, 2022.
The Idaho cleanup contract also includes running the much-anticipated Integrated Waste Treatment Unit (IWTU), which is designed to handle 900,000 gallons of sodium-bearing waste. In March, managers from DOE and Fluor Idaho told the online Waste Management Symposia that a 50-day test run should occur this fall.
Without specifying an exact date, DOE stood by that autumn timeline in a news release Tuesday, which said Fluor Idaho recently finished a set of tweaks to the facility. The IWTU, a first-of-a-kind facility was largely built in 2012 by a former contractor, CH2M-WG Idaho, but never worked as intended. Fluor Idaho has largely re-engineered the plant since 2012.
Jacobs is also leader of a remediation team at the Paducah Site in Kentucky and another joint venture cleaning up the West Valley Demonstration Project in New York state. In December 2019, Jacobs lost its Central Plateau Cleanup Contract at the Hanford Site in Washington state to a team composed of Amentum, Fluor and Atkins.
Earnings Dip in Connection With Acquisition
Earnings from operations dipped at Jacobs, Dallas, in the third quarter of fiscal 2021, which the international engineering and construction company attributed in part to a non-cash valuation connected with its March purchase of the majority stake in PA Consulting.
Net earnings for the third quarter ended July 2 were $165 million, or $0.82 a share, down from $227 million or $1.73 a share, in the year-ago quarter, Jacobs said in a press release issued Tuesday morning.
Quarterly revenue rose, however, to $3.0 billion from $2.7 billion a year ago.
Quarterly segment revenue for Critical Mission Solutions, the business unit that oversees contract work for the Department of Energy, remained flat at a little more than $1.2 billion. Looking at the past nine months, the segment’s revenue is $3.8 billion as opposed to $3.6 billion for the nine-month period a year earlier.
“We believe we are entering an attractive growth period for Jacobs, driven by strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply chain investments,” Jacobs CEO Steve Demetriou.