No. 8: Fluor's ready in a pinch
Texas construction and engineering firm comes when disaster calls
If your water pipes broke or some shingles blew off your roof, you'd call a plumber or a roofer. If a country's water and power supply lines were bombed to smithereens or hundreds of thousands of homes were pounded into kindling overnight, you might call the No. 8 company on this year's Top 100 list.
Fluor Corp. rebuilt Iraq's public works and water infrastructure, installed more than 58,000 trailers in Louisiana after Hurricane Katrina struck and renovated the Navy's only Pacific Fleet dry dock for nuclear-powered aircraft carriers.
The company's government services work landed it the No. 8 spot on the Top 100 with $2.8 billion in prime contracts during fiscal 2006.
For years, the Fluor government group has been responding to natural disasters under a contingency contract from the Homeland Security Department's Federal Emergency Management Agency.
When Katrina set her course for the Gulf Coast, however, that contract had hit its ceiling, said David Marventano, senior vice president of government relations at Fluor. "FEMA offered us a new contract, and that was under way before Katrina hit."
After Katrina hit, employees from Fluor subsidiary Del-Jen Inc. (DJI) and other Fluor companies went to the scene, he said. "We had people working around the clock and sleeping under tables, because they knew what we were doing was important."
After Katrina, Fluor held one of four FEMA contracts to install trailers and provide other emergency assistance. "We installed more trailers than any other company," Marventano said.
The initial contracts were for $100 million, but FEMA raised the ceiling on Fluor's contract to $500 million and then again to $1.4 billion, according to the Washington Post.
Through DJI of Rolling Hills, Calif., Fluor also won four new $100 million FEMA contracts, provoking protests that the company was neither small nor local, as required.
"When the contracts initially were let, there was no local economy, let alone anyone that could do the job," said Stan Soloway, president of the Professional Services Council, an industry group in Arlington, Va. FEMA's use of noncompeted or limited-competition contracts was appropriate under the circumstances, "although maybe it used them for too long," he said.
At the peak of Katrina recovery work, Fluor employed more than 2,200 Louisiana residents, provided craft training for residents to help in rebuilding, exceeded FEMA's goals by awarding 61 percent of all recovery work to small businesses and bought 87 percent of materials used in Louisiana, Marventano said.
The DHS Inspector General's report, triggered by the protests and issued in April, found that although FEMA's judgment was flawed on some points, Fluor was blameless. DJI was qualified under the Small Business Administration's 8(a) Business Development Mentor-Protégé Program, the IG ruled. DJI, as mentor, was partnered with small-business protégé Project Resources Inc., of San Diego.
Iraq contracts have added about $2 billion to company coffers since 2003. FluorAmec, a joint venture with British company AMEC plc, won awards from five Defense Department agencies for 25 Iraq reconstruction projects, Marventano said.
The peak for Iraq construction contracts has likely passed, said Ray Bjorklund, senior vice president and chief knowledge officer at Federal Sources Inc., based in McLean, Va. But companies that have been doing the work won't necessarily see their revenue drop. "They've been working closely with government and learning what government needs," he said.
"Companies like [Fluor] can work on a large scale, they can do construction and contingency contract work in an austere environment; they've learned how to manage the programs, and these are skills the government needs," Bjorklund said. "They've proven themselves and [government] knows they can actually perform the work."
In August 2006, Fluor won two contingency contracts for disaster recovery work: the $1 billion Global Contingency Construction ? Multiple Award Contract from the Navy and the $250 million Individual Assistance ? Technical Assistance Contract from FEMA.
Another subsidiary, Fluor Hanford, won a contract extension in October from the Energy Department for its nuclear cleanup work at the Hanford Site in Washington state. Fluor last year finished a similar cleanup project in Ohio for $4 billion in 13 years; the original estimate was $12.2 billion in 27 years.
In the government market, DOE will continue to need environmental remediation work, and Fluor works for the Army Corps of Engineers and DOD on the big logistical jobs. The company is also waiting to learn whether it will be awarded a contract under the Army Logistics Civil Augmentation Program, he said.
"The markets for almost everything we do are in a huge upswing," Marventano said.Profiles of the Top 20 companies in the 2007 Top 100
No. 1: Lockheed Martin's reinvention
No. 2: With SBInet, Boeing IDS takes flight
No. 3: Northrop Grumman rises to new challenges
No. 4: KBR gets down to business
No. 5: IPO catapults SAIC into a new era
No. 6: Raytheon strives for balance
No. 7: General Dynamics in full sprint
No. 8: Fluor's ready in a pinch
No. 9: L-3 leadership stays the course
No. 10 EDS, Hard-learned lesson
No. 11 CSC, Experience that counts
No. 12: Battelle seeks new frontiers
No. 13: Booz Allen, Quality over quantity
No. 14: Bechtel telecom makes a splash
No. 15: For BAE, persistence pays off
No. 16: ITT makes a push into new markets
No. 17: Dell, Talking about evolution
No. 18: Technology and service fuel IBM
No. 19: Verizon caps off a busy year with a big win
No. 20: United Technologies gains altitude