No. 20: Mum's the word for Jacobs

Build it and the customers will come, thenreturn. But don't ask Jacobs EngineeringGroup about its keys to success. The companyisn't talking. For Jacobs, silence is golden ?or at least profitable.Spokeswoman Mary Bloom declined tocomment for this profile or provide access toJacobs officials, saying it is company policynot to comment publicly on any aspect of itsbusiness, except for information disseminatedthrough press releases.The company, based in Pasadena, Calif.,ranked No. 20 on the Top 100 list, with $1.3billion in prime-contractingrevenue.Founded in 1947, Jacobs focuses onengineering, construction, operations andmaintenance.In January, the companywon a three-year Air Forcedeal with a potential maximumvalue of $480 million.Jacobs will provideengineering and technologyacquisition supportservices to Hanscom AirForce Base in Bedford,Mass., with other work tobe performed at locationsnationwide.Jacobs' tasks at Hanscom include logisticssupport, modeling and simulation, configuration,and data management. The companywill also be responsible for test and evaluation,security engineering and certification,and assistance for the Air Force's ElectronicSystems Center. Jacobs has been providingtechnical support to the Air Force for morethan 55 years, including systems engineeringat the service's acquisition and logistics centers.On the civilian side, Jacobs has a threeyearcontract with NASA through the endof the summer for test operation services atthe John C. Stennis Space Center inMississippi and Marshall Space FlightCenter in Alabama. If the award's two-yearoptional extension is exercised, thecontract value could be as high as$128 million.Jacobs said it holds the bulk of theU.S. government's major rocket-testingcontracts. In addition to theNASA commitments at Stennis andMarshall, other contracts includework at the Arnold EngineeringDevelopment Center at Arnold Air ForceBase, Tenn.; the Air ForceResearch Laboratory atEdwards Air Force Base,Calif.; the Naval AirWarfare Center WeaponsDivision at China Lake,Calif.; and NASA's WhiteSands Test Facility nearLas Cruces, N.M.Andrew Kaplowitz, avice president and senioranalyst at Lehman Brothers in New York,said Jacobs is serious about repeat business,and making it a priority has paid off for thecompany."Most of the industries I cover are transactional,"Kaplowitz said. "Jacobs has a relationship-based model. The work they get isfollow-on business with existing customers.That allows the risk profile to be lower.You're not bidding on price; you're biddingon reputation."Kaplowitz said Jacobs is the only companyhe follows that has consistently shown earnings-per-share growth of at least 15 percenteach year in the past 10. Organic growthaccounts for 10 percent, with the remaining5 percent coming from acquisitions.One of the notable 2007 Jacobs acquisitionswas Edwards and Kelcey Inc., an engineering,design, planning and constructionmanagement firm with expertise in transportation,planning and environmentalimpact; communications technology; buildingsand facilities; and land development.Another acquisition was John F. Brown Co.,an airport management consulting firm thatspecializes in financial planning and businessadvisory services. A third acquisitionwas the engineering, design, planning andconstruction management firm Carter andBurgess Inc. The terms of the three dealswere not disclosed."Jacobs seems like it has acquisitionsdown to a science," Kaplowitz said. "Theybuy these businesses and fold them in. Thatleads to increased earnings power over time."At the end of the first quarter of 2008,Jacobs said its contract backlog was$16.2 billion, which includes a professionalservices component of $7.6 billion. A yearago, the comparable figures were $10.7 billionand $5.8 billion, respectively.