No. 14: Bechtel telecom makes a splash

Infrastructure modernization viewed as fertile opportunity


Top 100 revenue: $1.5 billion

40,000 Employees

2006 Revenue: $20.5 billion

2005 Revenue: $18.1 billion

Bechtel is a privately held company and does not report net earnnings.

"We feel like we fill important gaps in the market." James Payne

Rick Steele

Bechtel National, the government services unit of Bechtel, got its new federal telecommunications division under way in 2006, and the move helped the engineering, construction and project management company lock down No. 14 on Washington Technology's Top 100 list with $1.5 billion in prime government services revenue.

Bechtel announced the new division, led by James Payne, in November 2005. It wasted no time in making its mark. Bechtel was one of 10 vendors that won the Army's $4 billion Infrastructure Modernization program to update fiber-optic cable and wireless communications at Army bases and installations around the world. And it's also a key member of the AT&T team that captured a Networx Universal contract from the General Services Administration in March.

"Our success this year reflects the seriousness with which people take the Bechtel name, the team that we've built and the value-add that we offer, which is the engineering, project management, construction and high-tech expertise," Payne said, adding that Bechtel's federal telecom division is focused on providing wireless solutions, critical infrastructure protection and alternative access solutions for telecom and other utilities.

The competition for the Networx contract would seem to bear out that assessment, as Bechtel was asked to participate on several teams besides AT&T's.

The indefinite-delivery, indefinite-quantity contract, valued at $20 billion over 10 years, calls for three teams to compete for task orders for telecom and networking services. Government agencies are encouraged to use the contract vehicle for their basic telecom needs. The Treasury Department is expected to release the first task order this spring.

"There will be elements of the infrastructure that we're supporting AT&T on that are just core competencies of Bechtel's," Payne said. "But from our perspective, having a seat on this contract gives us, for the next 10 years, a place and a vehicle to deal with agencies directly and help them think very creatively about the development of infrastructure independent of the traditional sources."

The two wins provide the federal telecom division with the visibility and track record it needs to play successfully in the burgeoning infrastructure modernization market, Payne said. He also said the company is keeping an eye on some significant requests for proposals that are just forming.

"The government is making some very serious infrastructure decisions related to electricity, power and other utilities, and given the tight budget situation, that's a very significant signal to the community that major infrastructure has to be relocated, both physically as well as from an IT software perspective," Payne said.

Last year also was a good year for Bechtel's more traditional government business. The company teamed with the University of California, BWX Technologies and Washington Group International to win a contract in early 2006 from the Energy Department to provide the management and operation of the Los Alamos National Laboratory.

Craig Weaver, executive vice president of strategy, marketing and business development at Bechtel, described the contract as "the year's biggest highlight." Bechtel, which got under way on the contract in June 2006, is providing business and financial management, which involves overseeing 11,000 employees and an annual budget of $2.2 billion annually. The contract is worth as much as $79.7 million per year.

The same team banded together to bid on a similar contract managing Lawrence Livermore National Laboratory, which will pit it against a team led by Northrop Grumman. The contract is expected to be awarded later this spring.

Another highlight of 2006, Weaver said, was Bechtel's continuing work to help the Army eliminate chemical weapons stockpiled at bases and installations around the United States during and after World War II.

The company is in the process of completing its work at Maryland's Aberdeen Proving Ground, which became the first continental U.S. military site to eliminate its stockpile in early 2006. Bechtel is now focused on decontaminating the site and reverse construction, which it expects to finish by the end of 2007.

Bechtel also began gearing up in 2006 for similar efforts at the Pueblo Chemical Depot in Colorado and the Blue Grass Army Depot in Kentucky. It will take about a decade to destroy all of the chemical weapons, Weaver 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

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