Build it and the customers will come, then return. But don’t ask Jacobs Engineering Group about its keys to success. The company isn’t talking. For Jacobs, silence is golden — or at least profitable.
Spokeswoman Mary Bloom declined to comment for this profile or provide access to Jacobs officials, saying it is company policy not to comment publicly on any aspect of its business, except for information disseminated through press releases.
The company, based in Pasadena, Calif., ranked No. 20 on the Top 100 list, with $1.3 billion in prime-contracting revenue.
Founded in 1947, Jacobs focuses on engineering, construction, operations and maintenance.
In January, the company won a three-year Air Force deal with a potential maximum value of $480 million.
Jacobs will provide engineering and technology acquisition support services to Hanscom Air Force Base in Bedford, Mass., with other work to be performed at locations nationwide.
Jacobs’ tasks at Hanscom include logistics support, modeling and simulation, configuration, and data management. The company will also be responsible for test and evaluation, security engineering and certification, and assistance for the Air Force’s Electronic Systems Center. Jacobs has been providing technical support to the Air Force for more than 55 years, including systems engineering at the service’s acquisition and logistics centers.
On the civilian side, Jacobs has a threeyear contract with NASA through the end of the summer for test operation services at the John C. Stennis Space Center in Mississippi and Marshall Space Flight Center in Alabama. If the award’s two-year optional extension is exercised, the contract value could be as high as $128 million.
Jacobs said it holds the bulk of the U.S. government’s major rocket-testing contracts. In addition to the NASA commitments at Stennis and Marshall, other contracts include work at the Arnold Engineering Development Center at Arnold Air Force Base, Tenn.; the Air Force Research Laboratory at Edwards Air Force Base, Calif.; the Naval Air Warfare Center Weapons Division at China Lake, Calif.; and NASA’s White Sands Test Facility near Las Cruces, N.M.
Andrew Kaplowitz, a vice president and senior analyst at Lehman Brothers in New York, said Jacobs is serious about repeat business, and making it a priority has paid off for the company.
“Most of the industries I cover are transactional,” Kaplowitz said. “Jacobs has a relationship- based model. The work they get is follow-on business with existing customers. That allows the risk profile to be lower. You’re not bidding on price; you’re bidding on reputation.”
Kaplowitz said Jacobs is the only company he follows that has consistently shown earnings- per-share growth of at least 15 percent each year in the past 10. Organic growth accounts for 10 percent, with the remaining 5 percent coming from acquisitions.
One of the notable 2007 Jacobs acquisitions was Edwards and Kelcey Inc., an engineering, design, planning and construction management firm with expertise in transportation, planning and environmental impact; communications technology; buildings and facilities; and land development.
Another acquisition was John F. Brown Co., an airport management consulting firm that specializes in financial planning and business advisory services. A third acquisition was the engineering, design, planning and construction management firm Carter and Burgess Inc. The terms of the three deals were not disclosed.
“Jacobs seems like it has acquisitions down to a science,” Kaplowitz said. “They buy these businesses and fold them in. That leads 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 professional services component of $7.6 billion. A year ago, the comparable figures were $10.7 billion and $5.8 billion, respectively.
