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GD to Support Army Investment in Medical Facilities

The U.S. military has been spending a larger and larger portion of its budget on medical care and facilities over the last decade. This has been driven by the operations in Iraq and Afghanistan, the recent growth in the size of the military, a large number of retirees along with members dependents. Primary care is through the TRICARE program which operates as a HMO basically. The different services also operate hospitals and clinics across the globe and the U.S.

During the recent round of Base Realignment and Closure (BRAC) hospitals were moved, expanded or built new to handle the changes in personnel assigned to the bases. There was also substantial investment at FT Sam Houston in San Antonio, TX as BRAC dictated centralization of all medical training there. This meant that facilities across the U.S. had to be merged as Army, Navy and Air Force training will take place there.

All of this work requires contractors to manage, execute and conduct the required work. General Dynamics (GD), for example, received recently 3 task orders from the U.S. Army to support their medical facilities. These are worth together about $100 million and have a period of performance of just over 2 years.

They will have GD provide equipment and movement services as 2 new facilities are stood up at FT Riley and FT Benning. These are new hospitals built as BRAC moved substantial numbers of troops to these sites from other U.S. bases. Both are planned to open in 2014. The third task will support new equipment and services for 2 clinics in Korea.

As the U.S. sorts out its budget issues there may be changes to plans right now for this type of investment but there will be some continued efforts to build new and better medical facilities for even a smaller U.S. military.

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Despite Drawdown U.S. Awards Iraq Support Contract to Versar

The U.S. military may have left Iraq but that still leaves U.S. State Department and other agencies still working there. These will continue to require specialized support and utilize some contractors to do this. In this vein the U.S. Army Corps of Engineers awarded Versar, Inc. a contract to continue to provide personal services and support in Iraq.

The contract is for two years and will have a value of of almost $9 million if all options are exercised.

Versar, Inc. is a Virginia based corporation that provides a variety of different services and management to its customers. These include engineering & constructions, telecommunications support, hazardous material disposal, facility support and so on. The U.S. and other countries require these kind of services in Iraq, Afghanistan as well as other areas they operate.

Versar is publicly traded and for the last quarter reported results of $33 million in revenue and a net income of $824,000.00. The share price recently closed at just under $3.00.

The U.S. will continue to need all sorts of support contractors as they transition both Iraq and Afghanistan from direct military action to supporting those country’s governments. While the market will not be as large as it has been over the last decade there will still be a significant amount of work especially for contractors like Versar which can provide a variety of specialized services.

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