Fairfax Snags Bechtel Headquarters

It aint’ Amazon HQ2, but it’s still a pretty big deal. Bechtel Corp., the global engineering and construction firm, announced its intention yesterday to move its headquarters from San Francisco to Reston.

The Reston office, which had relocated from Frederick, Md., in 2011, has functioned as the de facto “operational headquarters, with CEO Brendan Bechtel based there along with 1,300 other employees. But the move has big symbolic value because the the company had claimed San Francisco as its HQ for more than a century.

The company has asked about 150 employees to relocate to Reston from San Francisco and Houston. Executives are hoping that consolidation in Reston will enable more streamlined decision-making, reports the Washington Post. Even in the Internet era, it seems, there is value to keeping key employees in close proximity to one another.

Proximity to the federal government doesn’t hurt either. “Today a large portion of Bechtel’s revenue comes from government contracts for major infrastructure projects,” writes the Post. “It was the eighth-largest recipient of federal contract dollars last year, taking in $5.5 billion from the U.S. government, most of it from the Defense Department and the Energy Department.”

Bacon’s bottom line: As the national center of political power, the Washington metropolitan area is rapidly becoming a national center of business power. Corporations gravitate to Washington to be closer to the nation’s largest buyer of goods and services, the federal government, as well as to the center of lawmaking and regulatory rule making.

The governor’s office normally issues a press release for every economic development deal consummated by the Virginia Economic Development Partnership, along with details of state and local grants, tax breaks and incentives, but none was forthcoming for Bechtel. There was none from the Fairfax Economic Development Authority either. The allure of doing business near Washington is so great, it appears, that there was no need to bribe Bechtel to move its headquarters.

From a prestige perspective, snagging Bechtel confers considerable bragging rights upon Fairfax County, which is home to eight Fortune 500 companies. Bechtel is one of the largest privately owned corporations in the United States, generating 2016 revenue of $33 billion.

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13 responses to “Fairfax Snags Bechtel Headquarters

  1. What? No coverage of the natural gas pipeline explosion in West Virginia?

    • Peter, I’m missing your point. Is Bechtel building West Virginia pipelines? Does the Northern Virginia location give the company an advantage in getting pipeline contracts? What’s not getting covered at Bacon’s Rebellion. Please elaborate.

  2. Did Bechtel build it? Otherwise get your own post.

  3. Interesting what doesn’t get covered at Bacon’s Rebellion. ANd no, I am not getting my own post after having contributed to this one for a lot longer than you have.

    • Well, I was actually suggesting a different post on this blog, Peter. Pipeline safety is a legitimate issue, and now that I’ve read about it that was a serious accident but apparently without loss of life. All transportation methods have risks. And I tend to agree with Reed that this consolidation by Bechtel in the DC region is good news, but hardly a huge economic development win. DC is the magnet.

  4. This Bechtel story is a non-story, purely cosmetic. The 150 new workers moving here tells makes that story and makes its message clear.

    While not relevant to this particular story, Bechtel has been making a fortune here for decades in northern Virginia, for example, $350 million on Dulles Airport alone between 2000-2100, monies paid not for doing any construction work on the airport, but instead for supervising the construction work of others who enlarged the airport unnecessarily, one that was originally built soup to nuts for $100 million.

    • I think they led the fist phase of the Metro expansion too. At $32B in annual revenue and 50,000 employees that’s one hell of a private company. What Virginia ought to be doing is trying to incentivize Bechtel to bring more and more of those employees in-state.

  5. Peter’s point is fair. Given the plans to build natural gas pipelines in Virginia the explosion in West Virginia is relevant. However, a couple of people independently contributing to BaconsRebellion aren’t going to be able to catch and write about every story.

    From what I see and read the fact that nobody was hurt in the West Virginia explosion was nothing more than good luck. People living along Dominion’s proposed pipelines might not be so lucky.

    I live within a half mile of an existing gas pipeline. It’s buried but still ugly as hell. And at least once a year one of my neighbors smells gas and we have to call for repairs. The myth that these pipelines are safe is just that – a myth.

  6. Point one – contrasted with San Francisco, Fairfax County has very sane local government. And even Gerry Connolly is reasonable when compared to Nancy Pelosi.

    Point two – Bechtel is a pretty nasty company. It worked behind the scenes to prevent MWAA from taking a lower-priced bid from a company that would have built the rail tunnel under all of Tysons for a price that was less than the price to build the overhead structures and the very small tunnel.

    • I agree with your second paragraph re Bechtel, based stories I have heard from reliable sources, and matters that I personally have looked into as well.

      • Weren’t they one of the big contractors in Southeast Asia? A very profitable war for some very big companies and I’m pretty sure Bechtel was one of them. But it remains a major international player and it has to put people somewhere so glad to welcome more to VA.

  7. Is this news further confirmation of the notion that the free market will take care of where business people cite their businesses—without a lot of government financial incentives other than hospitable business environment?

    Just asking.

    • Bechtel is world class in its business, ruthless and extraordinary skilled at milking governments and quasi governments doing big infrastructure projects. Milking them is typically relatively easy given their clients are spending other peoples’ money and far too typically have not a clue as to what they are doing, much less what the people they hire are doing, including the many consultants and construction supervisors under contract are doing, much less what those doing the actual work at doing.

      Hence, the monumental overruns found on some many public construction work jobs. It is extraordinarily profitable for many contractors, and it far too often is crony capitalism at its worse, particularly if you can hook into the right players on the paying end.

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