Many of our contracts require us to maintain minimum insurance coverage levels. The unavailability or
cancellation of these third-party insurance coverages could increase our overall risk exposure as well as disrupt the management of our business operations.
We maintain insurance coverage with third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain
specific insurance coverage limits. However, not every risk or liability is or can be protected by insurance, and, for those risks we insure, insurance is expensive and the limits of coverage we purchase or that are reasonably obtainable in the
market may not be sufficient to cover all actual losses or liabilities incurred. If any of the third-party insurers fail, suddenly cancel our coverage or otherwise are unable to provide adequate insurance coverage, then our overall risk exposure
could increase and the management of our business operations could be disrupted. If liability claims or losses exceed our current or available insurance coverage, our business, financial position, operating results and prospects may be harmed.
Regardless of the adequacy of our liability insurance coverages, any significant claim could have a material adverse effect on our business, industry reputation, prospects, financial condition and results of operations. In addition, there can be no
assurance that any of our insurance coverage will be renewable or obtainable on commercially reasonable terms or at all upon the expiration of the applicable coverage period.
The nature of our business exposes us to potential liability claims and contract disputes, and we may be involved in claims or litigation in domestic and foreign
courts that exceed our coverage or may not be covered by insurance and consequently could negatively impact our business, results of operations and financial condition.
We engage in large-scale program management at facilities where accidents or systems failures have in the past or may in the future result in substantial injury,
damage, and other significant consequences, exposing us to legal proceedings, investigations and disputes. Our business involves professional judgments regarding rapid response for operations, maintenance and repair, classified engineering, fire and
emergency services, risk management and environmental services. Because our projects are often large and complicated and may involve the use and handling of hazardous chemicals and wastes, our failure to make judgments and recommendations in
accordance with applicable laws and professional standards could result in large damages. Any such accident or failure at a site where we provide services could result in significant liability, warranty and other claims against us, regardless of
whether our services caused the incident. Further, the services we provide and projects we work on expose us to additional risks, including, but not limited to, personal injuries, property damage, permitting delays, work stoppages, labor disputes,
weather problems and unforeseen engineering, architectural, environmental and geological problems, each of which could significantly impact our business, results of operations and financial condition.
In the event of a dispute arising internationally, we may be subject to the exclusive jurisdiction of a foreign court or panel or may not be successful in subjecting
foreign persons to the jurisdiction of the courts in the U.S. We may also be hindered or prevented from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. In addition, in the
event that a foreign court decides against us, and we are unable to obtain indemnification from the U.S. federal government, we may incur substantial costs, which could have a material adverse effect on our business, prospects, financial condition
and results of operations. For instance, as described under BusinessLegal ProceedingsAfaq Matter, we are currently engaged in litigation in Iraqi national courts regarding our contractual relationship with a former
We are, and may from time to time become, involved in litigation and other legal proceedings. Claims have in the past and may in the future include
those by former disgruntled employees, contract disputes, injury and other matters. Any such claims could be costly, subject us to negative publicity or divert management attention. See Business Legal Proceedings.
We face aggressive competition that can impact our ability to obtain contracts and therefore affect our future revenue and growth prospects.
We operate in highly competitive markets and generally encounter significant competition to win contracts. Many of our competitors are larger companies, or divisions of
larger companies, that have greater name recognition, financial resources and larger technical staffs than we do. We also compete with smaller, more specialized companies that are able to concentrate their resources on particular areas. To remain
competitive, we must provide superior service and performance on a cost-effective basis. Our competitors may be able to provide our clients with different or greater capabilities or more favorable contract terms than that we can provide, including
technical qualifications, past contract experience, geographic presence, price and the availability of qualified professional personnel. In particular,