Webvan Group Forms Strategic Alliance With Bechtel To Accelerate National Expansion

July 9, 1999 Webvan Group, Inc., operator of the online grocery and drug megastore, today announced a strategic alliance with Bechtel to accelerate the national expansion of its e-commerce infrastructure. With this alliance, Bechtel will have exclusive responsibility for replicating Webvan's distribution and delivery infrastructure beginning with 26 new markets over the next 24 months.

Webvan's distribution centers, highly automated facilities that enable the distribution of food and drug products, are designed to process product volumes equivalent to approximately 20 supermarkets. Webvan currently operates a 330,000-square-foot distribution center in Oakland, California, which services the entire San Francisco Bay Area. Webvan is scheduled to begin operations in its second market, Atlanta, Georgia, in early 2000.
The multi-year agreement, with capital expenditures expected to exceed $1 billion, will enable Webvan to more aggressively roll out its distribution centers on a national scale by utilizing Bechtel's engineering, design, procurement, and construction expertise.

Bechtel has sustained its reputation for excellence with such recent projects as the Hong Kong International Airport; Motorola's MOS-17 wafer fabrication facility in Tianjin, China; the Circe Pan-European fiber-optic system; Los Pelambres copper mine in northern Chile; the Atlantic LNG complex in Trinidad; the Boston Central Artery/Ted Williams Tunnel effort in Boston; the Dabhol phase 1 power project near Bombay; the management of the Nevada Test Site for the U.S. Department of Energy; and the modernization of Cantarell, the world's largest offshore oil field, in Mexico's Bay of Campeche.

As program manager for the Webvan megaproject, Bechtel will manage the design and construction of the facilities based on Webvan's proprietary technology and systems and will deliver completed distribution centers to Webvan on a turnkey basis.

"Our partnership with Bechtel is a major step forward for our company in two distinct ways," said Louis Borders, chief executive officer, Webvan. "It accelerates our distribution capabilities by placing the design and construction in the hands of the world's pre-eminent engineering and construction company, and it enables us to focus fully on our core competency, which is delivering a superior product directly to a customer's home or office at an unparalleled price."

"Webvan's state-of-the-art distribution center has already been recognized as setting a new standard in e-commerce," said John Carter, executive vice president, Bechtel. "Therefore, we're extremely excited to bring our expertise to what Webvan has already begun and to replicate it efficiently and intelligently in cities across the country."

Webvan opened its Bay Area service on June 2, 1999. Customers simply place their order online around the clock, 7 days a week at, and select a 30-minute delivery window at the time most convenient for them. Orders are then hand-delivered to the customer's desired location on that same day, or up to five days later.

About Webvan

Founded in 1998 by Louis Borders and based in Foster City, California, Webvan Group, Inc., is setting a new standard for Internet retailing by dramatically changing the way people shop for groceries. Webvan's experienced management team, intelligent systems, industry-leading partners and powerful backing will enable the company to quickly replicate its successful model in top markets across the country. Webvan's investors include CBS Inc., the Knight-Ridder Company, Benchmark Capital, Sequoia Capital, and Softbank Corporation.