Comtech Telecommunications Corp. (Nasdaq:CMTL) announced today that its Maryland-based subsidiary, Comtech Mobile Datacom Corporation, has been awarded a three-year contract to continue to provide sustainment support for the U.S. Army's Force XXI Battle Command Brigade and Below - Blue Force Tracking ("BFT-1") program, a battle command real-time situational awareness and control system. In addition, the U.S. Army agreed to continue to license certain of Comtech's intellectual property ("IP") pursuant to a separate contract.
Under the new three-year BFT-1 sustainment contract, which has a not-to-exceed value of $38.2 million, Comtech will provide engineering services and satellite network operations on a cost-plus-fixed-fee basis and program management services on a firm-fixed-price basis. The base performance period begins April 1, 2014 and ends March 31, 2015, and the contract provides for two twelve-month option periods exercisable by the U.S. Army. The total estimated value of the base year is $13.6 million.
Comtech also entered into a new BFT-1 IP contract with a potential value of $30.0 million which enables the U.S. Army to continue to license certain of Comtech’s IP. The contract requires a $10.0 million annual license fee for a base period beginning April 1, 2014 and ending March 31, 2015 with two twelve-month option periods exercisable by the U.S. Army. If the U.S. Army exercises the two option periods and pays an aggregate of $30.0 million of annual license fees, the U.S. Army will receive a limited non-exclusive right to use Comtech's IP after March 31, 2017 for no additional IP license fee.
The U.S. Army has placed initial funded orders of $12.5 million (including the $10.0 million annual IP license fee for the base period) under these contracts and Comtech expects to receive additional funded orders during the base year. The U.S. Army and Comtech are continuing to negotiate certain terms related to these contract awards.
Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, "We are pleased that Comtech and the U.S. Army will continue to work together to sustain this critical worldwide military communications system. The receipt of these contracts further demonstrates the ongoing importance of the U.S. Army's BFT-1 satellite tracking communication system."
Source: Comtech Telecommunications Corp.
Date: Apr 14, 2014