CPI Aero Announces $49 M Multi-Year Contract for T-38C Aircraft Modification Kits

CPI Aerostructures, Inc. (CPI Aero®) (NYSE MKT: CVU) has been awarded a $49 million indefinite-delivery/indefinite-quantity contract from the United States Air Force to provide structural modification kits for the T-38C Pacer Classic III (PC III) aircraft structural modification program. The Air Force Life Cycle Management Center, Hill Air Force Base, Utah is the contracting activity for this contract, which is a small business set aside.

The T-38C is a twin engine, two seat, supersonic jet trainer used by Air Education Training Command as an advanced trainer in Specialized Undergraduate Pilot Training. As per the terms of the contract, CPI Aero will provide structural modifications kits as part of a modification program designed to enhance operational capability while improving flight safety, reliability, and maintainability. PC III will replace vital, fatigue sensitive structural items including the following: steel dorsal longerons, cockpit longerons, and the upper/lower center longerons. In addition, associated bulkheads/formers, skins, and floors will be included in this remove and replace effort.

CPI Aero will support the T-38C PC III aircraft structural modification program during Phase II. Requirements for Phase I are being fulfilled by Northrop Grumman Technical Services (up to 51 kits) while requirements for Phase II (the remaining 74 kits) will be fulfilled by CPI Aero. CPI Aero will provide the necessary integration of kits, program management, logistics, discrepancy reporting/resolution, and sub-contract management. The Period of Performance and Ordering Period for Phase II commences immediately and will span five years, with an anticipated delivery period of six years, ending in February 2021.

Douglas McCrosson, President and CEO of CPI Aero, stated, "This new military contract comes on the heels of our $53.5 million F-16 Wing components contract announced just three months ago, and re-establishes CPI Aero as a leading prime contractor of aircraft structural components and kits to the US Government. Our recent F-16 contract and this new T-38 contract are the two largest military programs received directly from the US Government in more than a decade and in the aggregate add over a $100 million to our total backlog."

Mr. McCrosson added, "This new contract recognizes our excellent past performance as a prime contractor on the T-38 platform dating back to 2001 and is a validation of our strategy to create a revenue stream from our investment in creating world class engineering, supply chain management and program management capabilities. Additionally, we will require support from and will work closely with Northrop Grumman, a cooperation which will further strengthen our already excellent relationship with this important customer."

Source: CPI Aerostructures, Inc.
Date: Feb 25, 2015