Comtech Telecommunications Corp. (Nasdaq:CMTL) announced today that its Maryland-based subsidiary, Comtech Mobile Datacom Corporation received notice that the U.S. Army exercised Option Year 1 of the Company’s three-year Blue-Force Tracking (“BFT-1”) sustainment contract and related BFT-1 Intellectual Property license agreement and that it has been awarded initial funding totaling $19.8 million to continue to provide sustainment support for the U.S. Army's Force XXI Battle Command Brigade and Below - BFT-1 program, a battle command real-time situational awareness and control system.
The $19.8 million in funding for Option Year 1 includes $10.0 million for the U.S. Army to continue to license certain of the Company’s BFT-1 intellectual property, with the remaining funding designated for engineering services and satellite network operations for which Comtech is paid on a cost-plus-fixed-fee basis and program management services for which Comtech is paid on a firm-fixed-price basis. The Option Year 1 performance period began April 1, 2015 and ends March 31, 2016. The Company expects to receive additional funded orders for Option Year 1.
The Company’s three-year BFT-1 sustainment contract and related BFT-1 Intellectual Property license agreement, both of which were first awarded in April 2014, now have a combined not-to-exceed value of $68.5 million. Total funding received to-date for both contracts approximates $43.4 million. Both contracts provide for one remaining twelve-month option period exercisable by the U.S. Army. If the U.S. Army exercises Option Year 2 of the Intellectual Property license agreement for $10.0 million, which covers the period April 1, 2016 through March 31, 2017, the U.S. Army will receive a limited non-exclusive right to use certain of Comtech's intellectual property after March 31, 2017 for no additional intellectual property license fee.
Dr. Stanton Sloane, 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 6, 2015