NAVAIR Awards Kratos Sole Source $49.6M Initial Contract for FRP of the BQM-177A Subsonic Aerial Target System

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a leading National Security Solutions provider and industry-leading provider of high-performance, jet-powered unmanned aerial systems, announced today that Kratos has received a $49,568,200 Full Rate Production (FRP) contract for Lot 4 of the BQM-177A Subsonic Aerial Target (SSAT) from the U.S. Navy for the procurement of an additional 55 aircraft, mission kits, certain flight consumables, and technical data.

Steve Fendley, President of Kratos Unmanned Systems Division, said, “Since becoming an aerial target system provider in the early 2000s, Kratos has produced and delivered well over 1,000 high performance jet target aircraft across our family of systems and customers. For the U.S. Navy, following the first full-rate production award in October 2020, the combined Navy-Kratos team has completed activation of all four operational sites around the globe; delivered an additional 77 BQM-177A SSAT Air Vehicles; and declared full operational capability. To have achieved all of this during the pandemic – with unprecedented labor and supply chain disruptions and a very unusual economic environment – is nothing short of remarkable. Today’s announcement marks the next step in our continuing efforts to provide world class training capabilities to the U.S. Navy and its allied and coalition partners for the next several decades and beyond. I couldn’t be more proud of this team and its exceptional achievements. We are laser-focused on the customer mission capability and these incredibly high-performance-to-cost-ratio systems that deliver key, threat representative capabilities to support the Navy’s ever increasing (quantity, technical, performance) training and test needs.”

Don Blottenberger, Program Manager for the Navy’s Aerial Targets program office (PMA-208), said, “The BQM-177 is quickly becoming a workhorse of the Navy targets inventory. Target presentations have never been more important than they are right now based on real world events and new capabilities under development. It provides reliable presentations of evolving missile and aircraft threats to test our developmental weapon systems and provide training to our deploying sailors preparing to go into harm’s way. The hard work of the team — one team across Kratos and the Navy Aerial Targets office — will provide cost effective, quality target presentations through the next decade.”

The work under this contract will be primarily conducted in Kratos’ facilities in Sacramento, CA, and Ft. Walton Beach, FL. Total contract value if the options for Lots 5, 6, and 7 are all exercised at the maximum production quantities is $227,647,890.