Comtech Awarded Undefinitized $80.7 Million Contract to Support the Blue Force Tracking Program
Comtech Telecommunications Corp. (Nasdaq: CMTL) announced today that its Maryland-based subsidiary, Comtech Mobile Datacom Corporation, has been awarded a three-year indefinite delivery/indefinite quantity contract to provide sustainment support for the U.S. Army's Force XXI Battle Command Brigade and Below - Blue Force Tracking program, a battle command real-time situational awareness and control system. Under the terms of this contract, Comtech will provide engineering services, program management and satellite network operations on a cost-plus-fixed-fee basis, and hardware, including options for mobile satellite transceivers, on a firm-fixed-price basis to the U.S. Army. In addition, the U.S. Army has agreed to license Comtech's intellectual property.
The three-year BFT-1 IDIQ sustainment contract has a not-to-exceed value of $80.7 million. The contract's base performance period begins April 1, 2012 and ends March 31, 2013 and provides for two twelve-month option periods exercisable by the U.S. Army. Except for a fixed annual IP license fee, the contract value is subject to finalization and downward negotiation. The payment of annual IP license fees beyond the base year is contingent upon the U.S. Army's exercise of the optional performance periods. The specific terms and conditions related to the IP license are covered by a separate licensing agreement which provides for an initial licensing period that begins April 1, 2012 and ends March 31, 2013 and provides for annual renewals, at the U.S. government's option, for up to a five-year period, after which time the U.S. government will have a limited non-exclusive right to use Comtech's IP for no additional IP licensing fee.
Comtech also announced today the receipt of its first order under the BFT-1 sustainment contract. This $25.6 million undefinitized order has been initially funded in the amounts of $10.0 million for the IP license fee for the base performance period and an initial $7.0 million for engineering services, program management and satellite network operations. Pricing for the engineering services, program management and satellite network operations has not yet been finalized and cannot exceed $15.6 million.
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