Comtech Telecommunications Corp. (NASDAQ: CMTL) said that its Maryland-based subsidiary, Comtech Mobile Datacom Corp. has been awarded a three-year contract to continue to provide sustainment support for the US Army´s Force XXI Battle Command Brigade and Below – Blue Force Tracking (BFT-1) program.
In addition, the Army agreed to continue to license certain of Comtech´s intellectual property pursuant to a separate contract.
Under the new three-year BFT-1 sustainment contract, which has a not-to-exceed value of USD38.2m, 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 US Army. The total estimated value of the base year is USD13.6m.
Comtech also entered into a new BFT-1 IP contract with a potential value of USD30.0m which enables the US Army to continue to license certain of Comtech´s IP. The contract requires a USD10.0m 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 US Army. If the US Army exercises the two option periods and pays an aggregate of USD30.0m of annual license fees, the US Army will receive a limited non-exclusive right to use Comtech´s IP after March 31, 2017 for no additional IP license fee.
The US Army has placed initial funded orders of USD12.5m (including the USD10.0m annual IP license fee for the base period) under these contracts and Comtech expects to receive additional funded orders during the base year. The US Army and Comtech are continuing to negotiate certain terms related to these contract awards.
Comtech Telecommunications designs, develops, produces and markets innovative products, systems and services for advanced communications solutions.