...a three-year indefinite delivery/indefinite quantity ("IDIQ") contract to provide sustainment support for the U.S. Army's Force XXI Battle Command Brigade and Below - Blue Force Tracking (BFT-1) 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 ("IP").
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, 12-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 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.
Fred Kornberg, President and Chief Executive Officer of Comtech Telecommunications Corp., said, "We are delighted that Comtech and the U.S. Army worked together to sustain critical worldwide military operations and believe the receipt of this contract demonstrates the ongoing importance of the U.S. Army's BFT-1 and MTS satellite tracking communication systems."
Further, Paul Lithgow, President of Comtech Mobile Datacom Corporation, said, "We look forward to continued support of U.S. military forces using the system and we will do all we can to innovate and improve the system to be more efficient and cost effective for the nation."