Pentagon Announces $248M UAV Contract

On Thursday, the U.S. Department of Defense announced the award of a $248 million firm-fixed-price contract for "manufacturing, testing, packaging, marking, storage and shipping services."

The award is to be divided among five contractors: AeroVironment (NASDAQ: AVAV  ) , Elbit Systems (NASDAQ: ESLT  ) , Lockheed Martin (NYSE: LMT  ) , and also privately-held Altavian  and Innovative Automation Technologies, LLC , and is to be completed by December 20, 2017.

 Further details were not provided by DoD. However, all five of the companies named as recipients of the award are involved in the development and manufacture of unmanned aerial vehicles, often referred to as "UAVs." It seems likely, therefore, that the services to be provided relate to the manufacturing, testing, packaging, marking, storage, and shipping of UAVs," suggesting the DoD's description of the contract may be inaccurate. In a statement referring to this contract in its fiscal Q2 2013 conference call, AeroVironment CEO Tim Conver described it as contracts worth "$248 million ceiling value ... for a family of small [UAV  systems, with associated] gimbaled payloads, and associated products and services."

 

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