What's going on, can anyone say anything about it?
AeroVironment faces GAO protests over Army contract.
AeroVironment Inc (NASDAQ: AVAV ), a manufacturer of unmanned aircraft systems, is facing a protest over a major contract from the U.S. Department of Defense.
The protest, filed with the U.S. Government Accountability Office (GAO), challenges the Army's decision to award AeroVironment an indefinite-delivery, indefinite-quantity contract with a ceiling value of $990 million for its switchblade systems as a sole-source supplier.
The contract in question was awarded on August 27, 2024, and the GAO's protest resulted in a stop work order issued by the U.S. Army. This stop work order is specific to the disputed contract and does not affect any other AeroVironment contracts or obligations, including those related to loitering munitions systems.
The GAO is expected to issue a decision on the protest by December 16, 2024. Until then, work related to the Switchblade systems contract will remain suspended. The Switchblade is a tactical missile system designed for use by armed forces and is a key product in AeroVironment's portfolio.
AeroVironment reported a strong first quarter for fiscal year 2025 and set a new revenue record of $189.5 million, a 24% increase over the same period last year. This growth was primarily due to the company's Loitering Munition Systems segment, which reported a 68% increase in revenue.
Despite a decline in sales compared to the first quarter of the previous year, the defense contractor was able to secure a significant IDIQ (Indefinite Delivery, Indefinite Quantity) contract worth USD 1 billion with the US Army.
