Vectrus gets $521.6M contract extension

Vectrus has received a much-needed extension on the Kuwait Base Operations and Security Support Services contract that represented at least one-third of the company’s sales last year.

The Army announced a one-year, $521.6 million contract modification to Vectrus on K-BOSSS for continued logistics and facility services in Kuwait through March 28, 2018.

That modification also includes a potential nine-month option that would extend work to December 28, 2018 and another three-month option through March 28, 2019.

The successor K-BOSSS 2.0 contract worth up to $827.2 million over five-and-a-half years was initially awarded to a KBR-Triple Canopy joint venture in September 2016 but the Army decided two months later to seek revised proposals for the contract.

Earlier this month, the Army called off the solicitation due to a change in mission requirements.

Deltek expects the Army to release a solicitation for the successor K-BOSSS 2.0 contract in August of this year with an award projected for February 2018.

K-BOSSS represented 37 percent of the company’s $1.19 million in revenue last year. With the new modification, Vectrus said in a regulatory filing Friday it plans to update financial guidance that currently projects $910 million-$1.01 billion in sales for this year.

The K-BOSSS extension comes as Vectrus is transitioning out of its second-largest contract, which will end this month. The Army Pre-Positioned Stocks-5 contract represented 15 percent of the company’s $1.19 billion in revenue last year.

The Army awarded the contract to an AECOM business unit in August and Vectrus had its protest of the award denied by GAO in December 2016.

In the midst of the APS-5 and K-BOSSS 2.0 losses, former Vectrus CEO Ken Hunzeker retired from the company in December after six years at the helm and was succeeded by former IBM government leader Chuck Prow.

Shares in Vectrus have traded nearly 33 percent lower since the APS-5 award and that stretch includes a sharp 45 percent plunge Sept. 30, 2016, after the K-BOSSS 2.0 award to KBR.