By: Wayne Heilman, The Gazette, March 8, 2017-Vectrus Inc. announced Wednesday that the Department of Defense has canceled bidding on its largest contract, citing “substantial” changes in mission requirements that will require a new bidding process that could keep the Colorado Springs-based company on the current contract longer.
Vectrus has held the Kuwait Base Operations and Security Support Services 2.0 contract since 2010 but the agreement expires March 28. The Army had started the process of seeking new bids on the contract after Vectrus protested the Sept. 30 award of the contract to Houston-based KBR-Triple Canopy. Vectrus told stockholders earlier this month that the rebidding process likely would require that the current contract – which generated 37 percent, or $438 million, or the company’s revenue last year – be extended from March to late this year.
“We recognize the Government’s concerns and look forward to a new solicitation,” Vectrus CEO Chuck Prow said Wednesday in a news release.
Matt Klein, the company’s chief financial officer, said Vectrus will not change its financial forecast for this year until it receives “additional contracting direction on the existing contract.” The forecast calls for revenue to drop by up to 23.6 percent and profits to decline by up to 28.1 percent.
The news of the delayed rebidding pushed Vectrus shares higher. The company’s stock rose 70 cents, or 3.2 percent, to $22.81 in trading Wednesday on the New York Stock Exchange.
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