DynCorp International Inc. secured a big win at the end of last month, announcing Wednesday the U.S. Army named the McLean-based company on a potential six-year, $795.3 million contract to provide aircraft maintenance services.
Under the contract, DynCorp will perform support services for government-owned fleets of transport aircraft, including the C-12, the C-26, the UC-35, as well as some some limited work with the T-6. The contract was first announced by the Pentagon on May 31. However, the Pentagon only announced $124.5 million for the first year of the contract lasting until May 31, 2018.
DynCorp’s announcement said that this contract includes a one-year base period — comprised of a three-month transition from the previous contractor on the program to nine months of production — along with five single-year option periods. The total contract is valued at up to $795.3 million if all of the options are exercised.
DynCorp first won the contract to service these particular aircraft in August 2000. However, in 2010 when the program was re-competed, the company lost the work to L3 Technologies Inc. (NYSE: LLL).
This is a welcome victory for the global logistics contractor, which since 2012 has seen itself shrink from $4 billion in total revenue to below $2 billion. DynCorp suffered as the U.S. drew down troops in Afghanistan and Iraq, as much of the company’s business was derived from providing logistics services to soldiers in-theater.
This win comes just weeks after New York-based bond analyst firm Moody’s Investors Service Inc. upgraded the company’s debt— a rare vote of confidence from analysts that just a year before raised the specter of a possible default.
In its report upgrading the company’s debt, Moody’s explained the optimism stemmed from the company “achieving solid contract execution scores from customers and a good degree of contract re-compete success of late.”
James Bach covers federal contracting.