Kratos Defense & Security Solutions, Inc. [KTOS] has delivered the first of 45 BQM-177A year one subsonic aerial target systems for the Navy, the company and service announced this week.
The target systems are being delivered under a $37 million first year low-rate initial production (LRIP) contract for aircraft meant to simulate cruise missile targets. Last February, the Navy awarded Kratos a $24 million contract option for year two covering an additional 30 aircraft.
Last week the Naval Air Systems Command posted a presolicitation notice of its intent to purchase an additional 60 BQM-177As for year three. Those aircraft are planned to be delivered starting in the second quarter of FY ’20 through the second quarter of FY ’21.
Steve Fendley, president of Kratos’s Unmanned Aerial Systems division, told Defense Daily in an interview that the BQM-177A is essentially a high performance unmanned aircraft that is a sort of morph between a maneuverable fighter jet and a cruise missile. It is used to replicate cruise missile threats for the Navy.
Fendley said one scenario with the BQM-177A would have it appearing as some particular enemy threat, approaching a Navy asset like a cruise missile in terms of the speed, maneuverability, and altitude.
This allows the U.S. Navy and other customers “to set up a scenario and be able to replicate what an enemy threat would like like to them, allow them to test their personnel and train their personnel in how to defend against that particular threat type.”
Fendley added that in some instances the BQM-177A could help the U.S. test its defensive systems and evolve and develop new defensive systems. In these situations this target aircraft would represent the threat in tests.
He said Kratos expects to produce 80-100 units per year for the foreseeable future going into the next few decades. Fendley underscored the previous systems were produced for 30-50 years, depending on how you consider the clock starting, so the company expects a 20-40 year range.
Fendley also noted the company expects this to become one of the largest programs in the company and a “key element” of their forecasted growth as it reaches full rate production quantities.
Kratos sees the drone bringing in between $50 million and $100 million annually in revenue going forward, he said. That is a “pretty large percentage” of overall corporate revenue and it is huge for the Unmanned Aerial Systems division, he said.
That means that with this program alone, the unmanned aerial systems division will continue to “grow every year for the foreseeable future” and even if Kratos had no other unmanned contracts it would be in a growth mode. “It is substantial for us,” Fendley said.
Fendley noted Kratos has some undisclosed existing international customers for the BQM-177A today. Now that the Navy has formally accepted the first model and is moving towards production units, the company expects “interest to increase substantially.”
After the Navy starts moving forward with the aircraft, U.S. allies and partners are likely to take advantage of the economics of scale and the system’s proven air worthiness, Fendley said. He was unwilling to disclose specific customers beyond saying countries in the Asia-Pacific region.
The aircraft carries several payloads including radio-frequency (RF) simulators to simulate the signature from other threat types, infrared (IR) simulators for the same, tow targets, and countermeasures.
A tow target has the plane deploying a pod-type towed target below and behind it, connected by a cable.
The Navy could then target the much lower cost tow target “and be able to take their shots at that very, very low cost flying body without risking the towing aircraft,” Fendley said.
The BQM-177A can carry countermeasures like manned aircraft that are meant to confuse Navy weapons fired at the cruise missile target.
Fendley explained “that would allow you to test your defenses in a very very challenging environment where you say, ‘Okay, the missile coming in is also able to defend itself, to some extent, which is what our countermeasures would do. But can our military then still be able to stop or prevent that threat?’”
The BQM-177A is an original design, but it shares some similarities with its predecessor, the Northrop Grumman [NOC] BQM-74. Namely, they are both flying body airplanes with an internal jet engine for lower drag and higher speed, small set of wings, and control surfaces.
Fendley said this aircraft has proven a “substantially higher performance” for aerial target systems than the Navy has ever previously operated in terms of speed and maneuverability.
He also highlighted Kratos believes its main advantage in a program like this is its position as a mid-tier defense contractor. This way it operates like a smaller company, acting as a partner with U.S. customers to offer responsive low-cost solutions. This is in contrast with the typical customer-supplier relationship with defense contractors, Fendley said.