Electronics Production | September 19, 2019
Orbit International’s Power Group receives final follow-on order for CAATS
Electronics manufacturer Orbit International says that its Power Group (OPG), through its Behlman Electronics, Inc. subsidiary, has been awarded a follow-on purchase order in excess of USD 2,000,000 for the production and delivery of 11 Common Aircraft Armament Test Sets (CAATS) for the U.S. Navy.
Deliveries under this purchase order are expected in the fourth quarter of 2020. This follow-on award is the fourth and final production order received under a USD 21,709,300 fixed price indefinite delivery/indefinite quantity (IDIQ) contract received by the Company in September 2017. Mitchell Binder, President and CEO of Orbit International commented, “The IDIQ contract, the largest ever received by our Power Group, was received in September 2017 as a small business set aside naming Behlman as prime contractor. This follow-on award completes the production awards under the IDIQ contract. As previously stated, the shipment and delivery of these units require many aspects of production and testing to be offloaded to subcontractors and, as a result, our gross margins for the contract and this award are considerably lower than our historical margins. However, no additional engineering, selling and administrative personnel are needed; therefore, this award should have a positive impact on profitability during the delivery period.” The company's OPG is currently bidding for additional CAATS power supplies in its original role as a subcontractor to the original prime contractor on this program. "If awarded, although our sales levels will be lower as a subcontractor than as a prime contractor, we will be return to the higher margins that we typically realize on our other production work. This follow-on award is a firm addition to our backlog and forms a solid foundation of business for our Power Group through the end of 2020. In addition to this award, our OPG is continuing to expand its bid pipeline utilizing its VPX technology. Bookings for VPX power supplies through the end of August 2019 were approximately 31% higher than at the end of the comparable period and we expect bookings for this product line to continue to grow through the end of the year,” Binder continues.