AeroVironment announced on March 3 2026 that it is in active negotiations with the U.S. Space Force to amend the Satellite Communications Augmentation Resource (SCAR) program contract. The company confirmed that the ground‑station contract was temporarily paused under a stop‑work order issued on January 16 2026, allowing both parties to transition to a firm‑fixed‑price agreement.
While a $1.4 billion contract was awarded to BlueHalo in 2022 for SCAR modernization, the specific value of AeroVironment’s current amendment negotiations has not been disclosed. The SCAR program represents a significant portion of the company’s backlog, and the recent reopening of competition introduces uncertainty over future revenue conversion.
AeroVironment is investing $30 million to expand manufacturing capacity in Albuquerque, New Mexico, with state and city incentives. The expansion supports its Space and Directed Energy platforms, including the SCAR ground‑station work, and signals the company’s commitment to scaling production to meet potential contract volumes.
The pause and renegotiation of the SCAR contract, coupled with the possibility of a rebid, heighten risk for the company’s revenue stream. Analysts note that the SCAR program’s reopening could erode the $1.4 billion value that was previously secured, affecting the company’s backlog and margin profile. Conversely, the firm‑fixed‑price structure could improve cost predictability and protect margins if the contract is ultimately awarded.
CEO Wahid Nawabi stated, "We remain in active negotiations with the U.S. Space Force regarding AV’s contract to deliver ground stations to support the SCAR program." He added that the company appreciates the temporary pause while both parties work toward a firm‑fixed‑price agreement that offers a commercialized product solution with an expedited delivery timeline.
The announcement followed a sharp decline in AeroVironment’s share price earlier in the week, reflecting market concerns over the SCAR program’s potential recompeting. The company’s proactive communication and investment in manufacturing capacity are viewed as efforts to mitigate revenue loss and demonstrate execution capability.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.