By Sam Boughedda
BigBear.ai (NYSE:BBAI) shares skyrocketed over 300% Thursday after it revealed it has secured a 10-year multiple award $900 million Indefinite Delivery/Indefinite Quantity (IDIQ) contract by the U.S. Air Force.
The contract allows BigBear.ai to compete for task orders delivering capabilities, systems, and synthetic environments to the Air Force as a prime contractor.
In addition, the contract means BigBear.ai can compete for task orders supporting the research and development of new technologies, the creation of rapid prototypes, capability testing, and solution implementation.
"This contract will allow us to continue our long-term partnership with the U.S. Air Force and support as a prime contractor in future opportunities," said Tony Barrett, President and General Manager of Federal Markets at BigBear.ai.
However, according to William Blair analysts, there were 92 other awardees for the contract, which BigBear.ai must compete against for the orders that have a $900M ceiling value.
"The contract announcement indicates that merely $1,000 has been awarded to each of the 93 vendors on the contract vehicle," clarified the analysts. "Since there are 93 vendors competing, there is a risk that BigBear does not win any orders associated with the contract."
The work on awarded task orders is expected to be completed by 2032.
The analysts added that the contract also means there is a risk that not all of the $900M is ever awarded over the duration of the performance period.