CPI Aero's $53.5M contract may be derailed by protest

A competitor's protest threatens to derail a $53.5 million F-16 fighter jet logistics contract announced earlier this week by CPI Aerostructures Inc., the Edgewood aerospace contractor disclosed Friday.

The Defense Logistics Agency issued a stop-work order to CPI Aero as the U.S. Small Business Administration conducts a review of the company's size in determining its eligibility for the contract.

A company spokeswoman said the SBA's formula for determining what company qualifies as a small business is complex and varies by industry.

In a news release issued after Friday's market close, CPI Aero, which has about 300 workers, said it was preparing its response to the SBA.

Shares of CPI Aero closed up more than 3 percent Friday to $11.75.

Under the contract, CPI Aero would manage the supply chain for F-16 structural wing parts as a prime contractor to the Defense Logistics Agency's aviation unit in Richmond, Virginia.

When the deal was announced, CEO Douglas McCrosson said it was the largest the company had received from the U.S. government in more than 10 years.

In August, CPI Aero took a $44.7 million one-time noncash charge related to the Defense Department's plan to retire the A-10 attack jet, known as the Warthog.

CPI Aero makes parts and assemblies for a variety of military and civilian aircraft, including the E-2D Advanced Hawkeye surveillance aircraft, the UH-60 Black Hawk helicopter and the Embraer Phenom 300 business jet.

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.