CPI Aero vows defense of challenged $53.5M F-16 contract

Aerospace contractor CPI Aerostructures Inc. will file documents with the Small Business Administration by the close of business Dec. 3 to defend its eligibility for a five-year, $53.5 million F-16 contract, executives said Monday.

Speaking at an investor and analyst presentation at the New York Stock Exchange, chief executive Douglas McCrosson said the contract, a small-business set-aside, was "not lost" and "not terminated." CPI Aero announced the contract earlier this month.

An unnamed competitor challenged the designation of CPI as a small business. The head count threshold for the contract is 1,000, McCrosson said. That's far higher than the roughly 300 jobs at the Edgewood company, but executives must establish that there are no related companies with common ownership whose employee total when combined would exceed the limit.

McCrosson said the F-16 contract, under which CPI Aero would manage the supply chain for structural wing parts as a prime contractor to the Defense Logistics Agency's aviation unit in Richmond, Virginia, was expected to account for 1 percent to 1.5 percent of 2015 revenue.

In another part of the presentation, Clint Allnach, director of manufacturing operations, said the company is embarking on a plan to automate operations at the plant, where manufacturing is largely done by employees with power tools.

An automated drilling and riveting machine is scheduled to go online in January. Installation of business analytics software has an estimated completion time of the fourth quarter 2015. Other initiatives under study include robotic drilling, sanding and painting and 3-D printing for simple tools like jigs.

At the same time Allnach said that the company would weigh its expenditures against efficiency gains and the marketing advantage gained in seeking contracts from top-tier manufacturers. CPI Aero won't take "any moon shots," he said. Shares of CPI Aero rose 16 cents to close at $11.88 Monday. They are down 21 percent since Jan. 2.

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.