Kratos Unmanned Aerial Systems, Inc.

Kratos Unmanned Aerial Systems, Inc. (Unmanned Systems Division), a subsidiary of publicly traded Kratos Defense & Security Solutions, Inc., manufactures unmanned aerial target systems, subscale aerial drones, and associated ground support equipment and sustainment services for the Department of Defense as a prime contractor competing full-and-open across defense agencies, with no SBA set-asides in its recent award footprint.

Kratos USD operates from Sacramento, California and holds a dominant position in the subscale aerial target procurement and sustainment market, anchored by two cornerstone Air Force contracts: a $374 million single-award Indefinite Delivery Contract for Air Force Subscale Aerial Target (AFSAT) systems running through December 2027 (105 task orders, $47.11 billion combined potential value across the AFLCMC Eglin customer), and a $400 million multiple-award Advanced Aerospace Systems Technology Research (AASTR) IDIQ. The subsidiary also holds a $42.31 million single-award Basic Ordering Agreement with Naval Air Systems Command for BQM-177A Subsonic Aerial Target production, sustainment, and repair services (25 task orders, $971 thousand combined potential value), a $14.7 million single-award IDC for BQM-177A software engineering support, a $95 million single-award Army indefinite-delivery contract for target systems and spares under the Advanced Subscale Aerial Program, a $13.3 million single-award Naval Air Systems Command IDC for BQM-177A evaluation and repair services (awarded March 18, 2026), and a $46 billion multiple-award Eglin Wide Agile Acquisition Contract (EWAAC) position. Representative prime work includes a $78.9 million firm fixed-price delivery order from the Air Force for manufacture, integration, testing and delivery of BQM-167A aerial targets through January 2027 under the AFSAT parent; a $238.8 million firm fixed-price definitive contract from Naval Air Systems Command for BQM-177A full-rate production through August 2028 (awarded January 31, 2023); a $57.5 million delivery order for Lot 21 AFSAT BQM-167A targets with storage through March 2028 (February 2025); a $49 million cost-plus-fixed-fee Off Board Sensing Station Flight Demonstration contract with the Air Force for autonomy and manned-unmanned combat teaming capabilities (October 2021); a $20.25 million cost-plus-fixed-fee delivery order for MQM-178 FIREJET engine development under the Advanced Subscale Aerial Platform program (September 2023); a $19.1 million cost-plus-fixed-fee definitive contract with Naval Air Systems Command for BQM-177A contractor logistics support and engineering services through December 2029 (awarded December 9, 2024); a $3.73 million cost-plus-fixed-fee Low Cost Agile Manufactured Systems (LCAMS) definitive contract with the Air Force under the PACER Broad Agency Announcement for high-speed systems technology development (April 14, 2026). Recent activity shows thirteen awards in 2025 (through April 14, 2026) and six awards in 2026 to date, though the source captures only the first four months of calendar year 2026; twenty-five awards (combined potential value $326.6 million) face ultimate completion within the next twenty-four months, creating a recompete exposure cliff.

The top five funding customers account for 69% of recent awards and essentially all dollar value. The Air Force Materiel Command Lifecycle Management Center at Eglin Air Force Base dominates both volume and potential value (105 awards, $47.11 billion), driven by the AFSAT contract. Naval Air Systems Command ranks second in award count (55 awards, $660.5 million), reflecting sustained BQM-177A procurement and sustainment. The Department of the Army's PEO Simulation, Training and Instrumentation and the Army Acquisition Support Center together carry 29 awards ($179.2 million) for advanced subscale aerial platform work. The broader Department of the Navy and Department of the Air Force headquarters round out the active set. The concentration reflects Kratos USD's tight specialization: top NAICS codes center on Aircraft Manufacturing (93 awards), Other Aircraft Parts and Auxiliary Equipment Manufacturing (85 awards), and Other Support Activities for Air Transportation (35 awards); top PSC codes align on Airframe Structural Components (86 awards), Unmanned Aircraft (42 awards), and Guided Missile Components (33 awards).

Kratos USD competes predominantly as a prime (94% of awards) and does not rely on subcontractors to deliver core work—SCI-reported data from FY2023–FY2024 shows zero sub-hours share across prime service contracts. However, manufacturing task orders carry extensive subcontractor networks to meet design and component requirements. On the $78.9 million BQM-167A manufacturing delivery order (June 2024), Kratos engaged 28 named subcontractors including Micro Systems, Inc. (Kratos subsidiary for navigation and guidance systems), Champion Aerospace LLC (aircraft engine parts), Safran Power Units Dallas, Inc. (turbine components), Northrop Grumman Systems Corporation (aircraft structures), Airborne Systems North America (parachute systems), and Extant Aerospace, Westfield Hydraulics, and other specialized suppliers for electronic components, fuel systems, flow measurement, and electroplating. On the $238.8 million BQM-177A full-rate production contract with NAVAIR (January 2023), subcontractors included Champion Aerospace, Space Vector LLC, Safran Power Units Dallas, Micro Systems (Kratos subsidiary), Weldon Pump LLC, and Airborne Systems North America. A $2.97 million radar altimeter delivery order to NAVAIR (August 2025) includes a subcontract to Vast Manufacturing, Inc., a woman-owned small business and HUBZone-certified firm, for electronic component manufacturing. On the Off Board Sensing Station Flight Demonstration contract (October 2021), Kratos partnered with Taylor Devices Inc., Williams International Co. LLC, and Technical Directions, Inc. (Kratos subsidiary) for components and engineering. The subcontractor footprint spans aerospace component manufacturers, software engineering firms (Tapestry Solutions, Oracle America), and specialized suppliers; Kratos serves as the systems integrator and prime contractor across all primary work.

SCI-reported federal service-contract activity (covering only service contracts above $150,000 threshold) shows $3.3 million invoiced across 9.6 FTEs in FY2023 and $14.9 million across 42.1 FTEs in FY2024, reflecting two SCI-reportable prime contracts. Government-paid hourly rates on SCI-reported service work ran median $167.71/hr (10th percentile $165.63/hr, 90th percentile $169.78/hr), positioning the vendor in the low-to-mid federal services labor market. SCI data represents a narrow slice of Kratos USD's federal portfolio—the vendor's footprint is dominated by goods procurement (unmanned aerial systems, spares, ground support equipment) and manufacturing task orders that fall outside SCI reporting scope.

Kratos USD remains headquartered at its parent Kratos Defense & Security Solutions, Inc. in San Diego, California, but operates manufacturing, engineering, and support facilities in Sacramento (primary); Panama City and Okaloosa Island, Florida; Orogrande and Oro Grande, California; and secondary locations at Naval Air Station Point Mugu and Patuxent River. The parent company is a publicly traded defense contractor with a broader portfolio spanning communications, satellite systems, and training solutions; the Unmanned Systems Division specializes narrowly in aerial target systems and unmanned platform development and sustainment.