This Army Contract Is AeroVironment's to Lose

By Markets Fool.com


AeroVironment's Nano Hummingbird -- named one of Time magazine's "50 Best Inventions of 2011." Image source: AeroVironment.

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The U.S. Army wants a new drone. And not a bigger drone -- but smaller.

Thousands of drones are already in service throughout the Army, from medium-altitude, long-endurance warbots such as General Atomics' Grey Eagle, to shorter-range tactical UAVs like Textron'sShadow -- and all the way down to platoon-level platforms such as AeroVironment's RQ-11B Raven -- too small to carry a missile, but still the most widely used drone in the world.

And that's fine so far as it goes. But what if you're a soldier caught in a tight spot, maybe all alone and lost in the streets of Mogadishu, and want to know what awaits you farther down the block?

That's one small hole in military drone coverage that the Army would like to plug.

Calling all dronemakers
Earlier this month, the Army's Program Executive Office-Soldier issued a new Request For Proposals to plug that gap, seeking ideas from corporate America on how to outfit individual soldiers with small, personal-use drones dubbed "Soldier Borne Sensors." According to the RFP, the Army is looking for an all-inclusive drone system that does the following:

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  • Fits "all necessary hardware, software, radio equipment, batteries" into a single "tactical carrying pouch."
  • Features a drone weighing less than 6 ounces.
  • Weighs less than 3 pounds, including all equipment.
  • Can see in the dark as well as the daytime and transmit video and telemetry data back to its user "in near real time."
  • Can fly in the rain and endure wind gusts up to 17 mph.
  • Has an operating range out to half a kilometer and the ability to fly 15 minutes before recharging.

And that's only the first half of the Army's wish list.

Sounds like a pretty tall order, right? But here's the thing: AeroVironment -- the same company that already makes the Army's ubiquitous Raven UAV -- already has a UAV that fulfills many of these requirements.

AeroVironment's tiny "Nano Hummingbird," first developed for the Pentagon's Defense Advanced Research Projects Agency more than five years ago, can hover in wind gusts of 5 mph, and has an endurance of eight minutes. Hummingbird is exceptionally small, with a wingspan of just six inches, and a weight similar to that of a AA battery -- less than an ounce. Stick another battery in there, and I'll bet Hummingbird can do 15 minutes, easy.

All of which is to say that, if the Army is flexible on its requirements for its new soldier-sized drone, AeroVironment probably has a product ready to go to war today. And if the Army is not flexible, then AV can scale up Hummingbird to whatever size the Army wants, and probably pretty quickly, too.

What does it mean to investors?
The Army will be holding an "Industry Day" on April 12, at which companies will be invited to submit their ideas for its hoped-for new drone. I fully expect AeroVironment to participate in the event, and it would not surprise me in the least to see AeroVironment win.

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The article This Army Contract Is AeroVironment's to Lose originally appeared on Fool.com.

Fool contributorRich Smithdoes not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 278 out of more than 75,000 rated members.The Motley Fool recommends AeroVironment. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.