PARIS — Comtech Telecommunications Corp., still smarting over the loss of a major U.S. Army contract for satellite-based tracking for which it was the incumbent supplier and expected winner, warned that a similar threat hangs over its bid for the Army’s next-generation satellite messaging contract.

Comtech Chief Executive Fred Kornberg’s comments during a Sept. 24 conference call suggested that the company remains perplexed at how ViaSat Inc. can make a profit on the Blue Force Tracking-2 (BFT-2) contract to provide satellite bandwidth, satellite terminals and other ground gear. Kornberg said ViaSat’s winning bid, at 50 percent lower than Comtech’s $500 million proposal, is difficult to understand.

Even so, he said, Comtech, after talking with the Army’s BFT-2 program managers, has decided not to protest the award, which was announced in July. Instead, Comtech will position itself to step in if ViaSat trips up in the program’s deployment.

“There’s not much you can do when someone underbids you by 50 percent,” Kornberg said, adding that Comtech would not have changed its own bid substantially even if it had known of ViaSat’s price. “We don’t think the contract would have been profitable at a 50 percent lower |price. … Should [ViaSat] stumble, we will be in a position to supply our backward-compatible BFT-2 transceivers into the network that is already in place today and uses our Comtech BFT-1 transceivers.”

Melville, N.Y.-based Comtech is providing BFT-1 equipment and service under a contract whose potential value is $384 million. For the 12 months ending July 30, the company booked $53.6 million in BFT-1 revenue and expects to receive a similar amount in its current fiscal year.

Kornberg said he is optimistic that despite the loss, Comtech expects BFT-1 orders to continue for some time. How long will depend in part on how fast ViaSat is able to deliver its BFT-2 system. In any event, Kornberg said, the Army will want to have a possibly extended period in which the two generations of gear are used at the same time. Comtech has delivered around 100,000 BFT-1 terminals and expects work on the contract to continue for three to five years despite the ViaSat win.

The loss of the BFT-2 contract caused Comtech stock to plummet, which in turn caused electronics manufacturer CPI International of Palo Alto, Calif., to reject a proposed acquisition by Comtech, which had been planned as a half-cash, half-stock transaction. Even after Comtech agreed to replace its now less-valuable stock with cash, CPI refused to conclude the agreement and has agreed to pay Comtech a termination fee of $15 million.

Longer term, Comtech is concerned that the BFT-2 loss may be a harbinger of things to come with respect to the U.S. Army’s Movement Tracking System (MTS), which uses L-band satellite signals to track mobile assets and permits short messages. As was the case for BFT-2, Comtech is the incumbent supplier for the current generation of MTS hardware and booked nearly $370 million in MTS revenue in the fiscal year ending July 30.

The worry for Comtech is that the Army has indicated it may want to merge BFT-2 and the planned MTS-3 networks into a single system based on commercial technologies that are retrofitted for military use. The proposed Joint Battle Command Platform would unify the currently separate systems for tracking and battlefield situational awareness.

“We know there is concern that Comtech may not win the MTS-3 competition based on the BFT-2 outcome,” Kornberg said. But he said the process of militarizing commercial transceivers likely will take time, no matter who wins the contract. That being the case, he said, Comtech’s current MTS contract is likely to be extended no matter what the Army decides on the next-generation system.

Kornberg said Comtech remains confident that “we can retain this [MTS] program. However, should we again experience a low-ball bid proposal, we again could be surprised.”

Kornberg used the phrase “low-balling” twice, but it was not clear that he meant it in its usual sense, which implies a bid that is purposely unprofitable. Later in the call, he said of ViaSat: “If they can actually meet those numbers and do the job, more power to them. They know something more than we do.”

With its CPI acquisition now off the table, Comtech is ready to seek alternative acquisitions and expects to make at least one in the coming 12 months, Kornberg and Comtech Chief Financial Officer Michael Porcelain said during the conference call. The company had $607 million in cash as of July 30.

To assuage the near-term concerns of investors, Comtech’s board has agreed to purchase $100 million of the company’s stock and to increase the shareholder dividend.

While BFT and MTS are two of the company’s biggest programs, Kornberg said Comtech stands to reap the benefits of its investment in Ka-band satellite amplifiers and other Ka-band equipment as that radio frequency becomes popular for its ability to provide broadband links. Comtech is eyeing in particular a Ka-band opportunity in Australia, whose government is embarked on a huge broad-|band-rollout program that includes satellite and terrestrial components. Comtech is providing Ka-band gear for Hughes Network Systems’ Jupiter Ka-band satellite, and is also working with ViaSat on ViaSat’s consumer broadband satellite system.

Porcelain said Comtech’s microsatellite division, Comtech AeroAstro of Ashburn, Va., is profitable and its prospects have improved substantially since it was purchased in 2008. Comtech AeroAstro is building the platform for the U.S. Naval Research Laboratory’s Joint Milli-Arcsecond Pathfinder Survey mission to update a catalogue of star positions for military and civilian use under a $37.9 million contract.

Peter B. de Selding was the Paris bureau chief for SpaceNews.