IRobot Wins $286 Million Army Contract, Replacing Contract Previously Awarded to Robotic FX

12/18/07Follow @bbuderi

In a dramatic turnaround that is sure to send holiday cheer echoing through its halls, Burlington, MA-based iRobot (NASDAQ: IRBT) has won a multi-million-dollar contract to deliver bomb detection robots to U.S. troops; the contract was originally awarded to arch-rival Robotic FX barely two months ago. The company said in an announcement released this morning that its bid of $286 million has now replaced Robotic FX’s initially successful $279.9 million bid.

Today’s announcement—although not unexpected, as news came out over the weekend that Robotic FX’s contract had been canceled—still marks a huge step in iRobot’s struggles against its Illinois-based rival. The original contract—allowing the Army to order up to 3,000 bomb detection robots for troops in the Middle East over the next five years, and including spare parts, training, and repair services—was awarded on September 14, after Robotic FX beat out iRobot in the bidding process. The two companies had both met the military’s technical requirements. But already by that time, iRobot had brought legal action against its competitor, which is run by a former iRobot employee, Jameel Ahed. IRobot contends in two lawsuits filed in August—one in U.S. District Court in Alabama and one now in U.S. District Court in Massachusetts—that the Negotiator robot built by Robotic FX is a knock-off of its own PackBot.

On October 23, presumably at least partially in light of information from the lawsuits, including the revelation that Ahed had destroyed some evidence in the case, Army contracts officer Joanne Byrd revealed her decision to set aside Robotic FX’s contract. In a letter to the Army’s Legal Services Agency, she outlined a series of steps that might then ensue. In the end, if Robotic FX was not found to be a “responsible” government contractor, Byrd said she would “award a contract to the next lowest bidder, iRobot.”

And now, that’s what seems to have happened.

We’ll post soon with more details. In the meantime, here’s the full archive of our coverage of the case, which has all the drama of high-stakes industrial espionage, complete with dumpster diving private detectives and attempts to hide evidence from U.S. Marshals.

Of course, the case is not over. The two parties are due back in Massachusetts court in January, and of course we plan to stay on top of the action.

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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