AI & Drones: $172M Deal to Remake US Naval Warfighting Readiness

MCLEAN, VA – February 10, 2026 – AMERICAN SYSTEMS, a Virginia-based defense contractor, has secured a major $172.7 million follow-on contract to help the U.S. Navy and Marine Corps rapidly evaluate and deploy next-generation warfighting technologies. The agreement continues the company's support for the Naval Surface Warfare Center Indian Head Division’s elite Demonstration and Assessment Team (DAT), a unit focused on bridging the gap between cutting-edge concepts and combat-ready capabilities.

The multi-year contract, which includes a one-year base period and four one-year options, positions the employee-owned firm as the prime contractor leading a team of operational test and cybersecurity experts. This award not only signifies the Navy’s deep-seated confidence in AMERICAN SYSTEMS' past performance but also highlights a strategic imperative: to accelerate the delivery of advanced tools like unmanned systems, artificial intelligence, and sophisticated sensors directly to the warfighter.

The New Frontier of Naval Assessment

At the heart of this contract lies the critical mission of the Demonstration and Assessment Team. This specialized group is tasked with moving promising technologies out of the laboratory and into realistic, operational environments. Instead of traditional, lengthy acquisition cycles, the DAT focuses on rapid, data-driven evaluations that provide naval leadership with timely insights on a new capability’s real-world utility, integration risks, and long-term sustainability.

Under the expanded contract, AMERICAN SYSTEMS will orchestrate complex field events that unite engineers, scientists, and the sailors and Marines who will ultimately use the technology. These demonstrations simulate the high-stakes conditions of modern maritime conflict, allowing for a thorough assessment of emerging systems. This hands-on approach is vital for technologies like advanced unmanned underwater vehicles (UUVs) and autonomous surface vessels, which are seen as essential force multipliers, particularly for operations across the vast expanses of the Indo-Pacific. By testing these systems in live, virtual, and constructive (LVC) environments, the team can analyze performance against a spectrum of potential threats and scenarios, ensuring that only the most effective and reliable solutions are advanced.

"This milestone reflects the trust our Navy partners place in AMERICAN SYSTEMS and the exceptional work of our team," said John Steckel, president and CEO of AMERICAN SYSTEMS, in a statement. "By integrating advanced data analytics and artificial intelligence into our proven test and evaluation processes, we help our customers move promising capabilities from concept to the fleet faster and with greater confidence."

AI and Autonomy at the Helm

A key feature of this renewed partnership is the explicit focus on leveraging artificial intelligence, including Large Language Models (LLMs) and Generative AI. While the Department of the Navy has urged caution regarding commercial AI tools due to security concerns and the risk of generating inaccurate information, or "hallucinations," the controlled application of these technologies in defense is accelerating.

AMERICAN SYSTEMS will apply these AI tools to streamline the assessment process itself. LLMs can rapidly analyze and summarize vast quantities of test data, helping to generate clear, defensible reports for decision-makers on compressed timelines. In wargaming and mission planning simulations, Generative AI can model adversary reactions and generate novel courses of action, providing a more dynamic and challenging training environment. This integration of AI is not merely about automation; it's about augmenting the cognitive abilities of military planners and analysts, allowing them to make better-informed decisions faster.

This effort aligns with a broader push across the Department of Defense to harness AI for a decisive strategic advantage. The contract's focus on testing and validating AI-enabled mission systems ensures that the Navy can adopt these powerful tools responsibly, with a full understanding of both their potential and their limitations.

Securing the Digital Battlefield

In an era where cyber warfare is a constant threat, the integration of new technology is inseparable from robust cybersecurity. The contract underscores AMERICAN SYSTEMS' role in applying its expertise in Cybersecurity and DevSecOps—a methodology that embeds security practices throughout the entire development lifecycle. This "shift-left" approach ensures that vulnerabilities are addressed from the initial design phase, rather than being patched as an afterthought.

The company's recent achievement of the Department of Defense’s Cybersecurity Maturity Model Certification (CMMC) Level 2 further solidifies its credentials in this critical domain. This certification, based on stringent standards from the National Institute of Standards and Technology (NIST), is becoming a prerequisite for handling sensitive defense information. By embedding these rigorous security protocols, the work performed under the DAT contract will help ensure that new unmanned systems, sensors, and AI algorithms are resilient to cyber espionage and electronic warfare, protecting both the technology and the personnel who depend on it.

An Economic Engine in the Defense Corridor

Beyond its strategic military implications, the $172.7 million contract represents a significant economic development for Northern Virginia’s bustling defense sector. In Fiscal Year 2023 alone, the Commonwealth of Virginia received over $68.5 billion in defense spending, which accounted for nearly 10% of the state's GDP. This award to McLean-based AMERICAN SYSTEMS reinforces the region's status as a critical hub for the national defense industrial base.

As one of the nation's largest employee-owned companies, with approximately 2,000 employees, the contract sustains and potentially grows a highly skilled workforce dedicated to national security missions. The long-term nature of the agreement provides stability and reinforces the symbiotic relationship between the government and its private sector partners in maintaining technological superiority.

"Our employee-owners are committed to delivering innovative, mission-focused solutions that enhance warfighter readiness and lethality," Steckel added. This commitment is central to the collaborative effort of testing and refining the tools that will define the future of naval power, ensuring the U.S. Navy and Marine Corps are prepared for the challenges of tomorrow.