Serco LON:SRP has secured a major foothold in the US defence training market after its Mission Training and Satellite Ground Network Communications Software (MT&S) division won a single-award indefinite delivery, indefinite quantity (IDIQ) contract from the US Air Force worth up to $972m (£720mn) over five years.
MT&S, which Serco acquired from Northrop Grumman in 2023, is the sole awardee under the Air Force Modelling and Simulation Support Services (AFMS3) programme. The contract will provide advanced simulator and training support at more than 20 Air Force locations worldwide, underpinning the US military’s growing reliance on synthetic training to prepare personnel for increasingly complex operations.
Serco said it expects the award to generate approximately $60m (£45m) in revenue from task orders in 2026, with the potential for further growth as the contract matures.
Expanding defence footprint for Serco
The AFMS3 programme is designed to deliver secure, efficient and technologically advanced modelling and simulation services. It will support synthetic training exercises, strengthen operational readiness and improve warfighter skills at scale.
By blending live, virtual and constructive training environments, the US Air Force aims to expose pilots, operators and commanders to realistic mission scenarios while reducing the costs and risks of live exercises.
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For Serco, the award signals a significant step in expanding its defence business in North America. Since acquiring MT&S, the group has targeted virtually enabled training and simulation as a growth market, capitalising on armed forces’ increasing use of digital technologies to maintain readiness.
“This contract award reflects our growing capabilities in mission simulation, operational training and Live, Virtual, Constructive technologies, which are key areas of strength and opportunity for Serco both in the US and internationally,” said Anthony Kirby, Serco’s group chief executive. “We are proud that MT&S has been selected to deliver the critically important AFMS3 contract for the US Air Force and are well positioned to deliver innovative, technology-enabled solutions which enhance training and maintain the highest levels of mission readiness for the US Armed Forces.”
Strategic context for Serco
The contract underscores the Pentagon’s push to deepen its investment in synthetic training as a complement to live exercises. Advances in simulation technology now allow forces to rehearse complex scenarios — from cyberwarfare to contested airspace missions — in a virtual environment that can be updated quickly to reflect emerging threats.
Defence analysts note that such training is becoming vital as militaries adapt to multi-domain operations spanning land, sea, air, space and cyberspace. By winning AFMS3, Serco joins a small circle of contractors with the capability to deliver integrated simulation services at scale.
The award also highlights how Serco’s acquisition of MT&S has broadened its offering beyond its traditional strengths in public services and defence infrastructure. Alongside its work in procurement, engineering, asset management and personnel readiness, the company is now positioned to compete for higher-value, technology-driven defence contracts.
Serco’s international ambitions
While the AFMS3 programme will initially serve the US Air Force, Serco believes the expertise gained could strengthen its position in allied markets. NATO members and partner nations are also accelerating investment in virtual and constructive training as they seek cost-effective ways to expand military readiness.
With defence budgets under pressure even as strategic threats rise, the ability to deliver sophisticated, virtualised training at scale is expected to remain a priority for governments on both sides of the Atlantic.
For Serco, the MT&S contract represents both a substantial pipeline of secured revenue and a validation of its strategy to grow its presence in high-value defence technologies.
