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The Department of Defense awarded a total of 16 contracts Tuesday, worth a combined $2.7 billion. One award, however, stood out from the pack both for its sheer size and the unusual identity of the recipient: Polaris Industries (NYSE: PII ) , a company better known for its snowmobiles and ATVs than for its military hardware.
Specifically, the Pentagon named Polaris' specialized Polaris Defense subsidiary in a $382.5 million maximum value, fixed-price with economic-price-adjustment contract. This contract, which gives Polaris the right to compete for orders, is stated to be for the purchase of "fire and emergency vehicles" for the Army, Navy, Air Force, Marine Corps, and federal civilian agencies, and has a May 17, 2018, performance completion date.
Polaris spokesman Richard Edwards said the company currently sells about $50 million worth of ATVs and side-by-side vehicles to the military annually. It does not expect to receive the full amount of this latest fire-and-emergency vehicle contract, as other companies are also participating in the contract, and bidding for individual task orders. But Polaris does hope to build its defense business out to $200 million eventually, a goal this contract win should help to achieve.
Editor's note: A previous version of this article incorrectly implied that Polaris would receive the full $382.5 million maximum value of the contract.