GE Wins Contracts for C-130 Props, U-2 Engines

The Department of Defense awarded General Electric (NYSE: GE  ) two contracts worth a combined $43.6 million Tuesday. Both contracts benefit the U.S. Air Force.

The smaller contract, for $8 million, is a simple firm-fixed-price contract for the purchase of propellers for the C-130 Hercules transport aircraft, built by Lockheed Martin. This contract should be complete by Jan. 31, 2014.

The larger award, for $35.6 million, came in the form of a firm-fixed-price, cost-plus-fixed-fee and cost-plus-incentive-fee contract for "support and sustainment" of the GE F118-GA-101/101A engines that power the U-2 spyplane. GE will provide field services, in-plant technical services, maintenance, specialized repairs, and other services for the Air Force on this contract, and will also be reimbursed for any fuel it furnishes in the course of its work.

The U-2 spyplane's fate is currently up in the air. At one point, it was scheduled for retirement in 2015. However, early last year the program gained a new lease on life, when the Air Force began to express reservations about the Block 30 version of Northrop Grumman's Global Hawk surveillance drone. At present, the U-2 is expected to continue flying missions -- at least until USAF decides that the new Block 40 Global Hawk is up to the task of replacing it for good.

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