Northrop Wins $490 Million Contract to Upgrade Air Force Simulators

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The Department of Defense awarded contracts worth $1.75 billion Thursday, parceling out the money in 29 separate awards. But one single company -- Northrop Grumman (NYSE: NOC  ) -- managed to bag the bulk of the loot -- $522.3 million, or roughly 30% of the monies on offer.

Northrop did this with a pair of contract wins, the smaller of which was a relatively modest $32.3 million delivery order placed against a previously issued basic order agreement, whereby Northrop will supply the U.S. Navy with spare parts for use in maintaining five E-2D Advanced Hawkeye airborne early warning aircraft. Delivery is expected to take place in December 2016.

As for the larger award -- the largest contract the Pentagon issued Thursday -- it was very large indeed. Northrop's Information Systems division won a firm-fixed price, single-award, indefinite delivery/indefinite quantity contract to provide follow-on support for the Combat Air Force Distributed Mission Operations and Integration program. For this, Northrop will receive as much as $490 million. 

DoD clarifies that the Distributed Mission Operations Network 2.0 service contract requires Northrop to effect the interoperability of dissimilar Air Force training simulators. It is expected to complete this work by June 30, 2018, although there are options in place whereby the Air Force could extend this contract through as late as June 30, 2023.

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Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

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10/6/2015 4:04 PM
NOC $168.41 Down -1.97 -1.16%
Northrop Grumman C… CAPS Rating: *****