Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Defense News Roundup: F-35s, Drones, and a New Rocket Launcher for DARPA

The U.S. military has a reputation as a somewhat secretive organization. But in one respect at least, the Pentagon is one of the most "open" of our government agencies. Every day of the week, rain or shine, the Department of Defense tells U.S. taxpayers what contracts it's issued, to whom, and for how much -- all right out in the open on its website.

So what has the Pentagon been up to this week?

DoD is budgeted to spend about $6.2 billion a week on military hardware, infrastructure projects, and supplies in fiscal 2014. (A further $5.6 billion a week goes to pay the salaries and benefits of U.S. servicemen and servicewomen.) So far this year, though, the Pentagon has awarded contracts worth approximately $22.44 billion -- and only $2.11 billion in contracts this past week, barely a third of the budgeted amount.

And what did the generals get for their (read "our") money?

Laying the groundwork for F-35 sales
In a week of weak defense sales, U.S. defense contractor Lockheed Martin (NYSE: LMT  ) was one of the bigger winners, as the Pentagon awarded multiple contracts relating to the company's vaunted F-35 stealth fighter jet. In total, Lockheed won contracts totaling $243 million in value, including awards to do the following:

  • Supply spare parts, training devices, and support equipment to the U.S., British, and Norwegian militaries.
  • Tweak the specific designs of F-35s destined for Israel and Japan.
  • Modify a drag chute to be incorporated into the Norwegian variant of the fighter.

And for the F-35's successors
Of course, former U.S. Joint Chiefs of Staff Chairman Adm. Mike Mullen has predicted that ultimately, even the world's most modern, piloted stealth fighter jet will give way to a new generation of pilotless drone combat aircraft. Continuing that shift from piloted to pilotless aircraft, the Pentagon also awarded two sizable contracts for drone tech.

The larger of these two contracts went to privately held "drone" specialist General Atomics Aeronautical Systems, which was awarded $58 million to pay for 234 Ground Control Station kits, plus related equipment needed to operate GA Predators, Reapers, and other drones remotely.

Separately, GA rival Textron  (NYSE: TXT  ) landed a $38 million award to supply the U.S. Marine Corps with five tactical common data link retrofit kits, used to send encrypted data and streaming video from Shadow unmanned aircraft systems to their ground control stations.

Opportunities on the horizon
Perhaps the most interesting contract awarded over the past week, though, was the $31 million award that Boeing (NYSE: BA  ) won on Friday. Boeing will be providing unspecified "support" to the Airborne Launch Assist Space Access program, or ALASA, from the Defense Advanced Research Projects Agency, or DARPA.

This groundbreaking DARPA project aims to reduce the cost of, and accelerate the timetable for, launching small satellites into space -- by first piggybacking them aboard aircraft, and then boosting them into orbit once already airborne. If successful, this approach could cut the cost of satellite launch by two-thirds, permitting 100-pound and smaller satellites to be put in orbit at a cost of less than $1 million apiece -- perhaps by as early as 2015.

Success, however, will require the development of "specific impulse propellants, stable propellant formulations, hybrid propellant systems, potential 'infrastructure free' cryogen production, new motor case materials, new flight controls and mission planning techniques, new nozzle designs, improved thrust vectoring methods, and new throttling approaches," according to DARPA.

Presumably, Boeing's contract relates to one or more of these development projects. For further details, stay tuned.

Artist's concept of what the ALASA launch vehicle might look like. Source: DARPA

Thanks for all the great stock tips, Pentagon!
You don't always have to look far to find good investments. Sometimes, profiting from our increasingly global economy can be as easy as investing in your own backyard -- and the Pentagon's helpful habit of publishing all its contracts daily as they're awarded certainly makes that easier. Want to find more "easy to understand" investments? Read The Motley Fool's brand-new special report, The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (7) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 23, 2014, at 11:44 PM, Racyman57 wrote:

    I know that this website focuses mainly on the investment portion and how military contracts will effect the market, economy etc., but I am concerned about a defense budget that exceeds the rest of the world's budgets combined, yet I am reading about how vulnerable our military is against a major adversary, like Russia and how defense spending has been re-focused to combat terrorism and to use in countries like Afganistan (insurgents, not armies). So, with the Defense Dept. receiving such a high percentage of our budget and outspending any potential advesary by so much, how can the US military be vulnerable to much of anything?

  • Report this Comment On March 23, 2014, at 11:52 PM, TMFDitty wrote:

    I suspect that part of the answer is that, were the Pentagon to suggest it's *not* in danger, there would be less incentive to increase its budget. Institutions don't like seeing their budgets pared, and if it takes a bit of hyperbole to keep the money flowing, then that's a small price to pay (pun intended).

  • Report this Comment On March 25, 2014, at 12:26 AM, Piotr wrote:

    It's a shame for EU and especially for US, they betrayed Ukraine! It is a shame for US and Obama, they spend many many times more money for defense than Russia and the rest of world, and they can't stand against Russia or those "green people" in Crimea run by criminals. It is dark age in history. What's ahead - partition of Ukraine? And all those big nations signed to respect Ukraine sovereignty and territorial integrity! NATO is afraid of Russia, they will do nothing if Russia will invade Baltic states, Moldova and Ukraine, just sanctions. It such a shame.

  • Report this Comment On March 25, 2014, at 1:51 AM, cvxxx wrote:

    The military is making a classic mistake, Drones will be such a huge disaster that his will be a huge setback.

  • Report this Comment On March 25, 2014, at 6:45 AM, oldgeek60 wrote:

    If we got rid of 675,000 "Chairborne Ranger" DOD civilians of the 800,000 we have. We could spend the $81 Billion saved on training and acquisitions.

  • Report this Comment On March 25, 2014, at 8:40 AM, Jason87467 wrote:

    Sometimes we Americans think the money spent for our weapons is a waste because we don't see a need for them in the near future. But, we never know what will come up and Russia is proof to this. I'm happy we spent that money for those super weapons.

    If Putin does not slack off, we might have to use some of those weapons, especially those which can, I hope, protect us from Intercontinental missiles, which serves as a deterrent to Russia.

  • Report this Comment On March 25, 2014, at 8:46 AM, fingerlakes54 wrote:

    All this money--We pay for the worlds "Military Toys" so you can bet Republicans will want to trim this huge spending. What they don't??? Give me a break. On 9/11 there were only four fighters available to protect the New York Metro area and as it turned out another 26 adjoining states. Where was the hardware? When DC was hit that day only two fighters were available to protect the nations capitol. Now --are we short of material--or do we just have our weapons protecting everyone else but us? Get the world to protect us for a change.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2886192, ~/Articles/ArticleHandler.aspx, 8/29/2015 5:18:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

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.

Today's Market

updated 20 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:01 PM
BA $133.24 Up +1.37 +1.04%
The Boeing Company CAPS Rating: ****
LMT $203.90 Down -0.03 -0.01%
Lockheed Martin Co… CAPS Rating: ****
TXT $39.71 Up +0.30 +0.76%
Textron, Inc. CAPS Rating: ****