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.
Thanks for all the great stock tips, Pentagon!
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