Congress Asked to Approve $680 Million Military Package for Mexico

Also requested to okay $80 million in support services for the Kingdom of Saudi Arabia.

Apr 22, 2014 at 4:17PM

The U.S. Defense Security Cooperation Agency notified Congress last week of plans to sell the Kingdom of Saudi Arabia an arms package consisting of UH-60M Black Hawk Helicopters and associated equipment, parts, training and logistical support. While according to DSCA, this notification took place on Thursday, April 17, it was only announced publicly yesterday.

If approved, this sale will generate new revenues of approximately $680 million for principal contractors United Technologies (NYSE:UTX), which manufactures the Black Hawk, General Electric (NYSE:GE), which builds the engines that power it, and for the manufacturers of the equipment that will be installed aboard the helicopters.

The specific equipment that Mexico is asking to buy includes:

  • 18 UH-60M Black Hawk Helicopters in the standard configuration used by the U.S. Government, plus added "designated unique equipment and Government Furnished Equipment"
  • 36 installed, and four spare T700-GE-701D Engines
  • 36 installed, and six spare Embedded Global Positioning Systems/Inertial Navigation Systems
  • 36 M134 7.62mm Machine Guns
  • 18 AN/AVS-9  Night Vision Goggles manufactured by defense contractor Exelis (NYSE:XLS)
  • five Aviation Mission Planning Systems
  • one single Aviation Ground Power Unit
  • associated communication security equipment, Identification Friend or Foe (IFF) systems, spare parts, support equipment, and training and support services

Explaining the sale to Congress, DSCA noted that, "Mexico has been a strong partner in combating organized crime and drug trafficking organizations. The sale of these UH-60M helicopters to Mexico will significantly increase and strengthen its capability to provide in-country airlift support for its forces engaged in counter-drug operations."

According to DSCA, "There will be no adverse impact on U.S. defense readiness as a result of this proposed sale." Nor will the sale, "alter the basic military balance in the region."

In related news, DSCA also notified Congress Thursday of a proposed $80 million arms sale to the Kingdom of Saudi Arabia. DSCA described this latter contract as consisting of "three years of support services for the Facilities Security Forces- Training and Advisory Group (FSF-TAG) in Riyadh, Saudi Arabia in support of the Kingdom of Saudi Arabia Ministry of Interior (MOI)." No primary contractor was named, nor specific equipment to be provided.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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