European Companies Win Bulk of Pentagon Defense Contracts Tuesday

BAE Systems, Finmeccanica, and Airbus take home hundreds of millions of dollars' worth of contracts. General Dynamics, Northrop Grumman, and Lockheed Martin also win contracts announced Tuesday.

May 7, 2014 at 9:54AM

The Department of Defense awarded 10 defense contracts in its Tuesday evening announcement of contract awards. The total value of contracts awarded was $1.04 billion. The vast majority of these funds were awarded not to American defense contractors, but to European ones. Namely:

  • Britain's BAE Systems(NASDAQOTH:BAESY)(LSE:BA) won a $444.8 million firm-fixed-price contract to supply the U.S. Army with an unspecified number of Individual and Enhanced Night Vision Goggle III weapons sights, in a series of awards to be determined later. This five-year contract is expected to wrap up May 6, 2019.
  • DRS RSTA, a subsidiary of Italy's Finmeccanica(NASDAQOTH:FINMY), likewise won a firm-fixed-price contract to supply the Army with Individual and Enhanced Night Vision Goggle III weapons sights. Its contract, however, is worth $367 million. As with BAE, the estimated completion date for this five-year contract is May 6, 2019.
  • Airbus' (NASDAQOTH:EADSY) EADS North America unit was awarded a $25.5 million contract modification exercising an option to have EADS provide logistics support for U.S. Army Lakota Utility Helicopters (UH-72A), and adding funds to the original contract for this work. The estimated completion date for this work is Nov. 30, 2015.

Among the U.S.-based winners:

  • General Dynamics (NYSE:GD) was awarded a $12.7 million contract modification to demilitarize and dispose of 78,000 depleted uranium rounds for the U.S. Army. This work should be completed by Sept. 30, 2015.
  • Northrop Grumman (NYSE:NOC) was awarded an $18 million cost-plus-fixed-fee delivery order to provide non-recurring engineering support for MV-22 Integrated Aircraft Survivability Equipment Suite upgrades on U.S. Marine Corps Osprey tiltrotor aircraft. This work will include integrating AN/AAQ-24(V)25 software with electronic warfare controllers and MV-22 mission computers, and will continue through April 2016.
  • Lockheed Martin (NYSE:LMT) won two awards: a $54.7 million contract modification incrementally funding Aegis Platform Systems Engineering Agent (PSEA) activities and Aegis Modernization Advanced Capability Build engineering work aboard U.S. Navy CG 57-class guided missile cruisers and DDG 51-class guided missile destroyers. (This contract will run through at least September 2015.. Also, a $6.8 million firm-fixed-priced delivery order to repair 11 command cockpit items aboard U.S. Navy H-60R/S helicopters. This work should be completed by Jan. 30, 2016.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics, Lockheed Martin, and Northrop Grumman. 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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