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European Companies Win Bulk of Pentagon Defense Contracts Tuesday

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.

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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 May 18, 2014, at 3:49 AM, Fight4Justice wrote:

    The DOD spends over $600 Billion per year, so contracts awarded European companies valued at less than $900 million is not even 1% of the DOD's bloated budget and irresponsible spending habits.

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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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