Pentagon Awards $2.42 Billion in Defense Contracts Tuesday

The Department of Defense awarded 16 defense contracts in its Tuesday evening announcement of contract awards, released after stock markets closed for the day. The total value of contracts awarded came to $2.42 billion -- the largest such one-day contract announcement in weeks.

Raytheon (NYSE: RTN  ) won one of the day's larger awards, a $73.4 million firm-fixed-price contract to supply the U.S. and allied navies with rolling airframe missile, or RAM, round packs as required, and to supply spare missiles to the German military in particular. Raytheon's RAM, which was co-developed by and is co-produced with the German government, is an anti-ship-missile defense system capable of deployment aboard multiple ship platforms. Deliveries under this contract will continue through November 2016.


Raytheon's RAM in flight. Photo: Raytheon.

Among the other companies winning contracts, Novartis (NYSE: NVS  ) won a firm-fixed-price contract to supply the U.S. Army, Navy, Air Force, and Marine Corps with up to $22 million worth of Japanese encephalitis, or JE, vaccine. According to the U.S. Centers for Disease Control, JE is "the leading cause of vaccine-preventable encephalitis in Asia and the western Pacific." This initial one-year contract will run through at least June 24, 2015, and may be extended through invocation of a one-year option period.

Also, scandal-plagued American Apparel (NYSEMKT: APP  ) , which recently fired its CEO amid allegations of sexual harassment at the company, won two awards:

  • The second of four possible one-year option periods attached to a contract to produce various types of combat utility uniform trousers for the U.S. Marine Corps. Valued at up to $16.2 million, this contract is now expected to continue in force through June 27, 2015.
  • A separate option exercise -- also by the USMC, and again, the second one-year period out of a possible four one-year extensions -- to supply up to $15.3 million worth of various types of combat utility uniform blouses. This contract will also continue in force through at least June 27, 2015.

Discover a top stock pick for 2014
Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (1)

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.

Be the first one to comment on this article.

DocumentId: 3007929, ~/Articles/ArticleHandler.aspx, 7/25/2014 8:09:00 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...


Advertisement