Defense News Roundup: Drones, Mega-Medical Supply Contracts, and FedEx Goes to Warhttp://www.fool.com/investing/general/2013/11/17/defense-news-roundup-drones-mega-medical-supply-co.aspx Rich Smith
November 17, 2013
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 2013. (A further $5.6 billion a week goes to pay the salaries and benefits of U.S. servicemen and servicewomen). With a holiday in their honor held on Nov. 11, though, the generals had a bit shorter shopping spree last week than ordinary.
Result: The Pentagon awarded only about $3.33 billion worth of defense contracts last week. Here are a few of the things they spent it on.
Papa? When I grow up, I want to be a drone
In pure dollar terms, this wasn't a big contract -- only $8 million or so. But it does provide evidence that progress is being made in development of the new MQ-8C.
When a bomb absolutely, positively has to get there overnight
Doctor! We need $1 billion in medical supplies, stat!
At least that's what the Pentagon did on Wednesday, when it awarded a total of four separate contracts to purchase medical supplies for U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agency customers. The biggest winner of the week, with a $1 billion contract to supply such supplies through Aug. 15, 2015, was Cardinal Health (NYSE: CAH).
Opportunities on the horizon
When talking about "defense contactors," we ordinarily -- and justifiably -- expect them to book primarily defense contracts. But in recent months, contractor General Dynamics (NYSE: GD) has been winning more and more contracts to build giant 610-foot-long, 50,000-ton liquefied natural gas tankers for civilian shippers. Last week, GD inked a deal with SEACOR Holdings subsidiary Seabulk to build the fuel shipper one such "LNG-conversion-r