One full month into a sequester that was supposed to gut U.S. defense spending, the Pentagon just awarded a few of its favorite contractors some $445 million in new defense contracts. And this being April Fool's Day, let's make this clear: No joke.
Among the contract recipients, the big winner today was United Technologies (NYSE:UTX) subsidiary Sikorsky Aircraft, which snagged a full third of the monies available when it won a $155.2 million modification to its firm-fixed-price, sole-source contract to supply spare parts for "various aircraft platforms" operated by the U.S. Army, Navy, Air Force, and Marine Corps. Sikorsky will be working on this contract through July 7, 2015. But while Sikorsky was the biggest winner, it wasn't the only one. Also coming away with bags of Pentagon cash were:
- Textron's (NYSE:TXT) Bell Helicopter division, which won a $13.1 million contract to make advance acquisitions of long-lead parts needed for the construction of 15 Lot 11 UH-1Y Super Huey utility helicopters, and 10 Lot 11 Viper attack helicopters for the Marine Corps. Completion date: September 2014.
- Raytheon (NYSE:RTN), with a $12 million contract to provide "sustainment services" to the Military Satellite Communications System's Global Broadcast System through Oct. 31.
- Computer Sciences (NYSE:CSC), which won what's characterized as a "maximum" of $7.2 million in the form of a firm-fixed-price, indefinite-delivery/indefinite-quantity contract to provide technical and engineering support to the Marine Corps Tactical Systems Support Activity's Operating Forces Tactical Systems Support Center, and also to "operating forces worldwide." Although valued at $7.2 million initially, this contract includes the possibility of three option-year-long extensions, which, if exercised, would bring the total value of the contract up to $29.9 million. Work on the base-year contract will be completed by May 6, 2014. If all three options are exercised, the contract could run through May 6, 2017.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Raytheon and Textron. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.