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Pentagon Announces $445 Million in "April Fool's" Contracts

By Rich Smith - Apr 1, 2013 at 11:49PM

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Actually, these awards are quite real -- and quite valuable to the winners.

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 winners today were:

  • Northrop Grumman (NOC -0.74%), winner of one of the larger awards with a $47.8 million firm-fixed-price contract to provide logistical support to Air Force C-20 passenger aircraft operating out of Ramstein Air Base in Germany, Andrews Air Force Base in Maryland, Sigonella Air Base in Italy, and Kaneohe Bay Air Force Base in Hawaii. This contract runs through June 31.
  • Rockwell Collins (COL), which won a firm-fixed-price, sole-source contract worth up to $16.2 million to supply spare parts for Air Force C-17 transport planes. This contact should be completed by Jan. 31, 2018.
  • Huntington Ingalls (HII 1.00%), which got an $18.2 million modification to a previously awarded contract for "special tooling, special test equipment, and supplier related vendor support services" needed to continue building the nuclear aircraft carrier USS Gerald R. Ford. Huntington should have the equipment in hand by September 2015 -- the same year the Ford is expected to enter service with the U.S. Navy.
  • Lockheed Martin's (LMT 1.07%) Mission System and Training division, which won $17.1 million in a cost-plus-award-fee order under a previously awarded basic ordering agreement. Lockheed will be assisting the Navy in post-shakedown work on the new USS Fort Worth Littoral Combat Ship, designated LCS 3. Lockheed's work should be performed by July.
  • General Dynamics' (GD 0.10%) Electric Boat, which was awarded an $11.8 million cost-plus-fixed-fee modification to a previously awarded contract funding the purchase of onboard repair parts for Virginia-class nuclear fast attack submarines. This work should be completed by August 2016.

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Stocks Mentioned

Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
$447.54 (1.07%) $4.76
Northrop Grumman Corporation Stock Quote
Northrop Grumman Corporation
$467.62 (-0.74%) $-3.48
General Dynamics Corporation Stock Quote
General Dynamics Corporation
$220.05 (0.10%) $0.23
Rockwell Collins, Inc. Stock Quote
Rockwell Collins, Inc.
Huntington Ingalls Industries, Inc. Stock Quote
Huntington Ingalls Industries, Inc.
$206.12 (1.00%) $2.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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