Pentagon Spending Screeches to a (Near) Halt

Beechcraft, BAE, and Comtech Telecommunications win what little money remains after sequester.

Rich Smith
Rich Smith
Apr 10, 2013 at 7:45PM

Maybe there's something to this whole "sequestration" phenomenon after all -- because for all intents and purposes -- and certainly in comparison with recent trends -- Department of Defense spending has come to a screeching halt in recent days. On Wednesday, for example, DoD issued a grand total of three new contracts, totaling a mere Pentagon pittance of just $44.4 million.

  • Privately held Beechcraft Defense, still feuding with Embraer (NYSE:ERJ) over a contract award for fighter planes in Afghanistan, got a consolation prize of sorts. The $28.6 million firm-fixed-price contract extension it won Wednesday, to service Iraqi Air Force T-6 training aircraft through Dec. 31, was the largest award the DoD gave out Wednesday.
  • A large step down from that one was an $8.3 million award to BAE Systems' (NASDAQOTH:BAESY) Maritime Services Division to supply "Archerfish neutralizers (destructor, mine neutralization, Airborne EX64 Mod 0 Archerfish)" as part of an upgrade to U.S. Navy MK-105 AMCM Magnetic Mine Sweeping systems produced by Exelis (UNKNOWN:XLS.DL). BAE's expected to complete performance on this contract by September 2014.
  • Finally, Comtech Telecommunications (NASDAQ:CMTL) subsidiary Comtech EF Data won at $7.5 million cost-plus-incentive-fee, cost-plus-fixed-fee, firm-fixed-price contract to supply Advanced Time Division Multiple Access Interface Processors -- Ethernet devices to be used by the U.S. Navy to connect ship, shore, and submarine platforms. Work on this contract will be complete by April 24, unless contract options are extended. In that case, the completion date could move out to March 2018, and the contract value could rise to $28.4 million.