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Johnson & Johnson, Cardinal Health Win Pentagon Contracts

By Rich Smith - Sep 24, 2013 at 11:05PM

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J&J will supply "medical and surgical products." Cardinal will take care of the military's pharmaceutical needs.

One day after the Department of Defense went on a spending spree for medical products, announcing contracts to buy up more than $100 million in "various medical and surgical products" from various medical products companies Monday, the Pentagon went back to the drugstore again on Tuesday -- and placed orders for $354.3 million more.

Specifically, the Pentagon doubled down on its orders from Johnson & Johnson (JNJ 0.32%), awarding the company a pair of contracts:

  • $42.1 million: in exercising the fifth of seven possible option-year extensions on a contract to supply the U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies with "various medical and surgical products."
  • $21.6 million more: exercising the fourth of seven possible option-year extensions on a separate contract to supply such products to the same military branches and government agencies.

The Pentagon also awarded a much-increased award to Cardinal Health (CAH 0.88%). Yesterday, the company won a contract worth up to $7.1 million for "software applications." Today's award maxes out at $290.6 million, and calls upon Cardinal to supply "specific pharmaceutical items" to the U.S. Army, Navy, Air Force, and Marine Corps. This contract modification extends the period of effect of an initial 20-month base contract by a further 20 months. The contract had already been extended by this same amount once before, and no further optional extensions are provided for in the contract.

This contract, titled "Pharmaceutical Prime Vendor Generation III Primary Supplier," will now run through May 31, 2015.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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Johnson & Johnson Stock Quote
Johnson & Johnson
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$170.75 (0.32%) $0.55
Cardinal Health, Inc. Stock Quote
Cardinal Health, Inc.
CAH
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