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Pentagon Defense Contracts Order $108 Million in Medical Supplies, Software

By Rich Smith - Sep 24, 2013 at 10:50AM

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Abbott Labs, Zimmer Holdings, Johnson & Johnson, and Cardinal Health all stand to benefit.

The Department of Defense announced 51 defense contracts Monday, worth more than $2.14 billion combined. A significant number of the announced awards concerned the delivery of medical devices and supplies. Among them:

  • Abbott Laboratories (ABT 0.20%) was awarded the second of seven possible one-year option periods on a contract to supply various medical and surgical products to the U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Valued at up to $45.3 million for just this one option year, this contract will now continue through at least Sept. 27, 2014.
  • Zimmer Holdings (NYSE: ZMH) was awarded the first of seven possible one-year option periods on a similar contract to supply various medical and surgical products, also to the Army, Navy, Air Force, Marine Corps, and federal civilian agencies. This contract is valued at up to $36.9 million, and it will run through at least Sept. 26, 2014.
  • Johnson & Johnson (JNJ -2.07%) subsidiary DePuy Orthopaedics won the second of seven one-year option periods on a contract to supply various medical and surgical products. Smaller in dollar value at just $18.9 million, J&J will be supplying the same customers, and its contract will run through at least Sept. 24, 2014.
  • Finally, a somewhat different award went to Cardinal Health (CAH 5.18%). This one, worth up to $7.1 million, is for the second out of four potential option years, but it concerns not medical supplies but rather "the establishment of a license agreement for use of various software applications." Once again, though, the beneficiaries are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Completion date: Sept. 25, 2014. 

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Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson and Zimmer Holdings. 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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Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$167.14 (-2.07%) $-3.53
Abbott Laboratories Stock Quote
Abbott Laboratories
ABT
$110.49 (0.20%) $0.22
Cardinal Health, Inc. Stock Quote
Cardinal Health, Inc.
CAH
$66.00 (5.18%) $3.25

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

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