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Pentagon Awards Transportation Contract Worth $147 Million

By Rich Smith – Dec 31, 2013 at 8:42PM

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Alaska Airlines, Atlas Air, FedEx, UPS, and US Airways all stand to benefit.

On the final day of 2013, the Department of Defense awarded a team of 11 air transport companies a $146.6 million defense contract modification, adjusting the price it will pay for "Category A international commercial air cargo transportation service for less-than-full pallet/plane loads."

Beneficiaries of the contract include:

  • Alaska Airlines (ALK 0.03%)
  • Atlas Air (AAWW 0.03%)
  • FedEx (FDX -0.47%)
  • UPS (UPS -1.07%)
  • US Airways (NYSE: LCC)
  • And six privately owned firms besides.

The contract permits each of the 11 firms named to bid on individual task orders as required, providing transport services to the U.S. Transportation Command Directorate worldwide. The contract remains in force through Jan. 31, 2015.

The Pentagon did not specify, but this modification appears to be exercising an option to extend a contract originally awarded to these 11 companies -- and a 12th, no longer included in the award -- in January 2013. At that time, the Pentagon had confided the additional detail that this contract covered "time definite, door-to-door transportation service ... including the movement of general, refrigerated, oversized, hazardous material, and life and death cargo services for both domestic and international shipments."

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends FedEx and UPS. 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.

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