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Pentagon Awards $4.22 Billion in Defense Contracts Tuesday

By Rich Smith – Mar 5, 2014 at 9:51AM

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Huntington Ingalls wins day's second-biggest contract -- $1.3 billion to begin prep work for building the U.S. Navy's newest aircraft carrier.

After taking Monday off, the Department of Defense's acquisitions specialists got back to work yesterday, awarding 18 separate defense contracts, worth a total of $4.22 billion. Among the winners:

Huntington Ingalls (HII -0.39%) claimed the day's second-biggest contract, a $1.3 billion contract modification instructing the shipbuilder to continue construction preparation efforts, and to procure materials and begin activities needed for construction of the second nuclear aircraft carrier of the Gerald R. Ford class, the planned carrier John F. Kennedy (CVN 79). Huntington will be conducting R&D work, engineering, design, and related development efforts in addition to stocking up on needed parts to build the carrier. This contract will run through at least October 2017.

Lockheed Martin (LMT -0.01%), meanwhile, won two awards -- albeit smaller in size:

  • a $16.2 million firm-fixed-price contract to procure specialized test equipment and associated technical data packages and adapters needed to test line replacement modules for the Navy's E-2D Advanced Hawkeye airborne early warning aircraft's AN/APY-9 radar system. Work on this contract should be complete by February 2017; and
  • a $10.6 million firm-fixed-price delivery order to repair 13 items in support of Multi-Mode Radar Systems and Electronic Measurement Systems aboard U.S. Navy H-60R Seahawk anti-submarine warfare helicopters. Work on this contract should be complete by March 2015.

Tyson Foods (TSN -0.12%) won the day's third-biggest contract, a fixed-price with economic-price-adjustment contract to supply " overseas military customers" with up to $444 million worth of "commercial chicken items" over the course of three years ending on March 3, 2017.

Reliance Steel & Aluminum (RS 2.06%) did nearly as well. Its subsidiary, I Solutions Direct, was awarded two separate contracts:

  • a one-year option exercise (the final one of a possible three option extensions) worth up to $46.6 million to supply the U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies with carbon steel bar, sheet, and plate materials through March 2, 2015.
  • a separate contract for the same items -- carbon steel bar, sheet, and plate materials -- worth up to $68.7 million in total value. This second contract is also an option exercise, also the third of three possible optional extensions, and also benefiting U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies. It extends Reliance's contract through March 3, 2015.


Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. 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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