The Department of Defense awarded only eight defense contracts in its Monday evening announcement of contract awards, but one of them was a doozy. The total value of contracts awarded was $17.86 billion. The value of the single contract won by General Dynamics (NYSE:GD) subsidiary Electric Boat, however, accounted 98.5% of the funds on offer.
General Dynamics' contract, worth $17.6 billion over the next five years, came in the form of a sole-source, fixed-price incentive multiyear contract to build 10 Virginia-class nuclear fast attack submarines for the U.S. Navy. These funds will pay for work to be done between 2014 and 2018, and some of the work will be subcontracted out to fellow sub-builder Huntington Ingalls (NYSE:HII).
The Pentagon notes that construction of the submarines will be ongoing through August 2024. The supply of optional on-board repair parts is expected to increase the value of this contract to $17.8 billion.
In unrelated news, Total SA (NYSE:TOT) subsidiary Hutchinson Industries won a firm-fixed-price, indefinite-delivery/indefinite-quantity contract to supply the U.S. Army with up to $28.2 million worth of wheel and tire assemblies through Aug. 28, 2017.
Also, Esterline Technologies (NYSE:ESL) subsidiary ARMTEC was awarded an $11.4 million option exercise to supply the U.S. Air Force and Arm with a total of 390,800 M206 decoy countermeasure flares used to distract hostile missiles from helicopters and low-flying aircraft. Delivery is due July 31, 2015.