The U.S. military has a reputation as a somewhat secretive organization. But in one respect at least, the Pentagon is one of the most "open" of our government agencies. Every day of the week, rain or shine, the Department of Defense tells U.S. taxpayers what contracts it's issued, to whom, and for how much -- all right out in the open on its website.
So what has the Pentagon been up to this week?
Between "base" spending levels, and supplementary spending on overseas contingency operations (OCO), the DoD is budgeted to spend about $11.8 billion a week in fiscal 2014. $6.2 billion of that goes to military hardware, infrastructure projects, and supplies, with the balance going to pay personnel. This past week, though, the Pentagon played catch-up after several weeks of running under-budget -- and blew through $10.94 billion worth of spending in five short days.
And what did the generals get for their (read "our") money?
Military intelligence (insert joke here)
The big defense contract news of the week arrived at the end of the week, when on Friday, the U.S. Army awarded two contracts -- worth a combined $7.2 billion -- to two teams of contractors that will be supplying it with "global intelligence support services."
Now, that's a pretty vague expression (especially for something carrying around a $7.2 billion price tag). And the Pentagon's clarification of what the contracts entail didn't clear it up much, either, explaining only that the contractors will be satisfying the Army's "need for fully integrated intelligence, security, information operations and related support."
What we do know is that the companies which will be providing the bulk of this support ($5 billion worth) include such establishment names as BAE Systems, Booz Allen Hamilton, CACI, Lockheed Martin (NYSE:LMT), ManTech, Northrop Grumman (NYSE:NOC), and SAIC.
Nuke boat contract glows green for General Dynamics
Laid alongside Friday's $7.2 billion worth of intelligence contracts, most of last week's awards dwindle in comparison. But viewed in isolation, some of these awards were still pretty sizable. Take General Dynamics' (NYSE:GD) win Thursday, for example. For $234 million, General Dynamics will be conducting engineering work on "active nuclear submarines" for the U.S. Navy through at least Sept. 30, 2015. What's more, if all options are exercised on this contract, it could swell to $1.54 billion in value over a period of some additional years.
XM25s from ATK
Not all awards stretched into the 10-figures, of course. Weapons manufacturer ATK's contract to continue development work on the Army's new (already in production) XM25 Individual Semi-Automatic Airburst System (a 25mm grenade launcher), for example, will be worth only $33.4 million. This contract will fund a further 24 months' worth of development work on the weapon.
The Zen of A-10 Warthog maintenance
Meanwhile overseas, civilian airline Korean Air Lines has won some military work doing maintenance on U.S. Air Force A-10 Thunderbolt II ("Warthog") close air support jets. The contract, worth $46 million to the airline, covers maintenance and repair work on the warplanes through Sept. 30, 2020.
Opportunities on the horizon
So much for the contracts that everyone knows about. Now, let's end this week's round-up with one contract that you may not yet have heard of.
On Monday, September 8, the Defense Security Cooperation Agency confirmed that it has notified Congress on a planned foreign military sale to Brazil of three UH-60M Black Hawk helicopters, armed with M-134 7.62mm Machine Guns. United Technologies (NYSE:UTX), which builds the helicopters, will be one of two primary contractors on the sale. General Electric (NYSE:GE), which builds the engines that power the helos, will be the other.
Combined, these two companies stand to collect $145 million from the sale.
Mind you, this contract is not "official" yet, and the Pentagon hasn't yet announced its award. In all probability, most investors don't even know that it's in the works -- except that now, you do.
Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics, General Electric Company, Lockheed Martin, and Northrop Grumman. 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.