Defense News Roundup: Rockets and Helicopters and Snoopy (Oh, My!)
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?
DoD is budgeted to spend about $6.2 billion a week on military hardware, infrastructure projects, and supplies in fiscal 2014. (A further $5.6 billion a week goes to pay the salaries and benefits of U.S. servicemen and servicewomen.) So far this year, though, spending has been exceedingly light, with last week's contracts adding up to "only" $1.9 billion.
And what did the generals get for their (read: "our") money?
Butter, not guns
Napoleon Bonaparte once observed that "an army marches on its stomach," and at Sysco , they certainly hope that's true. On Thursday, Sysco got an immediate (if small) return on its $8.2 billion purchase of US Foods when Sysco's soon-to-be subsidiary landed two "prime vendor full-line food distribution" contracts to keep military bases in California and South Korea supplied with food. Total value: $49 million.
Rockets, not guns
That same day, Raytheon was awarded a contract three times as large -- $156 million -- to supply the U.S. Missile Defense Agency with eight Standard Missile-3IB interceptors for use in missile defense.
And helicopters, too
That same day (in contrast to the rest of the week, Thursday was a very busy day at the Pentagon), United Technologies grabbed the biggest contract of the week. For the grand total of $550 million, UTC will be building and shipping to the U.S. Navy more than three dozen shiny new Sikorsky Seahawk helicopters. Specifically, 18 MH-60S and 19 MH-60R multimission maritime helicopters will be going to sea. Sikorsky has until the end of next year to complete manufacturing and delivery of the helicopters.
Keeping our flyers safe
So much for the big-dollar contracts. Perhaps the most interesting defense contract awarded this past week, though, was actually pretty small in terms of dollars invested. For $7 million, Boeing was tapped to provide support for the Pentagon's new Combat Survivor Evader Locator, or CSEL, program.
Have you ever read one of the Peanuts comic strips in which famed flying ace Snoopy is shot down by the Red Baron, and forced to flee for his life from farmhouse to farmhouse, caught behind enemy lines in World War I France? If you've found yourself biting your nails in anticipation, fearing for Snoopy's safety as he attempts to evade the kaiser's troops, you'll understand the need for a program like CSEL -- which provides a secure means of communicating with and locating downed pilots and aircrew, and of directing combat search-and-rescue teams to pick them up.
Utilizing GPS signals to pinpoint a downed pilot's location, and encrypted, secure, two-way radio to keep the pilot in contact with the team attempting his rescue, CSEL aims to keep Snoopy safe from harm and effect his quick rescue. At just a few million dollars in value, it's not a big program. But it's certainly worth the effort to keep Snoopy safe.
Thanks for all the great stock tips, Pentagon!
You don't always have to look far to find good investments. Sometimes, profiting from our increasingly global economy can be as easy as investing in your own backyard -- and the Pentagon's helpful habit of publishing all its contracts daily as they're awarded certainly makes that easier.
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The article Defense News Roundup: Rockets and Helicopters and Snoopy (Oh, My!) originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Sysco and owns shares of Raytheon. Try any of our Foolish newsletter services free for 30 days. 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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