5 Things Your Taxes Bought for the Pentagon in October
As the clock ticked down toward the end of the Pentagon's fiscal year on Sept. 30, Defense Department acquisitions specialists rushed to shovel money out the door, awarding contracts left and right in the final days of September. By the time all the dust settled, $34.76 billion in contracts had been awarded.
The month of October, by contrast, was relatively calm. "Only" $17.1 billion in contracts were handed out by the Pentagon last month. And thanks to the Defense Department's open books policy, and its commitment to publishing all contracts of substantial size on the day they're awarded, for public review, we know how much each of these contracts was worth, who won them, and what they bought for taxpayers.
Today, we're going to review a few of the most interesting things that your tax dollars bought for the Pentagon last month, beginning with...
Zen and the Art of Drone Maintenance
In America and around the world, militaries are spending billions of dollars annually to acquire unmanned aerial vehicles -- "drones," in the popular parlance. But buying a drone is just the first step. Once it's bought, you need to keep the device tuned up and well maintained so it will work as expected. As it turns out, that's pretty lucrative work in its own right.
In October, the U.S. Air Force awarded drone-maker Northrop Grumman (NOC) $204 million to perform maintenance and support, and to run logistics supply chains for its fleet of Global Hawk drones.
Unarmed drones such as the Global Hawk can be useful for spotting artillery strikes, advising Army artillerists on how to adjust their fire to hit their targets. Of course, you still need to buy the artillery in the first place. Last month, the U.S. Army awarded British defense giant BAE Systems a $245 million contract to supply it with 30 M109A7 "Paladin" self-propelled howitzers, and also 30 M992A3 tracked ammunition carriers to keep the Paladins well supplied.
Like it or not, arms sales are an international business. One contract that illustrates just how international the arms trade has become is a $172 million contract awarded to private U.S. defense contractor Sierra Nevada Corporation. In a contract spanning at least three countries, SNC will build six A-29 Super Tucano fighter planes in cooperation with Brazilian aerospace giant Embraer (ERJ). The U.S. Pentagon will then broker a sale of these fighters to the Lebanese military in what the government refers to as a "foreign military sales" contract.
Missiles From Heaven
Yet another aerospace giant, this time America's own Lockheed Martin (LMT) landed a $305 million contract in October. The funds will be used to purchase an unspecified number of Lockheed's new Joint Air-to-Surface Standoff Missiles for the U.S. Air Force. Armed with 2,000-pound conventional warheads, these missiles are designed to be launched from U.S. B-1, B-2, and B-52 strategic bombers, and from tactical fighter jets such as the F-15, F-16, and the new F-35 stealth fighter jet.
And Bombers From Boeing
Lockheed Martin's archrival in the U.S. is aerospace giant Boeing (BA). Best known for its Boeing 737, 747 and 787 commercial jetliners, Boeing is also a big name in the defense world. Last month, Boeing landed a monster $898 million award to supply the U.S. Navy with 15 EA-18G Growler electronic warfare aircraft "and associated airborne electronic attack kits." Designed to knock out enemy radar and anti-aircraft defenses before an attack, the Growler is a derivation of Boeing's vaunted F/A-18 Hornet. Together, these two aircraft make up the bulk of naval aviation aircraft flying for the Navy today.
Of course, these awards represent only a small sampling of the hundreds of contracts your tax dollars funded last month. To see the rest, check out the U.S. Department of Defense contracts website.
This will be Motley Fool contributor Rich Smith's final defense business column for DailyFinance. It's been a pleasure writing for you all. Rich has no financial interest in any of the companies discussed above, but The Motley Fool recommends Embraer-Empresa Brasileira. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.