What the Pentagon Bought With Your Tax Dollars in April
Not all government agencies are entirely transparent about how they spend your tax dollars. But there is one arm of the U.S. government that does a really good job of keeping taxpayers in the loop, posting detailed reports not only on how much money it spends, but what it spends this money on -- down to the penny.
Believe it or not, we're talking about the Pentagon.
Despite its reputation as a somewhat secretive organization, the Pentagon is actually one of our most transparent government agencies. Every day of the week, 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. Whether its missile defense interceptors, fighter jets, or even rocket ships that the Pentagon's buying, you can read it there first.
Or ... you can read the Cliff's Notes version right here.
What Your Tax Dollars Bought in April
The federal government gets its biggest cash windfall in the month of April. So it's perhaps appropriate that April was also the Pentagon's single biggest spending month so far this year. Pulling out all the stops, and pulling out its checkbook, the Department of Defense awarded a whopping $35.4 billion worth of defense contracts in April. That's nearly as much as it spent in the preceding three months combined.
And what did the generals get for their (read: your) money?
Missiles For Peace
Defense contractor Raytheon's (RTN) Standard Missile-3 Block IB is a cornerstone of national missile defense. Designed to intercept and kill incoming, hostile ballistic missiles, the SM-3 IB has racked up a record of 26 successful "kills" in testing preparatory to its deployment this year.
In April, the U.S. Missile Defense Agency awarded Raytheon a contract to supply it with 44 "all-up rounds" (fully assembled, ready-to-fire units) of the SM-3 IB. Raytheon will be paid at least $599 million -- and potentially more. The Pentagon intends to expand this contract to purchase a total of 52 missiles.
Engines For War(-planes)
Simultaneously with that announcement -- and coincidentally, both of these large contracts were rushed out the door on the last fiscal day of April -- the Pentagon awarded United Technologies a $157 million contract. The purpose of this one was to provide United Tech with the funds needed to begin acquiring parts to build 90 "low-rate initial production Lot X" F-135 engines, of which 55 will go to the U.S. military, and 35 to foreign buyers of the F-35.
The F-135 engine is currently the sole engine used to power Lockheed Martin's (LMT) F-35 Joint Strike Fighter -- and United Technologies is the sole source of this engine.
One Shiny New Rocket
Speaking of Lockheed Martin, that company will share in a $138 million contract awarded to United Launch Alliance, a space tech company jointly owned by Lockheed and Boeing (BA), to purchase one National Reconnaissance Office Atlas V 541 rocket, and to help pay for transportation of two new GPS satellites for the U.S. Air Force.
And these weren't even the biggest contracts awarded last month.
DoD's Own Private(-ly contracted) IT Department
Arguably the biggest contract (by stated value) awarded at the Pentagon last month related to the ongoing Network-Centric Solutions-2, or "NetCents-2" project. This wide-ranging IT contract encompasses the requisition of such services as "network operations," "services-oriented architecture infrastructure," and "telephony infrastructure and services" for the U.S. Air Force, provided by an array of 16 mostly small, privately owned tech companies. In total, the U.S. Air Force plans to spread $5.79 billion worth of contracts around among these 16 contractors over the next seven years.
Everything Else -- and the Kitchen Sink, Too
Big as NetCents-2 is, Navy's 464-contractor SeaPort Enhanced , or "Seaport-e," services contract could become even bigger.
How big, you ask? Here's one hint: Just listing the names of all the companies involved in Seaport-e required four-and-a-half single-spaced pages!
According to the Navy, the Seaport-e contract encompasses some "22 functional service areas," including engineering support, research and development, and "prototyping, pre-production, model-making and fabric support," required variously by the U.S. Naval Sea Systems Command, Naval Air Systems Command, Space and Naval Warfare Systems Command, Naval Supply Systems Command, Military Sealift Command, Naval Facilities Command, Strategic Systems Programs, Office of Naval Research, and the U.S. Marine Corps. And according to the Navy, these ongoing contracts could cost taxpayers up to $5.3 billion per year, over an unspecified term of years.
These contracts of course represent only a small sample of the hundreds of awards your tax dollars funded last month. To see the rest, check out the Department of Defense contracts website.
A fan of the Star Wars movies, Motley Fool contributor Rich Smith owns shares of Raytheon -- which just happens to be building the 21st-century version of Ronald Reagan's "Star Wars" missile defense system. How cool is that? The Motley Fool has no position in any of the stocks mentioned. Check out our free report on one great stock to buy for 2015 and beyond.