The U.S. military has a reputation as a somewhat secretive organization. But in one respect at least, the Pentagon ranks among our most transparent 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.
DoD is budgeted to spend about $6.2 billion a week on military hardware, infrastructure projects, and supplies in fiscal 2013. (A further $5.6 billion a week goes to pay the salaries and benefits of U.S. servicemen and servicewomen). But as you may recall, the Pentagon went a wee bit over budget last week — and spent a whopping $9.8 billion.
Like any other consumer shocked to see the balance on a credit card statement, the Pentagon sharply curtailed its spending. From Monday through Friday, DoD spent only $3.5 billion. Even accounting for a short break from shopping to enjoy the fireworks Thursday, that works out to a spending rate of just $875 million per day, or 70% of what you’d ordinarily expect.
So … what did $0.70 on the budgeted defense-spending dollar buy us this week?
Ahh … ahh … achoo!
For one thing, it bought a whole lot of flu drugs to treat flu bugs. On Monday, the DoD awarded twin contracts for flu vaccines to a pair of foreign Big Pharma producers. France’s Sanofi SA (ADR) (NYSE:SNY) was awarded a $14 million contract for flu vaccines. Switzerland’s Novartis AG (ADR) (NYSE:NVS) got a similar $14 million order.
Imports and exports
Helping to balance out the U.S. balance of payments, though, was The Boeing Company (NYSE:BA), which inked contracts to export far more dollars’ worth of military hardware than we’re importing from Europe. In a trio of contract wins, The Boeing Company (NYSE:BA) won orders to “sustain” Apache attack helicopters operated by the Netherlands, to sell Apaches to the Saudi military, and in the largest of its contract wins, to “support” the Royal Saudi Land Force Aviation Command, which operates a fleet of — you guessed it — AH-64E Apache attack helicopters. In total, these three contracts should be worth upwards of $132 million to The Boeing Company (NYSE:BA).
$132 million? Chicken feed!
If that sounds like a lot of money — it’s not. At least not relative to the wins that The Boeing Company (NYSE:BA) archrival Lockheed Martin Corporation (NYSE:LMT) booked last week. On Monday, Lockheed Martin Corporation (NYSE:LMT) scored a $295 million DoD contract to continue work on upgrading the Aegis air defense system to a configuration capable of shooting down ballistic missiles.