Found money
Next to $1 billion in IT contracts, General Dynamics Corporation (NYSE:GD)‘ $208 million in funding to buy submarine “long-lead-time” parts doesn’t look like a lot. But General D’s contract win Friday was nonetheless noteworthy.
Last we had heard, you see, the Pentagon only had enough money on hand to start building one Virginia-class nuclear fast-attack submarine in 2014 — the as-yet unnamed SSN 792. SSN 793 and SSN 794 were to follow in 2015.
The timeframe for construction of SSN 793 appears to have shifted forward, however. On Friday, the Pentagon approved its long-lead-parts acquisitions to begin in 2014. SSN 794 is still scheduled to begin procurement in 2015, as is a new vessel, SSN 795.
Captain Kirk has left the bridge
As one new sub enters the lineup, however, an aircraft carrier is leaving it. On Friday, DoD confirmed that it is proceeding with plans to defuel, retire, and disassemble the USS Enterprise — America’s first, and longest-serving nuclear aircraft carrier. Huntington Ingalls Industries Inc (NYSE:HII) has received a $745 million contract to begin work on the removal of fuel from the carrier’s eight nuclear reactors. Once this work is done, the Enterprise will be towed to its final berth at Puget Sound Naval Shipyard, there to be disassembled and sold for scrap.
Lockheed fixes its mistakes
Say what you want about the $745 million cost of taking the USS Enterprise apart, or the $3.5 billion cost (in today’s dollars) to put it together in the first place — America got a lot of work out of the old girl. Over the course of 51 years in service, the Enterprise sortied on 22 separate foreign deployments, more than any other carrier before or since, defending U.S. interests during the Cuban Missile Crisis in 1962, all the way up to 2011, when the Enterprise was spotted off the Somali coast, hunting pirates.
In contrast, it cost America $80 billion to build 187 of Lockheed Martin Corporation (NYSE:LMT)‘s F-22 “Raptor” stealth fighter jets — yet the plane’s never fired a shot in anger, and last year the entire fleet had to be grounded over reports that F-22 pilots were having trouble breathing when flying the plane. Last week, the Pentagon sank a further $12.7 million into the plane, paying Lockheed Martin Corporation (NYSE:LMT) to provide 72 retrofit kits that (it hopes) will fix the oxygen supply problem.
Fingers crossed.
The article Pentagon Watch: Where Did Your Tax Dollars Go This Week? originally appeared on Fool.com is written by Rich Smith.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics, Huntington Ingalls Industries, and Lockheed Martin.
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