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Pentagon Insider: Guess Who Won $6.36 Billion in Defense Contracts Friday?

The Pentagon announced a baker’s dozen of new defense contracts Friday, valued at  $6.36 billion in total. By far the largest of these awards was a $6 billion, multi-party award issued by the Defense Intelligence Agency — big enough that we’ll be discussing it in a separate column. The remaining contract awards, however, totaling $361 million in combined value, also deserve attention.

They included:

– $106.2 million — the day’s second biggest contract — in additional funding for Huntington Ingalls (NYSE:HII) to perform engineering and design work in support of U.S. Navy Los Angeles-, Seawolf-, Virginia- and Ohio-class submarines. On top of other amounts awarded under this pre-existing contract, the total value of this work now exceeds $564 million.

– $42.6 million awarded to Boeing (NYSE:BA) to provide logistics support to the Navy’s fleet of C-40A transport aircraft.

– $14.8 million for Northrop Grumman (NYSE:NOC) to design, build, and deliver AN/AQS-24C mine hunting sonar systems to the Navy. This equipment will be installed in and used aboard Navy MH-53E Sea Dragon helicopters.

Also worth mentioning is a smallish $17.8 million contract awarded to privately-held Safe Boats International. The U.S. Navy is exercising an option to acquire two additional MK VI patrol boats. The Pentagon describes the MK VI as “the Navy’s next generation patrol boat,” and says it “will become a part of the Navy Expeditionary Combat Command’s fleet of combatant craft, ” The Navy will use its new MK VIes to “patrol shallow littoral areas beyond sheltered harbors and bays,” also venturing “into less sheltered open water out to the departure sea area for the purpose of force protection of friendly and coalition forces and critical infrastructure.”

Insider trading notes
Insider transactions reports for two of the companies named above — Boeing and Northrop — have been unencouraging of late, with more sales transactions than purchases reported on Form 4 filings over the past three months.

Huntington Ingalls is more intriguing. Over the past three months, no fewer than 16 insider purchases have been notified to the SEC though none of them were open market purchases. The volume of shares purchased remains very small — just 2,042 shares — consisting primarily of small acquisitions by company directors. Insider acquisitions at Huntington have similarly outweighed insider sales over the past 12 months, and with significantly larger quantities of shares insider-bought than -sold.


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