The Department of Defense (DoD) offered several contracts aggregating $263.4 million yesterday. Of the contenders was The Boeing Company (BA - Free Report) which clinched two back-to-back contracts totaling $26.9 million.
The larger contract worth $18.1 million went to Bell-Boeing Joint Project Office, a collaborative venture between Textron Inc. (TXT - Free Report) and Boeing. This involves providing continued logistics services to the different versions of the V-22 Osprey tiltrotor aircraft operated by the U.S. Marine Corps, Air Force and Special Forces Operations Command.
Bell-Boeing’s V-22 Osprey tiltrotor aircraft includes the MV-22, the Marine Corps variant which offers greater maneuverability and can carry combat troops twice as fast and five times farther than previous helicopters. The CV-22 is the Air Force variant which delivers long-range vertical take-off and landing insertion and extraction capability as well as permits aerial refueling and world-wide self-deployment.
The contracting activity is the Naval Air Systems Command, Patuxent River, MD. The contract is expected to run through Jan 2014. The tasks relating to the contract will be carried out in Amarillo, Texas and Philadelphia, PA.
Boeing’s business wing Insitu Inc. secured the second contract valued at $8.8 million for the delivery of a single Low Rate Initial Production II RQ-21A "Blackjack" Unmanned Aircraft System, including air vehicles, ground control stations, launch and recovery equipment, and air vehicle support equipment to the U.S. Navy. The order is expected to be concluded by May 2014.
The 81-pound Blackjack is a small-sized unmanned aerial vehicle (UAV) launched by catapult and has a flight endurance of over 13 hours. The aircraft is able to cover speeds of up to 90 knots. It is primarily a surveillance and reconnaissance drone.
Lately, Boeing has mostly secured low-priced contracts with the occasional high-value orders attributable to the ongoing sequestration in the U.S. The recent being a $325 million contract to offer "diverse and highly complex" systems engineering and integration services related to the country’s ballistic missile defense system.
Boeing’s diverse defense product offering has attracted significant attention from the Middle East, India and Australia. Foreign military sales contracts would to a large extent offset budget austerities in the U.S.
Currently, Boeing carries a Zacks Rank #2 (Buy). Other well-placed operators include Zacks Ranked #2 Lockheed Martin Corp. (LMT - Free Report) and Northrop Grumman Corp. (NOC - Free Report) .