On Tuesday, the U.S. Department of Defense announced a total of 22 new defense contracts worth a combined $7.59 billion. Notwithstanding the large headline number, one single contract accounted for 92% of the funds on offer.

This contract, a massive $7 billion deal to supply solar energy "from renewable and alternative energy production facilities that are designed, financed, constructed, operated and maintained by private sector entities," involves some 22 separate companies. Taking the form of a multiple-vendor, indefinite-delivery/indefinite-quantity, firm-fixed-price, non-option, non-multiyear contract, vendors will bid against each other to sell solar energy to the U.S. Army in response to individual "task orders" issued by the U.S. Army Corps of Engineers.

Once won, a task order will be funded out of the $7 billion "pot" of funds allocated under this master Power Purchase Agreement. Bidders who won the right to compete for these task orders number 22, out of a total of 114 bids submitted. Most of the winners are either small, privately held concerns or small subsidiaries of foreign energy utilities whose stocks are not listed in the U.S. The few exceptions include U.S. listed major energy companies:

  • Dominion Resources
  • Johnson Controls
  • NRG Energy
  • Sunpower 
  • Siemens
  • And also the Apex Wind Energy Holdings subsidiary of BP .

The article Pentagon Awards Massive $7 Billion Solar Power Contract originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Add a Comment

*0 / 3000 Character Maximum