The Department of Defense awarded a total of 16 contracts to its favored contracts Tuesday, worth a combined $2.7 billion. One award, however, stood out from the pack both for its sheer size and the unusual identity of the recipient: Polaris Industries (NYSE: PII ) , a company better known for its snowmobiles and ATVs than for its military hardware.
Specifically, the Pentagon awarded Polaris' specialized Polaris Defense subsidiary a $382.5 million maximum value, fixed-price with economic-price-adjustment contract. This contract is stated to be for the purchase of "fire and emergency vehicles" for the Army, Navy, Air Force, Marine Corps, and federal civilian agencies, and has a May 17, 2018, performance completion date.
This is a sizable award for the specialist in small, off-road vehicles. The contract amounts to more than 11.5% of the sales revenue Polaris generates in an ordinary year -- and even spread over five years, as the contract terms specify, the contract should ensure more than 2% of Polaris' revenue stream for each year it's in effect.