Pentagon contracts fell 29 percent in May from a year earlier, the fifth drop in the past six months, in part driven by automatic U.S. budget cuts.
The Defense Department announced contracts with a maximum value of $13.7 billion last month, down from $19.4 billion in May 2013, according to data compiled by Bloomberg. United Technologies Corp. (UTX) won the only award topping $1 billion, for presidential helicopters.
“There will be fits and starts, but the general trend line will continue to fall,” said Mackenzie Eaglen, a defense analyst at the American Enterprise Institute, a Washington-based policy group. “The steepness of that grade is the only question.”
May’s prime, or direct, contracts were less than half the $35 billion awarded a month earlier. April was the only month since December in which contracts have risen on a year-to-year basis. That gain was propelled by a $17.8 billion Navy contract for 10 Virginia-class submarines.
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