$840 Million by Sundown: A Snapshot of U.S. Defense Contracting
How the U.S. military spends tax dollars day by day.
In the two minutes you were brushing your teeth on Tuesday, the U.S. military spent about $1.2 million in defense contracts.
By the time you clocked out from work at 5 p.m., a total of $840 million in taxpayer money had been awarded to a handful of companies for everything from submarine-related engineering to “communications management” services. That’s more in one day that the annual gross domestic product of some small island nations.
Though it was significantly higher than some other days this week, Tuesday’s reported expenditure is by no means uncommon. A random sampling of 10 other days in the past five years averaged to an awarding of approximately $930 million in defense contracts per day (including samples as low as $27 million in a day, up to nearly $2 billion).*
In a nation that routinely allocates north of $500 billion to its military annually, there is relatively little interest when it comes to exactly how all that money is spent.
Sometimes huge chunks go out the door at once for work related to major weapons systems, like the infamously pricey F-35 fighter jet, for which contracting giant Lockheed Martin has reaped billions over the years. But much of the time it’s a steady stream of tens of millions flowing each day to smaller companies that provide more mundane services. For instance, the West Alton, Missouri firm GPM Inc. won a $15 million contract Tuesday for, among other things, “vegetative management” and mowing for the U.S. Army Corps of Engineers.
So who’s buying? Who’s selling? Where in the U.S. does the money actually go? The following is just a snapshot from Tuesday, which, based on the random sampling, generally appears illustrative of daily contract allocations:
The Big Money in Subs
By far the biggest amount went to General Dynamics Electric Boat: $432 million from the U.S. Navy for a modification on a previous contract improve Virginia-class submarines. In military speak, the firm will “will continue development studies and design efforts related to components and systems to accomplish research and development tasks and prototypes and engineering development models required to fully evaluate new technologies to be inserted in succeeding Virginia-class submarines.”
The next highest-cost award, from the Army, went to Greenville, South Carolina’s Fluor Enterprises Inc., which got a $261.1 million contract for construction services and power restoration work in Puerto Rico. That contract comes more than two months after Hurricane Maria made landfall on the island.
Work Mostly Done in the U.S.
For the most part, the money the military spends is awarded to U.S.-based companies or subsidiaries. In Tuesday’s example, nine companies took home domestic contract wins — three in Texas, and then one each in Connecticut, Minnesota, South Carolina, Pennsylvania, Missouri and Virginia. In all cases except one, the Pentagon either said the work is to be performed somewhere in the U.S. or the location has yet to be determined. The outlier was an $11.7 million Army Intelligence contract for Leidos Inc. for “maintain[ing] command, control, communications, computers and information management services.” That work will be done in the U.S. as well as in Belgium and Kuwait, the Pentagon said.
Who’s Wants What?
Tuesday’s reporting only showed contracts awarded by the Army and Navy, but additional sampling showed many other military branches or departments often pop up — especially the Air Force with some of its big-ticket items. Lesser known and arguably less sexy departments, like the Defense Logistics Agency and the Defense Human Resources Activity, consistently award contracts for tens of millions to support the meat and potatoes of military operations worldwide.
Smallest Contract of the Day: A $9.5 Million Mystery
On its usual contracting website, the Pentagon doesn’t list contracts under $7 million, so for Tuesday, the smallest available contract was $9.5 million. It was designated for the Mayo Clinic in Rochester, Minn., “for the Technology to Enhance Warfighter Performance and Capabilities program.” The posting says the contract was “procured under an Office of Naval Research Request for Proposal,” but does not give much of an explanation beyond that. A Navy official did not immediately provide further clarification.
All this, and that’s just a Tuesday.
You can follow the military’s contracting reporting by checking the Pentagon’s website, updated daily.
*This report is based on the Pentagon’s daily contract reporting, which excludes contracts worth less than $7 million. Other than Tuesday, the sample dates were chosen using Google’s random number generator and were as follows: Feb. 14, 2013; Feb. 26, 2013; Feb. 11, 2014; Feb. 28, 2014; July 22, 2014; Oct. 30, 2014; Nov. 10, 2014; Jan. 20, 2015; April 11, 2016; and Oct. 12, 2016.
** The calculations for Tuesday exclude a $12.1 million defense contract with Inter-Coastal Electronics Inc. of Mesa, Arizona because it was a foreign military sale to Qatar, whose government is presumably picking up the tab. The calculations involving sample dates still include foreign military sales because some were mixed up with domestic sales in the same contract.
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