Pentagon Contracting Surged Before Shutdown

While contracting usually peaks in September -- the final month of the government's fiscal year -- the activity was likely fueled this year by a desire to finalize agreements before the shutdown.

The U.S. Defense Department awarded several hundred contracts last month in a fiscal year-end surge of activity as officials raced to ink deals before the government shutdown.

The Pentagon in September announced almost 730 awards potentially worth about $47 billion, according to a Military​.com analysis of the Pentagon’s daily contract announcements.

The value doesn’t include tens of billions of dollars in previously announced Army alternative-energy contracts, or reflect what is actually spent, or obligated, because many deals are only partially funded at first.

Regardless, the quantity alone more than doubled from the previous month. While contracting usually peaks in September — the final month of the government’s fiscal year — the activity was likely fueled this year by a desire to finalize agreements before the shutdown.

A dozen companies, including Lockheed Martin Corp. and General Dynamics Corp., shared the Pentagon’s biggest contract last month, a potentially $4.1 billion deal with the Army for unspecified “communications and transmissions systems,” according to the Sept. 26 announcement. Army Contracting Command at Rock Island Arsenal, Ill., is overseeing the work.

Lockheed, the world’s largest defense contractor, also landed the second- and third-largest military deals in September.

The Bethesda, Md., based company won a $3.9 billion contract from the Missile Defense Agency to build Terminal High Altitude Area Defense, or THAAD, interceptors for the U.S. government and the United Arab Emirates under the Foreign Military Sales program, according to the Sept. 20 announcement.

In such a sale, the U.S. buys weapons or equipment on behalf of a foreign government. Countries approved to participate in the program may obtain military hardware or services by using their own funding or money provided through U.S.-sponsored assistance programs, according to the Defense Security Cooperation Agency.

September_contracting_graphic

Lockheed also received a $3.4 billion Navy contract to build 35 more F-35 fighter jets, according to the Sept. 27 announcement. The agreement was finalized as part of talks covering both the sixth and seventh batches of aircraft, excluding engines.

The seventh batch, or lot, of aircraft calls for 24 F-35As at $98 million a jet; seven F-35Bs at $104 million a jet; and four F-35Cs for the Navy at $116 million a jet, according to information the Pentagon released last month.

Of the two dozen conventional take-off and landing F-35A aircraft, the U.S. Air Force will receive 19, Italy will get three and Norway will take two, according to the contract announcement. Of the seven short take-off and vertical landing F-35B aircraft, the U.S. Marine Corps will receive six and the United Kingdom will get one.

The F-35 Joint Strike Fighter is the U.S. military’s most expensive weapons acquisition program, estimated at $391 billion to develop and buy 2,457 of the fifth-generation, radar-evading fighter jets.

Engine-maker Pratt & Whitney, part of Hartford, Conn.-based United Technologies Corp., won the fourth-largest defense contract last month, a potentially $2.5 billion deal with the Defense Logistics Agency “for various weapons systems spare parts,” according to the Sept. 30 announcement.

The MITRE Corp., based in Bedford, Mass., was the only other recipient in September of a contract valued at more than $1 billion. The nonprofit organization, which manages federal research and development centers, was awarded a $1.7 billion information-technology contract from the Air Force.

The deal covers everything from system engineering to architecture development and include sales to almost two dozen countries, including Saudi Arabia, Pakistan, Jordan, Taiwan, Columbia, Turkey, Kyrgz Republic, Poland, Hungary, Greece, Singapore, United Arab Emirates and Morocco, according to the Sept. 27 announcement.

About the Author

Brendan McGarry
Brendan McGarry is the managing editor of Military.com. He can be reached at brendan.mcgarry@military.com. Follow him on Twitter at @Brendan_McGarry.