Pentagon

The Pentagon funneled coronavirus relief funds to defense contractors

The Cares Act, which Congress passed earlier this year, gave the Pentagon money to “prevent, prepare for, and respond to coronavirus.” But a few weeks later, the Defense Department began reshaping how it would award the money in a way that represented a major departure from Congress’s intent.

The payments were made even though U.S. health officials think major funding gaps in pandemic response still remain. Robert Redfield, director of the Centers for Disease Control and Prevention, said in Senate testimony last week that states desperately need $6 billion to distribute vaccines to Americans early next year. Many U.S. hospitals still face a severe shortage of N95 masks. These are the types of problems that the money was originally intended to address.

“This is part and parcel of whether we have budget priorities that actually serve our public safety or whether we have a government that is captured by special interests,” said Mandy Smithberger, a defense analyst at the Project on Government Oversight, a watchdog group.

DOD officials contend that they have sought to strike a balance between boosting American medical production and supporting the defense industry, whose health they consider critical to national security. The Pentagon, which as of 2016 employed more than 156,000 people working in acquisitions alone, also has lent its expertise to the Department of Health and Human Services as it seeks to purchase billions of dollars in needed medical equipment.

“We are thankful the Congress provided authorities and resources that enabled the [executive branch] to invest in domestic production of critical medical resources and protect key defense capabilities from the consequences of COVID,” Ellen Lord, the Pentagon’s undersecretary for acquisition and sustainment, said in a statement. “We need to always remember that economic security and national security are very tightly interrelated and our industrial base

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DoD space agency driving Pentagon contractors to rethink their price points

Space Development Agency constellations of cheaper mass-produced satellites create opportunities and risks for contractors

WASHINGTON — The Space Development Agency is buying 20 communications satellites for about $14 million apiece, and eight missile-warning satellites for about $43 million per unit.

These price points are unprecedented in Pentagon satellite programs and a sign that the military space market could be headed in a different direction, said Bill Gattle, president of space systems at L3Harris.

L3Harris and SpaceX each received contracts on Monday to build four missile warning satellites for the Space Development Agency. Lockheed Martin and York Space in August won contracts to each produce 10 data-relay satellites. All must be delivered two years from now. 

Military satellites typically are made in onesies and twosies, take decades to develop and cost hundreds of millions of dollars each. The SDA constellations of cheaper mass-produced satellites are a “fundamental transformation” in how DoD buys space technology, Gattle told SpaceNews Oct. 6.

With SDA planning to buy hundreds more satellites in the coming years, “we’re all trying to figure out how to change the price point,” Gattle said.

DoD wants to build large constellations that cost less and also are reliable and deployed quickly, he said. “So all of us have really taken a hard look at how do we build these things? What drives the cost? Why do DoD exquisite systems cost so much?”

Gattle said L3Harris, like other companies, were caught off guard by the speed of SDA contracting. The company had planned to compete for the Transport Layer satellites that were awarded to Lockheed Martin and York Space, but it didn’t move quickly enough. 

“I don’t think we were as ready as we needed to be. And therefore we didn’t win,” he said. When the Tracking Layer opportunity for missile-warning satellites

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Pentagon redirected pandemic funds to defense contractors

The Pentagon redirected most of its $1 billion in pandemic funding to defense contractors who exchanged the money for jet engine parts, body armor, dress uniforms and other military needs, The Washington Post reported on Tuesday.



Pentagon redirected pandemic funds to defense contractors


© Greg Nash
Pentagon redirected pandemic funds to defense contractors

The CARES Act passed by Congress in March granted the Department of Defense $1 billion to both prevent and get ready to respond to the coronavirus, but the Post reported that in the weeks that followed, hundreds of millions of the taxpayer money was instead utilized to obtain military supplies.

This was a change from the intent of Congress, the Post noted.

Meanwhile, U.S. health officials are still requesting funding for pandemic response, including $6 billion for states to make vaccines available when they are developed and to address a shortage in N95 masks for hospitals. The Pentagon has also requested that $11 billion be provided in a potential new stimulus bill being debated by Congress.

Congress instructed the $1 billion in the CARES Act to go to Defense Production Act (DPA) efforts, which permits President Trump to direct U.S. companies to manufacture necessary products, such as personal protective equipment (PPE).

Months after the funding was allocated, department lawyers concluded the money could be used for defense production, including projects that had little to do with responding to the pandemic, the Post reported. Smaller firms received more than a third of the funding for less than $5 million, but hundreds of millions of dollars went to several large companies.

At least 10 of the about 30 contractors awarded with DPA funding also received money from the Paycheck Protection Program (PPP), the Post found.

Jessica Maxwell, a spokesperson for the Department of Defense, told The Hill in a statement that the DPA funding and

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Outrage follows as Pentagon funnels millions meant for COVID supplies to private defense contractors

Donald Trump
Donald Trump

US President Donald Trump tours a Honeywell International Inc. factory producing N95 masks during his first trip since widespread COVID-19 related lockdowns went into effect May 5, 2020, in Phoenix, Arizona. BRENDAN SMIALOWSKI/AFP/Getty Images

Instead of adhering to congressional intent by building up the nation’s inadequate supply of N95 masks and other equipment to combat the Covid-19 crisis, the Pentagon has funneled hundreds of millions of dollars in appropriated taxpayer funds to private defense contractors for drone technology, jet engine parts, Army uniform material, body armor, and other purposes not directly related to the pandemic.

As the Washington Post reported Tuesday morning, the Department of Defense—headed by former Raytheon lobbyist Mark Esper—”began reshaping how it would award the money” just weeks after Congress in March approved a $1 billion fund under the Defense Production Act to help the nation “prevent, prepare for, and respond to coronavirus.”

“The Trump administration has done little to limit the defense firms from accessing multiple bailout funds at once and is not requiring the companies to refrain from layoffs as a condition of receiving the awards,” the Post noted. “Some defense contractors were given the Pentagon money even though they had already dipped into another pot of bailout funds, the Paycheck Protection Program.”

As the U.S. still faces major shortages of testing supplies and N95 masks six months into the pandemic, the Post reported that the Pentagon has used congressionally approved funds to dish out $183 million to luxury carmaker Rolls-Royce and other companies to help “maintain the shipbuilding industry,” tens of millions for “drone and space surveillance technology,” and $80 million to “a Kansas aircraft parts business.”

A subsidiary of Rolls-Royce also received $22 million from the Pentagon “to upgrade a Mississippi plant,” according to the Post.

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