Economists for Peace and Security

[rossana at comodinoposta.org]

Venti di guerra. La geografia dei conflitti.

http://www.newamericancentury.org/

Per chi fosse interessato ad uno studio sulle maggiori aziende che hanno 
beneficiato degli aiuti dell'Amministrazione Bush negli anni 2005-2006

http://www.epsusa.org/index.htm

Contracts Soar on Strength of Record Military Spending

As part of its effort to fight terrorism and stabilize Iraq, the Bush 
administration has presided over one of the largest military buildups in 
the history of the United States. Counting the costs of the wars in Iraq 
and Afghanistan and the Department of Energy’s
work on nuclear weapons and naval reactors, proposed military spending 
for FY 2008 is $647 billion. After adjusting for inflation, this 
represents the highest level of military spending since World War II – 
higher than the peak of the Reagan buildup, higher than
spending during Vietnam, and higher than the top year of the Korean 
conflict. Military spending has more than doubled since President Bush 
took office in January 2001. This growth in overall military spending 
has been accompanied by comparable
growth in prime contracts awarded to military firms like Lockheed 
Martin, Northrop Grumman and Boeing. As we will see below, a number of 
smaller firms have benefited as well, and in some instances have 
experienced contracting growth that far exceeds the
rates experienced by the largest contracting firms.

Contracts are up from $144 billion in FY2001 to over $294 billion in FY 
2006, an increase of 103%. The largest rates of growth were in FY2002 
(+18.1%) and FY2003 (+22.3%), the period that includes the beginnings of 
the wars in Afghanistan and
Iraq. The rate of contract growth has slowed from those peak years, to 
an 8.7% increase from FY2005 to FY2006. This may suggest that the 
demands of the Iraq and Afghan wars for personnel and operations and 
maintenance expenditures may be cutting into spending for weapons 
procurement and research and development (R&D).
During the FY2001 to FY2006 time frame, Pentagon contracts as a share of 
total federal prime contracts have grown as well, from 64.6% in FY2001 
to 70.1% in FY 2006. A more inclusive figure that includes military 
nuclear activities at the Department of
Energy and contracting by the Department of Homeland Security would put 
the ratio of national security-related contracting to total federal 
contracting at an even higher level.

Total Department of Defense Prime Contracts, FY 2001 to FY 2006
(in billions)

2001 2002 2003 2004 2005 2006 %change 01-06

$144.6 $170.8 $208.9 $230.7 $269.2 $294.9 103%


Source for this and all the following tables is U.S. Department of 
Defense, 100 Companies Receiving the Largest Dollar Volume of Prime 
Contract Awards, Fiscal Year 2001 through 2006 editions. Calculations by 
the author.

Top Beneficiaries, FY2005 to FY 2006:
Did the Rich Get Richer?

Measured in dollar terms, Lockheed Martin was by far the biggest 
beneficiary of the increase in Pentagon contracts. Between FY2005 and 
FY2006, Pentagon contracts to this Maryland-based company totaled over 
$26 billion, a $7.1 billion increase over a oneyear period. Other 
contractors gaining $1 billion or more between FY2005 and FY2006 
included Northrop Grumman ($3.1 billion), Boeing ($1.9 billion) and 
Raytheon ($1.0 billion). The presence of four of the top five Pentagon 
contractors among the biggest gainers in contract revenue from FY2005 to 
FY2006 suggests that the story line may be “the rich get richer.” But 
the performance of other contractors among the Pentagon’s Top 10 
suggests that the story is more complicated than that.
Three of the top 10 contractors saw their Pentagon awards decrease from 
FY2005 to FY2006: General Dynamics (-.9%), BAE Systems (-16.1%) and 
United Technologies (10.0%). Another contractor, Halliburton (+5.2%) saw 
its contracts grow at a slower rate than the rate of growth for overall 
Pentagon awards.

Top Ten Defense Prime Contractors, FY 2005 to FY 2006
(in billions)

Rank and Company FY 2006 FY 2005
1, Lockheed Martin $26.6 $19.4
2, Boeing $20.3 $18.3
3, Northrop Grumman $16.6 $13.5
4, General Dynamics $10.5 $10.6
5, Raytheon $10.1 $9.1
6, Halliburton $6.1 $5.8
7, L-3 Communications $5.2 $4.7
8, BAE Systems $4.7 $5.6
9, United Technologies $4.5 $5.0
10, Science Applications
International Corp. $3.2 $2.8

Biggest Winners by Dollar Growth FY2005 to FY 2006

Companies among the Pentagon’s Top 10 weren’t the only firms to see 
substantial gains. Among mid-sized defense suppliers, the Harris 
Corporation (+$602 million) and the Renco Group (+$589 million), the 
parent company of vehicle-producer AM General,
were both among the top 10 gainers in dollar terms, as was one oil 
company, the Kuwaiti Petroleum Corp. (+$681 million). The increases for 
Renco Group and Kuwaiti Petroleum are linked to increased weaponry and 
logistics needs tied to the war in Iraq

Ten Biggest Winners by Dollar Amount Pentagon Prime Contracts FY 2005 to 
FY 2006
(in millions)

Rank and Company FY 2006 FY 2005
1, Lockheed Martin $26,620 $19,447
2, Northrop Grumman $16,627 $13,512
3, Boeing $20,293 $18,317
4, Raytheon $10,069 $9,109
5, Kuwait Petroleum Co $1,011.2 $330.4
6, Harris Corporation $1,339.1 $736.7
7, Renco Group
(AM General) $1,994.1 $1,406.3
8, Electronic Data
Systems $2,008.0 $1,450.5
9, L-3 Communications $5,197.5 $4,713.8
10, Science Applications
International Corp. $3,210.6 $2,785.9


Biggest Winners by Percentage Change, FY 2005 to FY 2006
The fastest growing firms in percentage terms from FY2005 to FY2006 were 
divided into a number of different categories. Kuwait Petroleum (#1), 
American Body Armor (#4) and the Renco Group (#7 on the strength of 
production of Humvees by its
AM General subsidiary) were all clearly linked to spending on the Iraq 
war. Defense electronics firms Harris Corporation (#6) and Thales (#9) 
fared well. Lockheed Martin, which supplies a wide range of defense 
goods and services, came in at number 8 in terms of percentage change in 
contracts. Brief descriptions of each of the firms mentioned in this 
report are included following

Ten Biggest Winners by Percentage Change Pentagon Prime Contracts FY 
2005 to FY 2006
(in millions)

Rank and Company 2006 2005

1) Kuwait Petroleum $1,011.2 $330.4
Corp.
2) Harris Corp $1,339.1 $736.7
3) Tetra Tech $493.8 $299.5
4) American Body
Armor and Equipment
(Armor Holdings) $634.9 $419.9
5) Battelle Memorial
Institute $519.1 $358.1
6) Electronic Data
Systems $2,008.0 $1,450.5
7) Renco Group
(AM General) $1,994.1 $1,406.3
8) Lockheed Martin $26,619.7 $19,447.1
9) Thales $656.9 $481.6
10) Johns Hopkins
University $524.7 $394.2

Biggest Winners by Percentage Growth During the Bush Administration 
Major contractors that have benefited the most from military spending 
increases during the Bush administration range from major weapons 
contractors like Northrop Grumman, which saw its contracts more than 
triple, to American Body Armor and the Renco Group, which had increased 
by 28 times and 13 times, respectively

Top Pentagon Contractors by Percentage Growth FY2001 through FY 2006

Rank and Company Percentage Growth in Contracts, 2001-2006
1, American Body Armor 2,747.1%
2, Thales 1,392.5%
3, Renco Group (AM General) 1,260.0%
4, L-3 Communications 950.9%
5, Electronic Data Systems 802.1%
6, Kuwait Petroleum Corp. 575.5%
7, BaE Systems 442.3%
8, Harris Corp. 251.8%
9, Northrop Grumman 222.6%

Company Profiles

The following profiles give a few examples of the military goods and 
services supplied by the major contractors identified in this report, 
drawn from company web sites, Department of Defense documents, and the 
industry press. Fuller profiles are available
upon request.
AM General is headquartered in South Bend, Indiana and produces the 
Humvee and other military vehicles, as a subsidiary of the Renco Group.
Armor Holdings, founded in 1996, is a subsidiary of American Body Armor 
and Equipment, which manufacturers protective equipment for military 
personnel. Other things that the Jacksonville, Florida-based company 
manufactures include military
helicopter seating systems, aircraft and land vehicle safety systems. In 
September 2006, Fortune Magazine listed the company as the third fastest 
growing company in the U.S. on their 100 Fastest Growing Companies list.
Battelle Memorial Institute is a non-profit science and technology 
establishment based in Columbus, Ohio. The non-profit company operates 
five nuclear laboratories under contract with the Department of Energy 
(in some cases in conjunction with other
companies), and conducts research and development on a wide range of 
systems for the Department of Defense.
Boeing’s Integrated Defense Systems is headquartered in St. Louis, 
Missouri. The company is involved in developing weapons and aircraft 
capabilities as well as intelligence and surveillance systems. Some of 
the company’s military systems include: the Apache Longbow attack 
helicopter, the F-15E Strike Eagle fighter plane, the F-18E/F combat 
aircraft, and the Joint Direct Attack Munition kit, which increases the 
accuracy of existing bombs. Boeing is also a major missile and space 
contractor.
Electronic Data Systems (EDS) is an information-technology company and 
its defense sector is based in Plano, Texas. The company offers the 
military information security systems, support for command and control 
systems, and personnel, training, and
administrative support services.
The Harris Corporation supplies communications technology for military 
satellites, missiles, and aircraft. The company is based in Melbourne, 
Florida. The Navy recently awarded the company a three-year, $66 million 
contract to create a high-speed digital
data link able to transmit many forms of data from military helicopters 
to their host surface ships.
Johns Hopkins University of Baltimore, Maryland runs the Applied Physics 
Laboratory, which has contracts in air and missile defense, national 
security space, precision engagement, and undersea warfare, among other 
programs.
The Kuwait Petroleum Company is owned by the Kuwaiti government and 
produces, refines, transports and markets oil and gas.
L-3 Communications is based in New York, NY and offers intelligence, 
surveillance and reconnaissance (ISR) capabilities to the military, as 
well as secure communications, guidance and navigation products and 
systems, satellite communications and more.
Lockheed Martin is headquartered in Bethesda, Maryland and many of its 
systems are being used by U.S. soldiers in Iraq: aircraft and munitions; 
electronic warfare and communications systems; satellites and 
shoulder-launched anti-tank weapons. Major
Lockheed Martin programs include the F-16, F-22, and F-35 combat 
aircraft; the Littoral Combat ship; and a variety of missile and space 
systems.
Northrop Grumman manufacturers the unmanned Global Hawk surveillance 
plane, which the Los Angeles, California-based company boasts was 
credited with “accelerating the defeat of the Iraqi Republican Guard, 
shortening the duration of the war and reducing casualties, exceeding 
the combatant commander's expectations.” The company is also engaged in 
manufacturing ICBMs, missile defense components and ships for the Navy.
Raytheon is based in Waltham, Massachusetts and offers integrated 
defense systems and support for intelligence systems, as well as 
hardware like missiles, guided projectiles, exo-atmospheric kill 
vehicles and directed energy weapons.
Science Applications International Corporation. The San Diego, 
California-based company has administered war games for the U.S. Air 
Force and other services, developed enhanced night vision capabilities 
and secure communications. SAIC also
trains military personnel and helps the U.S. Space Command plan, launch, 
operate, and support their military space systems.
Tetra Tech is based in Pasadena, California and provides consulting, 
engineering and environmental support services to the military and other 
customers. It has received contracts for environmental assessment, 
remediation, and support services for the
Department of Defense, the Navy, and the Air Force.
Thales is European military electronics company. Based in France and the 
United Kingdom, the company has designed radars, electronic warfare 
systems and mission computers for fighter planes, as well as land based 
systems.