Boeing

 

Darkmarks: Are largest defense contractors benefiting from programmatic requests?

Virginia Class Submarine Of the roughly 1,040 Pentagon procurement programs--the $99.3 billion part of the Defense budget devoted to purchasing new equipment--some 212 of them, worth $21.4 billion, fund the work of a single company.

The Army wants $551 million to buy surface-to-air missiles from Lockheed Martin. The Navy wants to spend $157 million the aerospace giant's KC-130J tanker plane. The Air Force has $291 million worth of JASSM missiles on its wish list. Altogether, defense procurement programs worth $6.9 billion name Lockheed Martin as their sole contractor. And they're not the only one: 14 companies, including Boeing, Raytheon and Northrop Grumman, were the only contractor listed on programs totaling $100 million or more.

Congress is now in the midst of its secretive spending process, with members of the Appropriations Committees of the House and Senate considering programmatic and language requests submitted by their colleagues--increases or decreases in the amount spent, or changes in emphasis in each program in the federal budget. Unlike an earmark, which directed money to a single, named recipient, a programmatic request refers only to a specific program in the the federal budget.

Some requests ask for additional funding for programs with hundreds of thousands of individual beneficiaries like loans and other aid for low income housing. And some requests can benefit a handful of contractors, or even just one.

Defense Appropriations Subcommittee Chairman C.W. "Bill" Young, R-Fla., instructed colleagues to "include the applicable account and line number in the beginning of the program request description (i.e. RDTE A Line 30)." That particular account refers to the Army's Research, Development, Test and Evaluation budget; line 30 is for medical advanced research, which, according to the Army's budget justification documents for the program, includes 8 separate projects ranging from treating combat injuries to breast cancer.

In contrast, line 4 of the Navy Procurement budget refers to advanced funding for Virginia Class submarines. The Navy's budget justification lists Connecticut-based Electric Boat, a subsidiary of General Dynamics, as the prime contractor (four other companies--Kollmorgen, Lockheed Martin, BAE Systems and Stanley Associates, provide components for the submarine). In 2012, during the last round of Pentagon budgeting, one of the company's home state lawmakers, Sen. Richard Blumenthal, included that line item in his programmatic requests, which he disclosed online. Blumenthal requested an additional $777.6 million to expedite work on an additional submarine. The Navy's current budget justification notes that "Advance Procurement includes $778M required to fund the 2nd FY14 SSN as proposed as a FY13 Congressional Add."

Chances are Blumenthal wasn't the only member of Congress who requested the additional funding. But because neither the Senate nor the House discloses programmatic requests, it's impossible to say how many other members of Congress added their names to the request for additional funding for the Virginia Class Submarine.

Programmatic and language requests can direct hundreds of millions of dollars to programs that benefit a specific company. But unlike earmarks, many of which went to obscure firms like Kuchera Defense Systems, companies that have their own programs are generally among the biggest defense contractors. Lockheed Martin, for example, is the sole contractor listed for procurement programs totaling a proposed $6.9 billion, an increase of $1.3 billion over the programs' budget in the last fiscal year. Boeing is the sole contractor listed on $5.8 billion worth of programs, a drop of $95 million from last year. Raytheon was listed on $2.2 billion worth of programs, Northrop Grumman for $1.7 billion, and United Technologies for $1.2 billion. Not every dollar budgeted for those programs will go to those contractors--part will pay for oversight of the project within the military and other expenses, some will go to subcontractors, but if the Pentagon buys an extra submarine, or ups the number of replacement engines for the Joint Strike Fighter it acquires, the firm that provides those items will benefit accordingly.

In the first quarter of 2013, all five companies have disclosed lobbying on the procurement budget (to see the disclosures for Lockheed Martin, click here and here; for Boeing here and here; for Raytheon here, for Northrop Grumman here and for United Technologies here).

To view or download a complete list of Pentagon procurement programs that list only one recipient in the budget justification, click here. The data comes from a spreadsheet we downloaded from the Comptroller of the Defense Department; we looked up each line item in the procurement budget justifications--available from the Army, Navy, Air Force and Defense Department--to look for contractor names. As always, if you find errors, please contact us and let us know. Note: We only looked in the procurement budget for Defense, so this by means exhausts the number of federal programs that primarily benefit one company.

To read prior posts on darkmarks, click here and here.

U.S. Navy photo by Chris Oxley.

Top government contractors spend less than a penny on politics for every dollar at stake in sequester

With the sequestration deadline rapidly approaching, one set of companies has more at stake than any other, at least in terms of sheer dollars: big government contractors.

By our count, the ten biggest government contractors would stand to lose roughly $13.6 billion in contracts if the across-the-board 9.4 percent cuts to discretionary defense spending cuts were applied equally across their 2012 contract award amounts. Compare that to the $115 million they spent on lobbying and campaigns, and that investment in politics starts to look like a bargain.

And if that political investment helps to avoid the proposed cuts and keep these companies' contracting revenues stable, that would amount to a 125-to-1 return for these 10 companies, on average.

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The Pentagon's Big Contractors Lobby Big and Get in Big Trouble

Recently, the Pentagon released the list of its top 10 contractors for 2010, all which spent significant amounts of money lobbying Congress and contributing large sums to federal campaigns last year and in 2009.

Boeing—while only the second biggest contractor in terms of money received—spent the most money lobbying Congress between 2009 and 2010 at almost $35 million, according to the Sunlight Foundation’s Influence Explorer.

Northrop Grumman was second, spending $30 million.

The biggest contractor, Lockheed Martin, came in third for those same years spending $26 million lobbying.

Corporation 2009-2010 Contributions 2009-2010 Lobbying money Total contractor misconduct cases Number of contractor misconduct cases that were defense contracts
LOCKHEED MARTIN CORPORATION $2,674,654 $25,950,000 67 25
THE BOEING COMPANY $3,082,455 $34,746,000 47 20
NORTHROP GRUMMAN CORPORATION $1,836,746 $30,920,000 33 17
GENERAL DYNAMICS CORPORATION $1,457,799 $21,003,664 15 4
RAYTHEON COMPANY $2,196,725 $14,100,000 22 13
OSHKOSH CORPORATION $283,855 $2,140,000 0 0
L-3 COMMUNICATIONS HOLDINGS INC. $557,282 $9,900,000 11 7
UNITED TECHNOLOGIES CORPORATION $1,261,335 $22,630,000 16 6
BAE SYSTEMS PLC $922,785 $9,377,000 8 1
SAIC INC. $943,550 $6,390,000 11 5
TOTAL $15,217,186 $177,156,664

 

Also noteworthy is the number of misconduct cases filed against each contractor, which usually results in fines to be paid by the contractor. All of the top ten names listed except OshKosh, as reported by the Project on Government Oversight, have had multiple cases filed against them with at least some violations incurred while working as contractors for the Department of Defense.

For instance, Science Applications International Corporation (SAIC) has five cases of misconduct as a Defense contractor, but has 11 cases total on record dating back to 1995, also according to data made available by Influence Explorer. For the five cases where SAIC was a Defense contractor, the company paid out $6.6 million.

In Norm Dicks' Name

New contribution disclosure rules provide some transparency in the world of "soft" influence seeking. In this case, these disclosure rules require the disclosure of contributions made "in honor of" a covered official, a lawmaker, executive branch or military official. A Seattle Times article looking into these contributions in honor of Washington state lawmakers shows Rep. Norm Dicks, a senior member of the Defense Appropriations Subcommittee, as a frequent honoree for contributions made by corporations seeking defense contracts.

Boeing gave $10,000 earlier this year to one of Congressman Norm Dicks' favorite charities, the National Guard Youth Foundation. So did Boeing's archrival, EADS, the parent company of Airbus. But that's small change compared to another defense contractor, TriWest Healthcare Alliance, which gave $100,000 to the youth foundation's gala dinner in February honoring Dicks, a Bremerton Democrat, for his staunch support of the charity. TriWest followed that up with a $50,000 contribution to another charity event hosted by Dicks and four other members of the powerful defense-appropriations subcommittee that doled out $459 billion in contracts this year.

Giving money to a charity favored by a lawmaker isn't quite like giving to their campaign committee, but it will likely gain you brownie points when money for your business is on the table. In this case, the desire to influence behavior, while denied by all parties involved, is plain as day for anyone looking from the outside.

Keith Ashdown of Taxpayers for Common Sense is quoted in the article saying, "There's nothing outrageous at all about giving to something that helps a National Guard entity ... I think it's a soft lobbying tactic that can make lawmakers think you're in their camp and loyal to their interests."