Defense contractors eye long-term profits from Ukraine war

As Russia’s attack on Ukraine drags on, the world is dealing with a lot of uncertainty. At every stage, predictions about the war have done poorly when met with the cold, hard reality of modern conflict. But one thing has been certain from the start: the U.S. defense industry is going to cash in.

A recent example of this came last week when Sens. Jack Reed (D-R.I.) and Jim Inhofe (R-Okla.) proposed a new amendment to this year’s National Defense Authorization Act. The proposal would give the Department of Defense wartime powers that would free it to buy huge amounts of artillery and other munitions using multi-year contracts, according to Defense News.

Here’s the important part: the amendment would also authorize the Pentagon to skip competitive contracting for Ukraine-related deals (including billions of dollars worth of contracts to refill U.S. stockpiles), and it would waive other provisions aimed at stopping weapons makers from overcharging taxpayers.

As an unnamed congressional aide told Defense News, the move would allow contractors to produce far more than Ukraine needs. Instead, we’re buying for a two-front war. “It’s hard to think of something as high on everybody’s list as buying a ton of munitions for the next few years, for our operational plans against China and continuing to supply Ukraine,” the source said.

In other words, lawmakers and defense contractors are taking advantage of Ukraine to get their weapons wish list, according to Bill Hartung of the Quincy Institute.

“It's part of the larger push to exploit the war in Ukraine to jack up Pentagon spending for things that have nothing to do with defending Ukraine, or any likely future scenario,” Hartung said.

As Defense News notes, the “proposed legislation also authorizes contracts for 20,000 AIM-120 Advanced Medium-Range Air-to-Air missiles, which Ukraine has not fired extensively – if at all.” The package also includes purchases of several other missiles that seem to go far beyond Kyiv’s wish list.

Notably, it’s unclear whether these weapons would actually be useful in the case of a U.S.-China war. 

“It’s building stockpiles for a major ground war in the future,” Mark Cancian of the Center for Strategic and International Studies told Defense News. “This is not the list you would use for China. For China we’d have a very different list.”

In related news, Lockheed Martin announced Tuesday that it plans to expand its production of the High Mobility Artillery Rocket System — better known as HIMARS — by more than 50 percent. The decision follows months of positive publicity for the weapons system, which seems to have sparked increased interest from governments in Eastern Europe.

The announcement comes just a month after the Army said it wanted to double HIMARS production and triple production of certain types of artillery in response to the war in Ukraine. This type of boost would require new or at least dramatically expanded production facilities, raising concerns that it will be difficult to scale back down in the future.