Leading military contractors jacked up the price of several everyday products after receiving non-competitive contracts, costing taxpayers more than $1.3 million in apparently unnecessary markups, according to Pentagon contracting data acquired by Responsible Statecraft.
Until 2010, Boeing charged an average of $300 for a trash container used in the E-3 Sentry, a surveillance and radar plane based on the 707 civilian airliner. When the 707 fell out of use in the United States, the trash can was no longer a “commercial” item, meaning that Boeing was not obligated to keep its price at previous levels, according to a weapons industry source who spoke to RS.
In 2020, the Pentagon paid Boeing over $200,000 for four of the trash cans, translating to roughly $51,606 per unit. In a 2021 contract, the company charged $36,640 each for 11 trash containers, resulting in a total cost of more than $400,000. The apparent overcharge cost taxpayers an extra $600,000 between the two contracts.
In another case, Lockheed Martin hiked the price of an electrical conduit for the P-3 plane as much as 14 fold, costing the Pentagon an additional $133,000 between 2008 and 2015.
Jamaica Bearings — a company that distributes parts manufactured by other firms — sold the Department of Defense 13 radio filters that had once cost $350 each for nearly $49,000 per unit in 2022. The apparent markup cost taxpayers more than $600,000 in extra fees.
The examples revealed here represent only a small portion of what experts say is a pattern of contractors overcharging DoD for a wide range of parts and weapons systems, a practice that reduces military readiness and drives up spending. A recent investigation by 60 Minutes highlighted rampant price gouging in the arms industry, including one case in which Boeing overcharged taxpayers by more than half a billion dollars for missiles used in the Patriot missile defense system.
The investigation also revealed that Raytheon Technologies had raised the price of Stinger missiles from $25,000 to more than $400,000 per unit. “Even accounting for inflation and some improvements, that's a seven-fold increase,” Shay Assad, a former Pentagon acquisitions official, told 60 Minutes.
In a letter sparked by the investigation, a bipartisan group of senators called on the Pentagon to investigate allegations of widespread price gouging by contractors.
“These companies have abused the trust [the] government has placed in them, exploiting their position as sole suppliers for certain items to increase prices far above inflation or any reasonable profit margin,” wrote Sens. Bernie Sanders (D-Vt.), Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Chuck Grassley (R-Iowa), and Mike Braun (R-Ind.).
“The DOD can no longer expect Congress or the American taxpayer to underwrite record military spending while simultaneously failing to account for the hundreds of billions it hands out every year to spectacularly profitable private corporations,” they added.
Boeing declined to comment on its alleged price gouging. Jamaica Bearings did not respond to questions about the price hikes or how much it paid to procure the radio filters before selling them to the Pentagon.
Lockheed Martin did not respond to a request for comment from RS, but it told 60 Minutes that it negotiates with the Pentagon “in good faith” and said its sales to the government are “in compliance with Federal Acquisition Regulations and all other applicable laws.”
The revelations come as major arms manufacturers boast record revenues. Lockheed Martin, General Dynamics, and Raytheon Technologies have each reported all-time highs in demand following Russia’s invasion of Ukraine, allowing the companies to give shareholders nearly $20 billion last year through stock buybacks and dividends. And the CEOs of the top five weapons makers each make between $18 million and $23 million per year.
About half of the Biden administration’s $842 billion Pentagon budget request goes to contractors. In 2022, roughly 30 percent of military spending went to the “big five” weapons makers, which include Raytheon, Boeing, Lockheed Martin, General Dynamics, and Northrop Grumman.
Experts say much of that contractor price gouging has worsened over the past few decades as the military sector has experienced dramatic consolidation. In the 1990s, there were more than 50 “prime” DoD contractors capable of competing for major contracts. Now, there are only five.
In practice, this means that many contracts receive only one bid, leaving little reason for companies to offer a fair price. Opportunities for gouging are particularly widespread when it comes to smaller contracts since contractors are not required to share their costs for any deals valued at less than $2 million, as the Intercept noted last year.
As the Government Accountability Office recently reported, nearly 20,000 small businesses have bowed out of military contracting in the past decade, creating further opportunities for price hikes.
Connor Echols is a reporter for Responsible Statecraft. He was previously an associate editor at the Nonzero Foundation, where he co-wrote a weekly foreign policy newsletter. Echols received his bachelor’s degree from Northwestern University, where he studied journalism and Middle East and North African Studies.
A screenshot (right) showing a Pentagon contract for four trash cans at a cost of $51,606 per unit.
Senator Lindsey Graham had two options walking into the Doha Forum in Qatar this weekend: find a way to triangulate his full-throated support for Netanyahu policies in Israel for the largely Palestinian-supportive Muslim audience Sunday, or wave his own flag without reservation. He went with the latter.
The South Carolina Republican made it clear he was no stranger to the region — he touted a long friendship with his host the Emir of Qatar and lauded the kingdom's role as international mediator and host to America's Fifth Fleet. But he didn't bat an eye to tell this audience — thousands of Muslims assembled from across the Gulf and the broader Middle East, plus attendees from Global South nations and Europe — that the U.S. veto of the ceasefire was one of the few things he thought the Biden Administration got right.
"President Biden ...You have risen to the occasion after October the seventh," he said, addressing the audience Sunday. "I have a world of difference with President Biden on many things. But when he vetoed the ceasefire resolution, he did the right thing and let me tell you why. Every ceasefire Hamas has ever entered has been broken and we're not going to do a ceasefire until hostages begin to be released like promised and would give the Israeli military the time and space they need to make sure that Hamas ceases to be a threat to Israel and the Palestinian people."
"So as a Republican, I am standing behind President Biden's decision, that resolution and the one that comes next."
He also said the only way there will be peace in the Middle East and to get the real culprit — Iran — and to start building a state for Palestine, was for the normalization process between Arab States and Israel to continue, with the Israel-Saudi deal the icing on the cake.
"I pledge in front of the world to help President Biden secure the votes in the United States Senate to make it possible for Saudi Arabia to have a defense agreement with us, which would then make it possible for Saudi Arabia, to recognize Israel," he declared. "Before the world I pledge my support, to help reconstruct a new Palestine but none of this is possible until you have a less corrupt younger Palestinian Authority, replacing the one we have. And a Hamas can no longer wreak havoc on Israel, on their own people.”
That potential U.S.-brokered Israel-Saudi deal have been deemed all but dead after the Oct. 7 attacks in Israel. Graham contended that aside from hating Jews, Hamas launched the attacks to kill any hope for that deal to go forward. Observers have come to similar conclusions — that the so-called Abraham Accords had left the Palestinians on the cutting room floor, inciting anger among the militant elements in Gaza. But unlike Graham, these critics' hold that the agreements are the problem — that regional leaders' shouldn't have allowed Israel to shunt the peace process to the side in the first place.
Not only did Graham ignore this fatal flaw of the agreements, he reveled in his own blind spots, choosing to ignore any culpability of the Netanyahu government over the decades leading to the violence and what appears today, an endless bombardment and on-the-ground military operation in Gaza with chances for further talks between the two sides dwindling by the hour. Instead, he appeared to blame Iran for everything.
"The biggest fear of the Ayatollah is that the Arab world, in conjunction with Israel, marches toward the light away from the darkness. (Iran hates) the idea that everybody in this room can find a way to work with Israel and live with Israel where everybody makes money and can live in peace. Because let me tell you, their agenda is different than yours. So I believe we cannot let Iran win."
He said he was committed to a two-state solution, and if there was any moment in his talk where he put any responsibility on Israel it was this: "I'm going to Israel soon and here's what I'm telling Israeli friends — Saudi Arabia, Qatar, UAE, none of these Arab countries can help you. Unless you make a commitment for a two state solution. ...To my friends in Israel the best thing you can do to beat Iran is to give the Palestinians a life where they're not dependent upon terrorist organizations that they can live and work and be prosperous."
How Israelis could get there, from here, was not explained by Lindsey Graham, or whether he honestly thought that was possible given the "hell on earth" Gaza is becoming today. But we know he doesn't believe that the civilian crisis on the ground now will reduce the chances for peace tomorrow, because of the way he reacted to U.S. Defense Secretary Lloyd Austin's remarks earlier this month.
Austin said “the lesson is that you can only win in urban warfare by protecting civilians. In this kind of a fight, the center of gravity is the civilian population. And if you drive them into the arms of the enemy, you replace a tactical victory with a strategic defeat.”
“Strategic defeat would be inflaming the Palestinians? They’re already inflamed,” Graham continued. “They’re taught from the time they’re born to hate the Jews and to kill them. They’re taught math: If you have 10 Jews and kill six, how many would you have left?”
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Russian foreign minister Sergey Lavrov speaks at the 21st Doha Forum in Qatar on Dec. 10. (Vlahos)
DOHA, QATAR — In remarks Sunday at the 21st Doha Forum in Qatar, Russian foreign minister Sergey Lavrov seemed to revel in what is becoming a groundswell of international frustration with the United States over its policies in Israel. Despite Russia’s own near-isolated status after its 2022 invasion of Ukraine, Lavrov glibly characterized the U.S. as on the wrong side of history, the leader of the dying world order, and the purveyor of its own brand of “cancel culture.”
“I think everybody understands that this (Gaza war) did not happen in a vacuum that there were decades of unfulfilled promises that the Palestinians would get their own state,” and years of political and security hostilities that exploded on Oct. 7, he charged. “This is about the cancel culture, whatever you don’t like about events that led to the current situation you cancel. Everything that came before February 2022, including the bloody coup (in Ukraine) and the unconstitutional change of power … all this was canceled. The only thing that remains is that Russia invaded Ukraine.”
Lavrov, beamed in from Russia to the international audience in Doha, went fairly unchallenged, though his interviewer James Bays, diplomatic editor at Al Jazeera, attempted to corner him on accusations stemming from Russia’s own bloody record in Chechnya in the 1990s and and 2000s and its ongoing military campaign in Syria, which Lavrov noted was at the “behest” of the Syrian government.
On the issue of the failed ceasefire vote at the UN Security Council, of which Russia is a permanent veto member, Lavrov said, “we strongly condemn the terrorist attack against Israel. At the same time we do not think it is acceptable to use this (terrorist) event for collective punishment of millions of Palestinian people.” Did he condemn the United States for vetoing the ceasefire measure? “It’s up to the regional countries and the other countries of the world to judge,” he declared.
When asked if there was a “stalemate” in the Russian war in Ukraine, and what the Russians may have gained from their invasion in 2022, he said simply, “it’s up to the Ukrainians to understand how deep a hole they are in and where the Americans have put them.”
On whether a ceasefire may be in the offing in that war Lavrov said, “a year and half ago (Zelensky) signed a decree prohibiting any negotiations with the Putin government. They had the chance in March and April 2022, very soon after the beginning of the special military operation, where in Istanbul the negotiators reached a deal with neutrality for Ukraine, no NATO, and security guarantees…it was canceled,” he added, because the Americans and Brits wanted to “exhaust (Ukrainians) more.”
Lavrov gleefully piggybacked on themes from an earlier forum panel on the Global South. He accused “the United States and its allies” of building “the model of globalization, which they thought would serve them well.” But now, Lavrov contends, the unaligned are using “the principles and instruments of globalization to beat the West on their own terms.” As for Russia, Lavrov deployed a little “cancel culture” of his own, cherry picking the high points of his country's history over the last 200 years to project a nation that he boasts will emerge unscathed by Western assaults today.
“In the beginning of the 19th century Napoleon (rose European armies) against Russia and we defeated him; in the 20th century Hitler did the same. We defeated him and became stronger after that as well,” he said. With the Ukraine war, the West will find “that Russia has already become much stronger than it was before this.”
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UN Secretary General Antonio Guterres speaks in opening session of the Doha Forum in Qatar, December 10. (vlahos)
DOHA, QATAR — The U.S. veto of the UN Security Council vote for a ceasefire in the war in Gaza is being met with widespread anger and frustration by the international community and especially in the Arab world, as reflected in opening remarks at the 21st Doha Forum in Qatar on Sunday.
Addressing the forum, UN Secretary General Antonio Guterres said the vote was “regrettable…that does not make it less necessary. I can promise that I will not give up.” He said since the Oct. 7 attack by Hamas in Israel and the ensuing Israeli retaliation in Gaza, “the Council’s authority and credibility were seriously undermined” by a succession of failed votes to respond to ongoing civilian carnage on the Strip.
Sheikh Mohammed bin Abdulrahman Al-Thani, foreign minister of Qatar, said the current crisis and the U.S. reaction to it, including its thwarting of the ceasefire call (it was the only vote of disapproval; the UK abstained) was exposing the “great gap between East and West ... and double standards in the international community.” He pointed to those drawing attention to war crimes in “other contexts” (no doubt referring to Russia in Ukraine ) “hesitating to call for the end of these crimes in the Gaza strip.”
He repeatedly called for the creation of new multipolar world order that "respects justice and equality between the people where no people are more powerful than the other."
The U.S. said it did not approve the ceasefire resolution Friday because of the lack of condemnation of Hamas in the language, and that it not include a declaration of Israel’s right to defend itself. U.S. ambassador Robert Wood said halting Israel’s military action would “only plant the seeds for the next war.”
The result is that people here at the forum say they are more convinced than ever that U.S. policy is reflexively and intimately intertwined with Israel's activities in Gaza. As Mohammad Shtayyeh, prime minister of Palestine, charged, Washington has given the “greenest of green lights” to what Israel is doing on the ground. This was exacerbated this weekend with news that the Biden Administration is bypassing Congressional review to send 13,000 tank rounds to Israel. This, despite efforts by Democrats in his own party to condition the transfer of offensive weapons to prevent their use against civilians.
Meanwhile, humanitarian advocates repeatedly called the situation on the ground “unprecedented.” In an interview with Al Jazeera reporter Stefanie Dekker on the dais, Philippe Lazzarini, commissioner-general of the United Nations Relief and Works Agency, said his own organization is “on the brink of collapse.” They have lost 134 relief workers in Gaza since Israeli operations began. He described staff in silent stupefaction over the loss of homes, families. “There is no doubt a ceasefire is needed; we want to put an end to hell on earth right now in Gaza.”
Khaled Saffuri, executive director of the National Interest Foundation in Washington, told RS he was struck by the backlash against American brands in his own travels in Kuwait and Qatar over the last week, citing customer and restaurant boycotts of Coke, Pepsi, MacDonald’s, and Starbucks. “It’s horrible,” he said of the lopsided UN vote. “America is losing a lot in the Muslim world.”
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