The War Department is pursuing a two-track strategy to strengthen the country’s defense industrial base: locking in long-term production contracts with established weapons makers while pouring money into startups that officials say can move faster and think more creatively than the traditional defense giants.
Undersecretary of War for Acquisitions and Sustainment Michael Duffey said the department has been announcing multi-year weapons production contracts, some stretching as long as seven years. Among them are a $22.9 billion deal with Raytheon for Tomahawk missiles, a $1 billion framework with Northrop Grumman and Lockheed Martin for THAAD components, and a $58.62 billion contract with Lockheed Martin for Patriot Missile Segment Enhancements.
“I do think these are unprecedented deals,” Duffey said. “Nobody’s been able to deliver the quality and the performance that Tomahawk and the Patriot provide for our war fight.”
Duffey said the Patriot contract alone represents a major jump in output. “In the case of Patriots, it was a three-times production increase over what we were producing this past year,” he said. “We have a lot of new entrants that are bringing new great technology into the industry.”
A growing role for startups
Alongside those long-term deals with established contractors, the department is expanding its investment in newer companies through the Department of War Innovation Unit, which works with commercial firms and startups to bring new weapons and defense technology into military use. The unit’s budget has grown to nearly $1 billion in recent years.
Rep. Michael McCaul, R-Texas, said startups are likely to play an increasingly central role. “I think the startups are going to be kind of the future. The primes have their purpose. They build the big weapon systems. They build aircraft carriers. But it takes a long time to move that ship in the right direction,” McCaul said. “The startups, just like we saw in Ukraine, have this ability of innovation to move at a faster speed and a more innovative technology, more creativity in the process, out-of-the-box thinking that we desperately need for our defense industrial base.”
One company benefiting from that shift is Rocket Lab, founded in 2006, which has received more than $2 billion in government contract awards. “I would say we’ve moving up the food chain, and now we are amongst the preeminent missile and missile defense test programs in the United States,” said Brian Rogers, the company’s vice president of global launch services.
Rocket Lab has worked with the Department of War Innovation Unit to test its Haste Launch Vehicle, which the company says will help accelerate future U.S. hypersonic capabilities. “We’ve already done a number of launches,” Rogers said. “We got a lot more in the hopper, and it’s all kinds of different technology applications.”
Speeding up the build
Another firm, Castelion, says its priority is cutting down manufacturing timelines. “We believe that it’s much faster if you just go out and build the object you’re trying to build into inner manufacturing, and then you find all of the problems in that process, and you correct them,” said Bryon Hargis, the company’s co-founder and CEO. “One of the things that we based the company on is really what worked in the Apollo era when we got to the moon as a country in under a decade. A lot of those practices have fallen out of favor. We’re going back to what worked, and we’re just implementing that again.”
The War Department has struck a multi-year agreement aimed at eventually fielding Castelion’s Blackbeard Hypersonic Weapon. “It’s just the agreement to have a future agreement,” Hargis said. “If we meet those performance targets that we set out and said we could do, the department is saying they’re gonna come in and buy a tremendous amount of munitions.”
Castelion has secured $500 million in U.S. military contracts over the past 18 months and recently announced $1 billion in funding.
“The future is very bright. We have a tremendous opportunity with this administration and what the department is doing to bring in new entrants,” Hargis said. “The key thing that I think has been missing in the past decades is that we do not build enough, we do not go test enough, and they’re correcting that. And that’s going to lead to tremendous innovation in this space.”
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