US Contractors Hunker Down

January 28th, 2005 - by admin

George Raine / San Francisco Chronicle – 2005-01-28 22:48:51

SAN FRANCISCO (January 28, 2005) — The Department of Defense awarded $230.7 billion in prime contracts in fiscal 2004, $21.7 billion more than in fiscal 2003, the government said Thursday.

Lockheed Martin Corp., with $20.7 billion in contracts, leads the list of the 100 companies receiving the largest dollar volume of prime contract awards. The Boeing Co. is second with $17.1 billion and Northrop Grumman Corp. is third with $11.9 billion.

Bechtel Corp., based in San Francisco, is 15th on the list, with $1.7 billion in contracts. Bechtel projects include chemical demilitarization, biological weapons proliferation prevention and nuclear weapons safety, and space and missile defense projects. Bechtel, whose reconstruction work in Iraq has made it the Bay Area’s most visible defense contractor, moved up from 22nd place on the 2003 list, when it contracted for $910.3 million worth of business with the Pentagon.

Danielle Brian, the executive director of a watchdog group that has monitored defense spending trends for decades, the Project on Government Oversight, in Washington, said the report is “more of the same with less oversight.”

“This is a huge jump,” she said of the increased spending during the last fiscal year. “There is more and more money being spent, in some cases on more critical functions, and there is less oversight.”

While there has been an increase in spending, Congress has become more complacent and “it’s harder and harder for auditors get to the nuts and bolts of what is being spent,” said Brian.

Tenth on the list is Humana Inc., the health benefits provider. It is the recipient of $2.4 billion in contracts. A Defense Department spokesman, Glenn Flood, said Humana establishes clinics and other health care facilities and provides related services and logistics on military bases, but not with its brand, and therefore its presence is less obvious than other defense contractors.

Dick Cheney’s Former Firm Stays in the Top Ten
Lockheed Martin, headquartered in Bethesda, Md., has some 8,500 employees in the Bay Area, 7,000 of whom are at the Lockheed Martin Space Systems Co. in Sunnyvale. Many of these workers are involved with the design, production and integration of satellites for communications, remote sensing and navigation. Lockheed Martin also topped the list in 2003.

Halliburton Co., sixth in 2004 and seventh in 2003, was awarded $8 billion in contracts. The company has been criticized for poor record-keeping on its Iraq reconstruction work, and the company’s Iraq contracts were a major debate topic during the presidential race because Vice President Dick Cheney was chief executive of the Houston energy services company before becoming President Bush’s running mate.

Fluor Corp., an engineering, procurement and construction company in Aliso Viejo (Orange County), also working in Iraq, received $549.9 million and is 52nd on the list.

Parsons Corp. in Pasadena, an engineering and construction company doing work in Iraq, is in 34th place with $809 million. Builder Perini Corp. of Framingham, Mass., working in Iraq, is in 59th place with $444.5 million.

Perini Corp. is partially owned by the investment firm of California Sen. Dianne Feinstein’s husband, Richard Blum, who controls Perini shares through his investment firm, Blum Capital Partners. Another of Blum’s investments, the San Francisco engineering firm URS Corp., is in 36th place on the list, having received $803.8 million.

Top Contractors

The Department of Defense has listed the 100 top contractors it awarded grants to in fiscal 2004, for a total of $230.7 billion. San Francisco’s Bechtel is No. 15. The top 10 recipients are:

1. Lockheed Martin Corp., $20.7 billion

2. Boeing Co., $17.1 billion

3. Northrop Grumman Corp., $11.9 billion

4. General Dynamics Corp., $9.6 billion

5. Raytheon Co., $8.5 billion

6. Halliburton Co., $8 billion

7. United Technologies Corp., $5.1 billion

8. Science Applications International Corp., $2.5 billion

9. Computer Sciences Corp., $2.4 billion

10. Humana Inc., $2.4 billion

15. Bechtel Corp. $1.7 billion

Source: Department of Defense

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