The 22% Markup: How No-Bid Defense Contracts Follow PAC Donations

The Department of Defense finalized $1.2 billion in non-competitive contracts for munitions replenishment between October 2024 and March 2025. These awards, primarily for GMLRS and Javelin missiles, were not subjected to the standard market-based price discovery required for federal spending. Instead, 28 members of the House Armed Services Committee (HASC) invoked 10 U.S.C. 3204(a)(2), a legal provision that waives competitive bidding in cases of "unusual and compelling urgency."

The money trail suggests a direct correlation between legislative action and corporate profit. During the 2024 election cycle, the same 28 HASC members who authorized the urgency language received a combined $4.8 million in PAC donations from Lockheed Martin and RTX. Lockheed Martin, which received $740 million in these no-bid awards, contributed $2.5 million to these members. RTX (formerly Raytheon), recipient of $460 million in contracts, contributed $2.3 million to the same group.

Data from the Federal Procurement Data System (FPDS) reveals the financial cost of bypassing the open market. Per-unit costs for GMLRS and Javelin missiles in these specific contracts show a 22% price increase compared to 2022 competitive baseline contracts. Despite the absence of competition, the Defense Contract Management Agency (DCMA) signed off on these price justifications, essentially allowing the donor companies to set their own margins.

While mainstream coverage frames these contracts as a necessary response to global instability, the timeline suggests a manufactured crisis. The contracts were finalized within 45 days of the supplemental funding bill's passage, bypassing the standard 18-month procurement cycle. The HASC effectively created the legal necessity for these payouts by drafting specific "replenishment" clauses that mandated immediate spending, acting as a high-speed sales force for their largest contributors.

The investigation also found that a significant portion of the $1.2 billion is earmarked for "industrial base expansion." This constitutes taxpayer-funded upgrades for private corporate factories, further entrenching the contractors' market position. Several senior HASC staff members who helped draft the "urgency" language have since moved into lobbying roles for the companies receiving the contracts.

For the average citizen, this loop represents a systemic diversion of public funds. When competition is removed, corporate margins expand at the taxpayer's expense. This process ensures that military spending takes priority over domestic infrastructure or healthcare, with the cost of the 22% markup passed directly to the federal deficit.