The United States of Lockheed Martin

Editor's note: How much more of this obscenity are the American people are going to tolerate? In the UK No Tax For War argues that ordinary citizens are being forced to finance endless foreign wars through taxation without meaningful public consent. The movement promotes peaceful civil resistance, political pressure, and organized opposition to military spending, claiming taxpayers should not bankroll wars that fuel civilian suffering and global instability. Supporters believe Americans should replicate similar anti-war movements and tax reform as frustration grows over trillions of public dollars flowing into overseas conflicts while economic circumstances continue deteriorating in the US.
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Lockheed's new Pentagon deal makes a bad bargain worse

A new contracting arrangement shifts even more risk from the weapons manufacturer to the American taxpayer

By Joseph Solis-Mullen | May 12, 2026

In a recent earnings call Lockheed Martin described what may prove to be a highly consequential shift in Pentagon contracting.

CEO Jim Taiclet outlined a new "commercial-like" arrangement with the Department of Defense under which Lockheed would receive compensation even if the government altered procurement plans or reduced anticipated production quantities. Presented as a mechanism for stabilizing supply chains and accelerating weapons production, the arrangement effectively transfers additional market risk from the weapons maker to the taxpayer.

In practice, the new model appears to guarantee that Lockheed can expand production capacity with reduced exposure to the kinds of commercial uncertainties that normally discipline private firms. At a moment when Washington is once again invoking great-power competition to justify extraordinary military expenditures, the arrangement deserves scrutiny.

Far from a simple contracting innovation, the new approach represents another step in the long evolution of America’s military-industrial system towards an ever more corporatist order in which profits remain private while risks fall on the public.

Since World War II, Pentagon procurement has operated through a variety of contract structures designed to balance speed, innovation, and cost control. During wartime mobilization, "cost-plus" contracts became commonplace because they allowed rapid industrial expansion without requiring firms to shoulder uncertain financial risks. Under a cost-plus arrangement, contractors are reimbursed for expenses and then paid an additional fee or profit margin. The logic was straightforward: if the government needed ships, aircraft, or missiles quickly, firms had to be assured they would not be ruined by unforeseen production costs.

In practice, however, the model institutionalizes perverse incentives by allowing firms to profit from rising costs rather than containing them. Cost overruns, schedule delays, and expanding program scope become part of the business model itself. Indeed, a 2005 Government Accountability Office report found that the Pentagon had paid contractors an estimated $8 billion in award and incentive fees "regardless of acquisition outcomes," despite chronic performance failures across major acquisition programs. (A limited audit conducted in 2024-25 suggests the problem very much persists.)

In the decades after 1945, procurement reforms periodically attempted to reintroduce market discipline through fixed-price contracts, competitive bidding, and tighter oversight. Even so, the defense sector remained structurally insulated from many normal commercial pressures because its primary customer was, and remains, the federal government itself.

The arrangement now described by Lockheed appears to move a step further. Rather than merely reimbursing firms for production costs, the Pentagon is effectively offering guarantees against changes in future procurement decisions. In other words, if Lockheed expands manufacturing capacity or restructures supply chains in anticipation of large orders, the government may compensate the company if those plans later change.

As Taiclet put it in the earnings call: "If, for whatever reason, the government decides the production rate won't be as high in year five, six, or whatever, or there is a change in Congress that changes how this agreement can be appropriated, then there are reach-back or clawback mechanisms to make the company whole."

Please go to Responsible Statecraft to read more about this latest obscenity. 

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The obscenity continues:

House To Force Vote on Bill to Give Ukraine $1.3 Billion in Military Aid

U.S. Army Dark Eagle Hypersonic Missile Moves Toward Combat Deployment Under $2.7B Leidos Contract.


The US congress to force a vote to hand over more loot to Ukraine when the place is being pillaged wholesale:

Zelenskyy's Former Right-Hand Man Yermak Arrested In $10.5 Million Money Laundering Scheme

Right, Americans need a "Golden Dome". A dome should be constructed over Washington DC and the Pentagon then seal the place off from the rest of the world:

Trump's 'Golden Dome' Would Cost $1.2 Trillion

Here's a better idea: Shut the government down.

Senate unanimously advances resolution suspending senators’ pay during shutdown