UK Defence Firms Earn $60bn From Pentagon Military Contracts During Obama Presidency

6 October 2016

British companies have earned more than $60 billion from US military contracts under the presidency of Barack Obama, a major new analysis of Pentagon spending has found.

The beneficiaries range from blue chip giants BAE System, BP, Serco and G4S at one level to the more unusual, such as a Suffolk falconer who earned $2.3 million, at the other end of the scale.

They also include controversial public relations firm Bell Pottinger, which received at least $540 million to run a top secret propaganda programme in US-occupied Iraq, and the Ministry of Defence’s biological weapons research centre at Porton Down, which earned the UK $65 million in seven years.

The analysis was carried out by the Bureau of Investigative Journalism which trawled through more than 11 million publicly available transactions between the Pentagon and commercial suppliers.

They found that between January 2009 and the end of 2015, total spending by the Department of Defense (DoD) on goods and services from the private sector was more than $2.3 trillion.

The vast majority went to companies based in the US, but the Bureau’s calculations show British companies earned at least $1 in every $40 spent by the DoD.

Companies which received more than $500m in the period include:

BAE Systems  $40bn
BP $5.7bn
Rolls Royce $3.9bn
Serco Group $2.7bn
QinetiQ Group $1.8bn
Cobham Plc $1.3bn
G4S $0.8bn
Meggitt Plc $0.7bn
Ultra Electronics Holdings $0.6bn
Pearson Engineering $0.5bn

Between them, these 10 companies raked in $58 billion, the Bureau's analysis shows. Two-thirds of the overall total was spent on BAE Systems’ products from its UK and US-based divisions.

The transaction records reveal that BAE Systems’ income was from military hardware and software, while Rolls Royce's was from aircraft engines and spares. BP's $5.7bn came from fuel sales.

Outsourcing giant Serco Group raked in nearly $2.7bn from a diverse group of contracts. These included testing High Altitude Electromagnetic Pulse protection systems, used to screen sensitive electronics from nuclear detonations and radio interference.

Qinetiq Group–which was part of the Ministry of Defence before being privatised in 2001—made more than $1.8bn. High-selling systems included the Talon bomb disposal robot.

Technology firm Cobham Plc received contracts worth more than $1.3bn, including work on a Special Operations Command project identified as “hostile forces tagging, tracking and locating”.

Security provider G4S sold services at US military facilities in Guantanamo Bay and on the island of Diego Garcia, as well as in Afghanistan, Bahrain, Germany and elsewhere.

Dorset-based global engineering group Meggitt Plc was awarded contracts for aircraft parts, targeting and training systems, while Middlesex's Ultra Electronics provided submarine detection systems and acoustic torpedo countermeasure devices.

Pearson Engineering, of Newcastle-upon-Tyne, sold the Pentagon a mine-clearing system which bolts onto the front of a vehicle to trigger improvised explosive devices before the vehicle reaches them.

Martin-Baker Engineering, based in Uxbridge, received more than $400 million in contracts for its fighter jet ejector seats. The company was established in the 1930s by Sir James Martin, an engineer and inventor, and Captain Valentine Baker. Pentagon orders accounted for roughly a third of its turnover between 2009 and 2015.

Aegis Defence Services, set up by former British Army officer Tim Spicer in 2002, was awarded $335 million of work, including for security teams in Iraq. The company was bought by Canadian conglomerate GardaWorld in 2015.

Outside the big hitters, British companies have provided some other interesting goods and services to the US military.

A defensive wall system patented by Hesco Bastion, the “Concertainer”, has proved popular in Iraq and Afghanistan. Concertainer units are made of wire mesh and textile, shipped flatpacked, then filled with sand or earth at their destination. Some $194 million of sales are recorded from 2009 onwards.

One of the most niche services offered to the Pentagon by a British firm is that provided by Phoenix Bird Control, a small business owned by Keith Mutton and his family in Suffolk.

Phoenix's task is to avert multi-million dollar bird damage to US fighter aircraft taking off and landing at RAF bases in Suffolk and Gloucestershire. The military refers to this as BASH - “Bird Aircraft Strike Hazard”.

A single starling flying into a jet engine can set fire to it and potentially wreck the plane.

The birds earned the firm more than $2.3 million from the Pentagon between 2009 and 2015.

Phoenix lost the Suffolk contracts at the end of 2015 after the Defense Department changed their contracting award standards from “best value” to “lowest technically acceptable cost”. The company continues to work for the USAF at RAF Fairford in Gloucestershire.

Other smaller companies have also seen cash infusions from the Pentagon. Mil-Ken Travel Ltd, a Cambridge based coach hire company, earned $14.8 million in the period for transport services on US Air Force bases in East Anglia, while D and F McCarthy, a fruit and veg wholesaler, earned $12.4 million.

Paul Everitt, chief executive of ADS Group, the trade association for the UK’s defence industry, said: "Defence exports sustain a strong domestic industrial base, ensuring UK companies can invest in the R&D and skills necessary to provide our armed forces and security services with leading-edge equipment and technology. UK defence companies make a major contribution to national prosperity as well as security; last year the industry turned over £24bn and directly employed directly employed 142,000 people in high skill, high value jobs throughout the UK.

“The US is a major market and close ally. There are opportunities for UK defence companies, but it is a complex and competitive marketplace where home advantage counts.

”Last Sunday, the Bureau also revealed that Bell Pottinger, the PR company founded by Lord Tim Bell, received $540 million from the Pentagon between 2004 and 2011.

The money was to fund “psychological operations” to try and help win over the Iraqi population and to turn them against insurgents.

Output was said by one man who worked on the project to include fake insurgent videos containing a tracking mechanism which were then distributed throughout the country.

Lord Bell said he was “proud” of Bell Pottinger’s work in Iraq.

“We did a lot to help resolve the situation,” he told The Sunday Times. “Not enough. We did not stop the mess which emerged, but it was part of the American propaganda machinery.”

Bell Pottinger changed ownership after a management buyout in 2012 and its current structure has no connections with the unit that operated in Iraq, which closed in 2011.


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