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Soul Searching Sole Contracts

By Patricia L Johnson

SUNDAY, A DAY OF REST IN THE U.S…..

President Bush states there is not going to be a timetable for removing our troops from Iraq, while Secretary of Defense Rumsfeld acknowledges it may take up to 12 years to get rid of the insurgency.

That obviously is the reason why United Defense L.P., York, PA was awarded five contracts on June 23, 2005 totaling $1,055,386,155, that’s BILLION with a capital B. If the war in Iraq is going to be never ending, we may as well get prepared for the long haul and prepared we shall be.

The ONE BILLION dollars in contracts issued in one day to United Defense L.P. consists of the following:

Remanufacture of Bradley A3 vehicles 896,373,950
Remanufacture of Operation Desert Storm vehicles 78,378,300
Remanufacture of M7 Bradley Fire Support Team Vehicles 31,444,479
Commander’s independent viewers 30,563,160
A3 associated stockage list spares 18,626,266
--------------------------------------------- -----------------
TOTAL ------------------------------------- $1,055,386,155

SOURCE: U.S. DEPARTMENT OF DEFENSE

The work on the contracts was scheduled to be split as follows:

83% of the work to be performed in York, PA 875,970,509
5% of the work to be performed in Aiken, SC 52,769,308
8% of the work to be performed in San Jose, CA 84,430,892
4% of the work to be performed in Fayette, PA 42,215,446
------------------------------------------------------ -----------------
------------------------------------------------------ $1,055,386,155

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SOURCE: U.S. DEPARTMENT OF DEFENSE

The two things I found interesting about the contracts awarded to United Defense is all five were sole-source contracts initiated March 1, 2005. [A sole-source government contract is one that is awarded without full and open competition].

The second item of interest is the date of issue. The contracts were awarded on June 23, 2005, and a day later BAE Systems announced the acquisition of United Defense Industries. Following is an excerpt from BAE’s news release

“…To enable BAE Systems to better serve its customers, the company is merging its existing land systems activities in the U.K., Sweden and South Africa with United Defense, to form a new BAE Systems Land and Armaments operating group. The business, headquartered in the U.S….”

Although the news release states the Land and Armaments operating group will be headquartered in the U.S. it does not necessarily mean the work will be performed in the U.S.

Will the 83% of contract work originally scheduled to be performed in York, PA be executed in York, or will this work be performed at an overseas plant belonging to BAE Systems?

United Defense had sales of 2.292 billion in 2004. The five DoD contracts awarded June 23, 2005 total 1.1 billion, or ½ their annual sales for last year. Apparently the advantage of being a sole-source supplier for the U.S. Department of Defense is unprecedented growth.

Although United Defense has been around since World War II it wasn’t until 1987 that it was purchased by the Carlyle Group. The Carlyle Group is a Washington D.C. based private equity investment firm. Carlyle has approximately 800 investors in 55 countries and more than $29 billion of equity capital. The Carlyle Group is well known for the number of politicians affiliated with the group, including James Baker III, former U.S. Secretary of State, George H.W. Bush, former U.S. President, Frank Carlucci, former U.S. Secretary of Defense, John Major, former British Prime Minister, and the list goes on and on.

BAE is the world’s fourth largest defense contractor and is based in the U.K. It was formed in 1999 through the merger of British Aerospace and Marconi Electronic Systems. Marconi Electronic Systems is the defense unit of The General Electric Company in the U.K. [not to be confused with General Electric in the U.S.]

Now that United Defense is part of BAE, does the U.K. now become the sole-source supplier in the future?

We are dealing with insurgents that make improvised explosive devices and hide them under watermelons in the back of pick-up trucks. The United States is considered a world superpower, yet our own Secretary of Defense claims we will not be able to stop the insurgency for years to come?

Is the war in Iraq about liberating the people of Iraq, or is the war in Iraq about continued profits for big business?

Wake up America and pay attention - no one is going to care if your tax dollars and future jobs are shipped out of country, if you don’t.

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© 2005 Patricia Johnson

Patricia Johnson is a freelance writer and CEO of Articles and Answers. Visit us online at www.articlesandanswers.com

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