Defense contractors are a vital part of the US national security infrastructure. As a result, it is essential to understand their finances and creditworthiness.
As a result of the government being their primary customer, most defense contractors have large fixed-price contracts. These contracts are well-suited to periods of low inflation.
The Development of Cutting-Edge Technologies
Defense contractors play a vital role in developing cutting-edge technologies. They create and sustain advanced weapons systems, establish and operate satellites that detect greenhouse gases, assist with climate preparedness and sustainability efforts, and produce the data that informs military operations and commercial applications.
The US government depends on these contractors to perform critical national security functions, and they are vital to the nation’s economy. Despite these essential benefits, the industry faces many challenges. Critics have raised significant concerns about the concentration of contracts among large firms, exorbitant prices for goods and services, fraud, and the “revolving door” between defense contractors and the government.
In addition, many defense companies are forced to set their prices based on cost estimates. These estimates are influenced by suppliers’ quotes, which can increase when contractors face inflationary pressures. Defense companies are also limited in their ability to pass on these rising costs to the government because they typically hold firm-fixed-price contracts.
The Enhancement of Military Preparedness
Defense contractors play a crucial role in maintaining readiness. They provide training, logistics services, and equipment to ensure that military units are equipped to meet their missions’ requirements and serve the nation’s interests.
Traditional defense contracting is a complex and highly regulated process. It is typically conducted under Cost Accounting Standards (CAS) contracts, governed by Federal Acquisition Regulations and the Department of Defense’s regulations. These contracts are often worth billions of dollars and cover the development of multi-billion dollar arsenals of weapons systems, aircraft, ships, and IT business systems.
In a time of soaring inflation and interest rates, firms face significant risk in their ability to pass along higher costs to their customers. Despite this risk, firm-fixed-price contracts, which account for most of the DOD’s contract obligations, are well-suited to periods of low inflation when input costs remain stable, and defense companies can manage their internal and external costs without raising prices.
The Enhancement of National Security
Defense contractors play a critical role in national security. They create jobs, provide research and development services, and produce various products for the military. Their work contributes to the United States’ economic growth and fosters international collaboration.
However, efforts to increase competition within the DIB have positively impacted DOD’s ability to innovate and deliver capabilities. This includes reducing reliance on a few dominant contractors and broadening the domestic defense industrial base.
The Enhancement of Economic Growth
The Department of Defense depends on private contractors to produce various goods, from jet engines and weapons to advanced technology and strategic consulting. But, while allegations of egregious contractor fraud surface frequently, there is little follow-through and a general lack of accountability that benefits major defense companies at the expense of taxpayers.
The unique needs of many defense programs require production processes, facilities, and specifications that diverge from those used in the commercial sector. The resulting pool of potential suppliers must be more significant to sustain competition. As a result, the market for these products tends to consolidate and be dominated by a few firms, imposing long-term sourcing commitments on the government.
It had been a long time since I ran a 5K about four years to be exact. The last 5K I ran was in March 2009. It was the Big Ten Hoops 5K. We were training for some Spring races. Lindsey was going to do Boston and I was going to Kentucky Derby. I ran a 19:35.
Flash forward, 4 years and I was really wanting to run a 5K again. I had planned on running one out in Brownsburg the other weekend but then ended up going to the Pearl Jam at Wrigley Field…so that 5K was out.
Lindsey had told me about the Carmel Road Racing Group 5K Summer Series a couple weeks ago. She is doing some PR work on the side for Todd and CRRG and it seemed like a great idea. $10, a measured course, a chipped time, and an afterparty.
The 1st one was last Thursday @ 6:40. Do you want to hear my race review? It sucked! It was hard. It was humid. My legs hurt. It hurt. I ran a 17:40. I had grand illusions that I would be able to break 17…haha that is funny. I had done a 5×1 mile repeat workout the week earlier nailing the repeats in 5:25 or so I thought sub 17 would be fine. WRONG!!! Running is funny like that. Somedays it works, somedays it does not. Coming into to the race, I had raced Eagle Creek four days earlier and did a nine mile tempo run the day before…so yeah I was in prime racing shape. Not sure what I was thinking there. Apparently I am delusional.
I must say though it is a great series. Cheap, fun course (not fast…but fair), cool swag, beer samples…did I mention cheap?
Here are some pics from me suffering last week. Terry Fletcher from Indiana Trail Running was out taking pics…they are amazing! Hopefully he’ll be out for all the races.
|This might be the coolest pic EVER
|Race Start. The two guys in matching jersey’s won Lindsey BoMF relay last year. Team Honey Badger
|Thinking this won’t be bad
|My back looks huge. Clock time was 17:36…my watch said 17:40
|Wrong. End of Suffering. Somehow I won.
The next race in the series is next Thursday, August 22nd. I’ll be racing again…and hopefully on fresh…at least fresher legs this time. I am going to take that shot at 17 again. I think I can get it with some good legs.
Oh and since I did not post this last night….as Lindsey said I could not. Per Blogging 101 you can’t post two in a day. It is our Anniversery today! 5 years! Happy Anniversary Lindsey! Crazy! Awesome. Can’t believe its been 5 years already…we have a kid. We are adults now. I wouldn’t trade the last 5 years for anything! Wonder if she will take me somewhere nice tonight?
Questions: Do you like racing shorter distances? 5K? 10K? What do you think about midweek races? Do you have a series like this near you? Where should we go to dinner?