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Pentagon concerned about defense industry mergers
by Ryan Maass
Washington (UPI) Oct 1, 2015


President Obama to veto defense spending bill
Washington (UPI) Oct 1, 2015 - President Obama has announced he will veto the National Defense Spending Authorization Act for 2016, drawing harsh criticism from Republican lawmakers.

Congress passed a Continuing Resolution after months of debating what the 2016 budget will look like, avoiding a government shutdown by keeping the government open until December. In the face of pressure from the defense industry and emerging security threats overseas, Republicans in Congress attempted to bypass the Budget Control Act caps by moving $90 billion into the Overseas Contingency Operations fund, which designated the funds as emergency war spending.

"That's an irresponsible way to fund our national defense priorities," White House Press Secretary Josh Earnest told reporters Wednesday. "If the president got this bill, he'd veto it."

Republican Sen. John McCain, chairman of the Senate Armed Services Committee, called the president's threat to veto the NDAA "shameful."

"The NDAA is a policy bill," McCain said in a statement. "It does not spend a dollar, and it certainly cannot raise the budget caps or deliver an agreement to fund the government. It is absurd to veto the NDAA for something that the NDAA cannot do."

Deliberations on defense spending comes as Pentagon officials voice concern over security threats in the Middle East, including the Islamic State, a Sunni militant group also identified as Daesh and by the acronyms ISIS and ISIL.

Russia began launching airstrikes in Syria, allegedly against the Islamic State, however military officials pointed out the attacks were more likely targeted against Western-backed rebels fighting the regime of Syrian President Bashar al-Assad, a Russian ally.

The Pentagon's top weapons buyer has voiced concern that major security industry deals like Lockheed Martin's purchase of Sikorsky could hinder innovation.

U.S. regulators approved Lockheed Martin's $9 billion acquisition of Sikorsky Aircraft in September, finding the deal did not violate any antitrust laws. The Defense Department did not attempt to block the deal, however Under Secretary for Acquisition Frank Kendall told reporters further moves like this could be a roadblock for both the industry and national security.

"We believe these types of acquisitions still give rise to significant policy concerns," Kendall told reporters. "The Department of Defense is concerned about the continuing march toward greater consolidation in the defense industry at the prime contractor level."

Lockheed Martin is the largest defense contractor and arms manufacturer in the world, a status the company enjoyed long before the Sikorsky deal was proposed. Their purchase of the helicopter developer marked the largest aerospace acquisition since 2012, when United Technologies purchased Goodrich Corp. for $16 billion.

"With size comes power," Kendall added, "and the department's experience with large defense contractors is that they are not hesitant to use this power for corporate advantage."

The Wall Street Journal reports Lockheed Martin is also the Pentagon's largest supplier, and this is not the first time their acquisition moves have raised concerns. The Defense Department blocked an attempt by Lockheed to acquire Northrop Grumman in 1998, also one of the world's largest defense contractors.

U.S. Defense Secretary Ash Carter echoed Kendall's sentiments to reporters on Wednesday.

"What I said then, and still believe, is that it was important to avoid excessive consolidation in the defense industry, to the point where we did not have multiple vendors who could compete with one another on many programs," Carter said.


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Previous Report
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DoD report: defense spending expected to decline
Washington (UPI) Sep 29, 2015
The U.S. Department of Defense issued it's report on Fiscal Year 2014, and says U.S. government spending for defense purposes is expected to decline, the department announced on Monday. According to the report, defense spending will fall 28 percent from FY 2015 to 2019, which followed a significant rise in defense spending by over 65 percent between FY 2000 and FY 2010. Cuts can be trac ... read more


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