THE SET-UP: On Wednesday, Elon Musk and Vivek Ramaswamy revealed their plans for the “Department of Government Efficiency” (DOGE) in a Wall Street Journal Op-Ed. Yesterday, Oversight Committee Chair James Comer (R-KY) announced the creation of a “DOGE” subcommittee. It will be chaired by Marjorie Taylor Greene (R-GA) and it’s tasked with the same mission Elon and Vivek assigned to themselves—to root-out government “waste, fraud and abuse.”
As I noted on Wednesday, the motherlode of government waste, fraud and abuse is the Pentagon. It’s budget is bloated with redundancies, bad accounting, overbilling, cost overruns and chronic delays. It dwarfs the combined military budgets of China and Russia. And it includes programs and weapon systems the Defense Department did not request, but continue to get funding because a Representative or Senator has constituents at home whose jobs depend on the Pentagon’s budget.
Military Keynesianism … the infusion of government spending into manufacturing weapons and military gear … generates well-paid jobs and sustains many a Congressional district. And “many” is the operative word. Defense dollars are routinely spread around the country. That largesse produces a lasting, widespread constituency for increased defense spending. It’s why the F-35—arguably the Pentagon’s greatest boondoggle—continues to be funded by lawmakers like Sen. Bernie Sanders (I-VA), despite year after year of technical glitches, failed fixes and operational failures.
Just this week the Project On Government Oversight published another report on the chronic, Keystone Cops-like failure of the F-35’s production pipeline. Among other snafus, the Autonomic Logistics Information System (ALIS) kept telling maintenance crews to fix things that were not broken. That, in turn, disrupted maintenance on the high-maintenance plane and ground crews were forced to develop work-arounds to avoid wasting time spent on wild goose chases. And that’s just the latest addition to the F-35’s laundry list of costly problems. When I say “costly,” I mean costly.
Here’s the headline from a Government Accountability Office (GAO) report from May of this year: “The F-35 Will Now Exceed $2 Trillion As the Military Plans to Fly It Less”.
Yup. Two trillion, with a “T” … and “plans to fly it less.”
If ever there was an opportunity to excise waste, fraud and abuse … the F-35 program is it. But what are the odds that DOGE will take on Lockheed’s flying ATM machine? Or the odds that Vivek will fire a significant portion of the Defense Department’s 770,000 employees? Or that Elon will review the government’s contracts with his tech bro brothers-in-arms at Anduril or Palantir … or his own government gravy train to the stars?
No, DOGE is unlikely to take on the bloat in the defense budget … or the dozens upon dozens of Representatives and Senators whose careers depend upon bringing home the Pentagon’s bacon, a.k.a. “pork.” Nor is it likely that Elon will force Peter Thiel or Palmer Luckey to pull their snouts out of the trough he shares with them.
Instead, he’s being given an unprecedented opportunity to remove regulations that get in the way of his business interests. He’ll claim that he’s “saving” America from “unelected” bureaucrats, but he and his “unelected” bros will be rolling around in the government’s sty like pigs in shit. - jp
TITLE: Led by Anduril, defense tech funding sets a new record this year
https://techcrunch.com/2024/11/20/led-by-anduril-defense-tech-funding-sets-a-new-record-this-year/
EXCERPTS: Defense tech funding just reached a new high. Defense tech startups have raised almost $3 billion so far in 2024, according to Crunchbase. This surpassed the previous record from 2022 of $2.6 billion.
It’s an impressive feat, especially considering the number of deals has shrunk: in 2022, there were 113 defense tech rounds, outpacing 2024’s 85 rounds.
The record is buoyed by a few monster rounds this year, like weapons manufacturer Anduril, which raised a $1.5 billion Series F in August, and Saronic Technologies, an autonomous maritime vehicle company founded by Anduril alumni, which raised a $175 million Series B this year. Additionally, defense infrastructure startup Chaos Industries raised a $145 million Series B this month.
The defense tech boom shows no sign of abating: Defense investors and founders are reportedly expecting the new White House administration to provide even more opportunities for startups offering new technologies in everything from space and aeronautics to weapons and surveillance tech.
“The close relationships between [vice president-elect] Vance, Elon and the defense VC and startup ecosystem will create a huge opening for real defense acquisition reform and widening of the number of players,” Nathan Mintz, co-founder of electronic warfare startup CX2, told Forbes.
TITLE: Palantir becomes a ‘Trump trade’ as investors bet on higher defence spending
https://www.ft.com/content/f583fa72-858f-418e-b17c-67cad1f2c10a
EXCERPTS: Palantir has added more than $23bn to its market capitalisation since Donald Trump was elected US president this month, as investors bet the secretive government contractor will be among the biggest winners of enhanced federal spending on national security, immigration and space exploration.
Palantir, which was founded by technology veterans including Peter Thiel, Joe Lonsdale and Alex Karp in 2003, helps governments and corporations collate and analyse vast troves of data to identify complex patterns and construct detailed intelligence that can be used to improve their operations.
The US government is its largest client. Agencies from the CIA and National Security Agency to the armed forces and police have deployed its systems to track down terrorists, stop hackers, deport illegal immigrants and charge financial fraudsters. Palantir’s technology was used to kill al-Qaeda leader Osama bin Laden, distribute the Covid-19 vaccines and convict financier Bernard Madoff.
Investors are betting that Palantir is well-positioned for higher government spending on defence under Trump.
“Trump is going to be a man on a mission, especially in Israel and Ukraine,” said Roger Monteforte, chief executive of Forte Capital Group, a Palantir investor. “Palantir is going to be a pivotal player.”
He added that the company was one of a “trifecta” of “Trump trades” — stocks that stand to gain from their proximity to the new administration — alongside Elon Musk’s electric-car maker Tesla and Palmer Luckey’s autonomous weapons start-up Anduril, a private company whose shares have rocketed in secondary market trading.
Although the president-elect has vowed to control federal spending, Musk has said more defence spending should be allocated to “entrepreneurial companies” rather than traditional defence prime contractors.
Musk’s personal interest in space exploration, through his rocket builder SpaceX, could also benefit Palantir. In June, Palantir joined a consortium called Starlab that will launch a commercial space station later this decade to serve Nasa and other space agencies, as well as commercial customers, as a successor to the International Space Station.
“Palantir has two levels of alignment with the new administration,” said Gil Luria, a software analyst at DA Davidson. “Its founders are within the inner circle of influence with the administration. The other alignment is ideological. Palantir has a clear mission to protect western civilisation, and that aligns very well with the philosophy of the incoming administration.”
Thiel, Palantir’s chair, has been one of Trump’s biggest allies in Silicon Valley and has been the main backer of the political rise of vice-president elect JD Vance. However, Thiel turned down a request by Trump to donate to his campaign this election cycle.
TITLE: Space Force eyes SpaceX’s Starship for future rocket cargo delivery missions
https://defensescoop.com/2024/11/21/spacex-starship-rocket-cargo-space-force-military/
EXCERPT: Chief of Space Operations Gen. Chance Saltzman observed the Starship’s sixth test flight from the company’s Starbase facility in Texas on Tuesday, with SpaceX founder Elon Musk and President-elect Donald Trump also in attendance. The 400-foot-tall reusable launch vehicle comprises SpaceX’s Super Heavy booster and Starship spacecraft, giving it much larger payload capacity than any other rocket available today.
Although the launch vehicle’s development is critical for NASA’s plans to resume missions on the moon and exploration of Mars, the Space Force is also tracking Starship for military applications — notably for logistics missions, Lt. Gen. Philip Garrant, commander of Space Systems Command (SSC), told reporters Thursday.
“We are thinking about how we might use it. We think the first, most logical, given the payload volume, … would be some type of rocket cargo delivery mechanism,” Garrant said during a roundtable hosted by the Defense Writers Group. “[We are] absolutely interested in the potential military utility and definitely following their progress.”
The Space Force recently took the helm of the Air Force Research Lab’s experimental Rocket Cargo Vanguard program, renaming the effort Point-to-Point Delivery (P2PD). The concept seeks to use commercially available rockets to quickly launch military supplies to anywhere on Earth, including non-traditional landing pads both near structures and in remote locations.
In its budget request for fiscal 2025, the service asked for $4 million dollars to “support the detailed engineering design necessary for a P2PD service provider to perform airdrop payload delivery,” with the goal to support U.S. Transportation Command’s resupply missions, according to justification documents.
Garrant also pointed to the rocket’s potential to launch a large number of satellites into low-Earth orbit (LEO) — where both the government and commercial space industry are expected to put massive constellations of hundreds of platforms — as a “game changer.”
SEE ALSO:
Artemis: NASA awards SpaceX and Blue Origin with key contracts for lunar landers
https://www.openaccessgovernment.org/artemis-nasa-awards-spacex-and-blue-origin-with-key-contracts-for-lunar-landers/185299/
Anduril Gets Nearly $100M Space Contract
https://www.ocbj.com/defense-2/anduril-gets-nearly-100m-space-contract/
Anduril Wins $200M C-UAS Deal for USMC’s MADIS Air Defense System
https://thedefensepost.com/2024/11/21/anduril-madis-air-defense/