Pentagon temporarily suspends signing of new military contracts, Bloomberg says
Pravda Ukraine
US Secretary of Defense Pete Hegseth has temporarily suspended new military contracts and requests for new programmes, triggering a significant response in the defence industry. This pause could last anywhere from 10 days to several months.
Source: Bloomberg, citing two sources familiar with the situation and an email sent to the editorial office
Details: The sources speaking on condition of anonymity indicated that the pause could last from 10 days to several months. The Pentagon’s decision has not yet been officially made public.
The suspension is partly due to a review of diversity, equity and inclusion clauses in contracting. The new administration is also conducting an analysis to determine priorities and optimise funding. However, the performance of existing contracts will not be affected.
The US Army confirmed the review, noting that “contracting activities continue to move forward” while providing no specific details.
“As is customary, the Army is currently conducting a review of existing solicitations and awards of contracts to ensure that our programmes are aligned with the incoming leadership’s policies and directives,” US Army spokeswoman Ellen Lovett said in a statement. “We remain committed to transparency and being responsible stewards of taxpayer dollars”.
An analysis by Bloomberg estimated the US Army’s procurement spending on unclassified contracts to be US$113.8 billion for fiscal year 2024.
Background:
- On Friday evening, 24 January, the US Senate confirmed Pete Hegseth as Secretary of Defense. The decision was made by a narrow margin, with Vice President J.D. Vance casting the decisive vote.
- Sales of US military equipment to foreign countries in fiscal year 2024 (ending 30 September) reached a record US$318.7 billion amid Russia’s full-scale invasion of Ukraine.
- Keith Kellogg, Donald Trump’s envoy for Ukraine and Russia, stated that Washington is considering purchasing American weapons for Ukraine using proceeds from frozen Russian assets.
- On 25 January, US Secretary of State Marco Rubio issued an order halting funding for most foreign aid programmes, including support for Ukraine, for 90 days.
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