Pentagon Contracts for Work in Europe Passed $6 Billion in FY22

Unclassified Pentagon contract spending with a place-of-performance criterion within the NATO countries of Europe increased since Russia’s invasion of Ukraine.

With a little less than a month of Defense Department procurement data for fiscal 2022 still to be reported, the total has already surpassed $6 billion. That puts fiscal 2022 at the highest value of Pentagon contract spending in the region of any of the years following Russia’s annexation of Crimea in 2014.

After $60 million obligated to DOD contracts in European NATO countries in the final days of February, procurement jumped from $619 million in March to $651 million in April. In contrast, the same two months in fiscal 2021 resulted in $502 million and $400 million.

From Oct. 1, 2021, through Feb. 23, the Defense Department obligated $2.3 billion in the region. In the time since, contracting has amounted to more than $3.6 billion.

A combination of air charter flights and logistics support procurement have resulted in $523 million since Feb. 24. Fuels and hydraulic and lubricating oils have amounted to nearly half a billion dollars in Pentagon purchases.

Germany remains the predominant destination of the European NATO counties, and nearly two out of every five procurement dollars of the fiscal 2022 total so far ended up there. Significant work has been for logistics support and professional services.

The cohort also includes the newest named members of NATO, Finland, and Sweden. DOD contract spending in Sweden overwhelmingly favors Saab AB. Its orders for anti-tank munitions in fiscal 2022 made up $103 million of the $180 million in the country as a whole. Saab’s American subsidiary, Saab Defense & Security USA LLC, added another $68 million for training and simulation work.

Significantly less money is going to contracts performed in Finland. Of the $5 million in fiscal 2022, most was for fuel and the remainder was heavily focused on ship and marine services.

To contact the reporter on this story: Amanda H. Allen in Washington at aallen@bloombergindustry.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com