As America steps up its offensive against the Islamic State, big defense contractors including several Washington-area companies are likely to see new contracts, analysts say.
President Obama is asking Congress for an additional $5.6 billion to fight the militant group. A large share of the money, if approved, would be given to the Pentagon to train and equip Iraqi forces, while a smaller portion would be reserved for the State Department.
The request would significantly expand the country’s campaign against the Islamic State, also known as ISIS, which controls territories in Iraq and parts of Syria. Last week, President Obama also authorized Defense Secretary Chuck Hagel to double the number of troops currently stationed in Iraq.
Defense contractors are watching closely to see whether Congress will grant the White House’s request or, as some analysts expect, add to his request.
The big defense companies that manufacture weapons are likely to receive orders to help the military replenish its stocks, analysts said.
That includes Falls Church giants Northrop Grumman and General Dynamics, as well as Raytheon and Boeing, said Roman Schweizer, a defense policy analyst with Guggenheim Securities.
For example, the budget request includes up to $45.5 million for the purchase of Tomahawk missiles and $9 million for Maverick missiles, both of which are manufactured by Raytheon.
Smaller munitions makers such as Arlington’s Alliant Techsystems could also reap orders as a result of the funding request, Schweizer said.
More broadly however, the budget includes funding requests for operations and maintenance of military bases, as well as classified operations and research and development.
That could potentially boost business for services companies such as Arlington’s DRS Technologies, or contractors that work in the field of intelligence, said James McAleese, founder of Sterling-based McAleese & Associates, a government contracts consultancy.
Services contractors have seen a big drop in business over the past two years because of the drawdown in Afghanistan.
In the long term, the biggest procurement for services contractors could stem from the $1.6 billion requested for the Iraq Train and Equip Fund, Schweizer said.
The fund would be used to provide training at multiple sites throughout Iraq for approximately 12 Iraqi brigades, according to the White House.
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