The Investigative Journal’s weekly review of federal contract awards, grant disbursements and budgetary anomalies that warrant public scrutiny. All figures verified against Department of War contract notices, USAspending.gov records and Government Accountability Office filings.
1. Electric Boat lands $2.3 billion submarine pre-construction modification
The single largest contract action this week came on May 11, when Naval Sea Systems Command awarded General Dynamics Electric Boat Corp. a not-to-exceed $2,305,530,000 undefinitized contract action modification for long-lead-time material and early manufacturing work on Virginia-class Block VI attack submarines. According to the Department of War contract announcement, $1.97 billion of the obligation is drawn from fiscal 2026 shipbuilding and conversion (Navy) funds, with another $150 million pulled forward from fiscal 2025 balances. Work is spread across 16 states and is expected to run through September 2035.
Pre-construction awards of this size are not unusual for the Virginia program, but the “undefinitized” structure — meaning final price, quantity and scope are still being negotiated while obligation begins — has long been flagged by the GAO as an area where cost growth can compound silently. The Block VI variant introduces a larger Virginia Payload Module and updated combat systems, and Block V predecessors have already drawn watchdog scrutiny over schedule slippage at the prime yards.
Records indicate the obligation will not expire at the end of the current fiscal year, giving the contractor latitude on cash flow but also reducing congressional visibility into burn-rate decisions. Filings suggest this modification, taken alongside the broader Columbia-class ballistic missile submarine program, will keep undersea shipbuilding among the most capital-intensive line items in the FY2026 defense budget.
2. RTX wins $833 million for ESSM Block II air-defense missiles
Naval Sea Systems Command on April 30 awarded Raytheon Technologies (RTX) an $832,997,256 follow-on modification for production of RIM-162 Evolved Sea Sparrow Missile (ESSM) Block II all-up rounds and launch canisters, with deliveries running through 2030. Data shows the award will supply the U.S. Navy along with 11 NATO Sea Sparrow Consortium navies — Australia, Belgium, Canada, Denmark, Germany, Greece, the Netherlands, Norway, Portugal, Spain and Turkey — under an existing cooperative production agreement.
Public reporting indicates the Block II variant adds an active X-band seeker enabling terminal “fire-and-forget” homing, a capability the Navy has accelerated in response to Houthi anti-ship missile and one-way attack drone barrages in the Red Sea over the past two years. According to trade press coverage, roughly 12 percent of the work is performed at RTX’s Tucson, Arizona, missile facility, with the remainder distributed across consortium partners.
The contract represents one of the larger naval munitions buys of the fiscal year and reflects a sustained push to refill expended interceptor inventories. With FY2026 the first full year of reconciliation-backed defense topline increases, ESSM Block II is likely to face additional follow-on orders before 2030.
3. Lockheed Martin’s $407 million Aegis modification — and the Guam build-out
On May 7, the Missile Defense Agency awarded Lockheed Martin Corp. a sole-source $407,164,441 modification to the Aegis Ballistic Missile Defense Weapon Systems contract to continue engineering, development and certification work on Integrated Air and Missile Defense capabilities for the Aegis Guam System. The award, posted in the May 8 Department of War contracts release, raises the cumulative ceiling on the underlying HQ0851-21-C-0002 contract from $1.53 billion to $1.94 billion.
The Guam defense architecture is one of the most consequential new procurement lines of the decade — a 360-degree integrated air-and-missile-defense shield designed to protect Andersen Air Force Base and Naval Base Guam against the People’s Republic of China’s intermediate-range ballistic missile arsenal. The program is also flagged on the GAO’s watch list given the compressed schedule, the integration complexity across Aegis, THAAD and Patriot elements, and the sole-source posture on key software work.
Records suggest the obligated fiscal 2026 RDT&E funds total roughly $76.2 million at award, with additional procurement money attached. The pacing question — whether deliveries match the announced 2027–2029 fielding ambition — remains the program’s central oversight risk.
4. $307 million Marine Corps satellite contract goes to single offeror
The Space Systems Command Commercial Space Office on May 8 awarded Inmarsat Government Inc. a $307,102,288 ceiling firm-fixed-price contract for global commercial satellite connectivity supporting the Marine Corps Enterprise Commercial satellite services requirement. Contract documents indicate the buy spans multi-orbit, multi-band capacity through March 2031.
The transaction is striking for one detail buried in the announcement: although the contract was “a competitive acquisition,” one offer was received. In an industry that has seen low-Earth-orbit entrants like SpaceX’s Starshield and Amazon’s Project Kuiper aggressively bid for government work, a sole-offer award of this scale warrants scrutiny over whether solicitation timing, throughput specifications or security requirements effectively narrowed the field.
Only $3,257,694 in fiscal 2026 operations and maintenance funds was obligated at award against the $307 million ceiling, which is typical for indefinite-delivery vehicles but limits early-stage congressional visibility into actual draw-down rates.
5. CACI captures $113.7 million Military Sealift Command IT recompete
CACI Inc. — Federal won a $113,760,906 firm-fixed-price and cost-plus-fixed-fee contract on May 8 to support Military Sealift Command’s Integrated Business Systems through October 2031 if all options are exercised. The award was a full-and-open competition with four proposals received and replaces work previously performed under a separate vehicle.
MSC’s Integrated Business Systems portfolio underpins logistics, finance and personnel tracking for the Navy’s auxiliary and sealift fleet — a function quietly stressed during the Red Sea convoy operations of 2024 and 2025. Continuity of these back-office systems has tangible operational consequences, and the new five-and-a-half-year ceiling reflects MSC’s effort to lock in stability after several years of bridge contracts.
The award is one of several recent IT services consolidations across the Navy enterprise, and the cost-plus-fixed-fee component on portions of the work means actual outlays will warrant continued tracking in DPAP records through the option years.
6. Applied Research Associates draws $111.5 million for Naval Research Lab HPC work
On May 8, the U.S. Naval Research Laboratory awarded Applied Research Associates Inc. a $111,500,000 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for research and development at the Center for High Performance Computing, with a concurrent $14.68 million initial task order. Filings indicate the ceiling will fund work primarily at NRL’s Washington, D.C., facilities and is sourced from a mix of Defense-wide and Navy RDT&E lines plus working capital funds.
HPC contracts are often unflashy but consequential: classified modeling and simulation underwrite hypersonics, undersea acoustics and electromagnetic spectrum programs. The cost-plus-fixed-fee structure transfers cost risk to the government, which is appropriate for genuinely exploratory R&D but creates the conditions for scope creep if task-order discipline is weak.
The award was competitively procured via SAM.gov with three offers, which represents healthier competition than the Inmarsat sole-offer line above.
7. GAO: $186 billion in improper payments in FY2025 — and likely understated
The Government Accountability Office reported on April 28 that 15 federal agencies estimated approximately $186 billion in improper payments across 64 programs in fiscal year 2025 — a $24 billion increase from fiscal year 2024. According to GAO-26-108694, overpayments accounted for roughly $153 billion, or 82 percent of the total, with Medicare ($57 billion), Medicaid ($37 billion), the Earned Income Tax Credit ($21 billion), the Supplemental Nutrition Assistance Program ($10 billion) and the Shuttered Venue Operators Grant Program ($10 billion) topping the list.
Nineteen programs reported error rates above 10 percent; six exceeded 25 percent. GAO explicitly notes the figure is an undercount: programs such as Temporary Assistance for Needy Families are excluded, and several agencies that previously reported did not file estimates this cycle. The Department of Health and Human Services attributed the Medicaid increase to eligibility-redetermination problems and provider-screening gaps as COVID-era flexibilities are wound down.
For context, the $186 billion improper-payments tally is roughly 20 percent larger than the FY2026 enacted topline for the entire State Department and USAID combined. GAO’s High-Risk List analysis suggests that over the past two years, sustained agency action in flagged areas has produced about $84 billion in financial benefits — meaning the gap between recognized error and recovered dollars remains the central accountability story in federal financial management.
8. FEMA opens $1 billion BRIC application window — second consecutive cycle
The Federal Emergency Management Agency on March 25 opened the application window for the combined FY2024 and FY2025 Building Resilient Infrastructure and Communities (BRIC) program, making $1 billion available to states, local governments, territories and Tribal Nations for pre-disaster mitigation against fires, floods, earthquakes and hurricanes. According to the FEMA announcement, the application deadline is July 23, 2026.
BRIC was restructured following 2025 administrative reforms that re-prioritized cost-share posture and state capacity-building. Records suggest the FY2024 tranche had been held in suspense for much of the year — meaning this combined cycle effectively releases two appropriations cycles’ worth of mitigation dollars at once, a pattern that warrants tracking as states navigate compressed application timelines.
FEMA simultaneously announced an additional $1.1 billion in flood-focused funding opportunities. Together the awards will be a leading indicator of whether the agency’s post-2025 reorganization has restored grant-cycle throughput.
Patterns worth watching
Undefinitized actions are accumulating. Between the Electric Boat submarine modification and the Lockheed Aegis Guam award, more than $2.7 billion in obligations this week sit inside contract vehicles whose final scope is not yet fixed. Data shows this is increasingly common for high-priority programs, but the practice merits sustained oversight given GAO’s longstanding warnings about cost growth on undefinitized work.
Sole-offer competitions on competitive solicitations. The $307 million Inmarsat satellite award attracted only one bid despite being structured as competitive. Filings indicate this is not unique — the pattern recurred several times in April contract announcements — and points to a structural question about whether requirements documents in commercial-satellite, IT-services and HPC procurements are being written in ways that narrow the realistic offeror pool.
Improper payments versus enforcement capacity. The $186 billion FY2025 improper-payments figure is rising as inspector-general staffing across HHS, USDA and Treasury remains under pressure. The mismatch between the scale of recognized error and the agencies’ capacity to recover it is the spending-integrity story most likely to define the back half of FY2026.
The Investigative Journal will continue tracking these contracts through option exercises and definitization milestones. Tips on specific contract actions can be sent through our editorial contact form.
Sources: USAspending.gov | Department of War Contracts | GAO Improper Payments Report (GAO-26-108694) | FEMA BRIC Announcement | GAO High-Risk Series