The Investigative Journal’s weekly read of federal contract awards, grant disbursements, and oversight findings — built from public records on USAspending.gov, agency pages, and Government Accountability Office (GAO) work products.
1. GAO finds federal agencies booked $186 billion in improper payments in FY 2025
The Government Accountability Office’s latest payment-integrity report landed on the desk of every appropriator in late April and is shaping the week’s spending debate. Agencies self-reported an estimated $186 billion in improper payments for fiscal year 2025, a $24 billion jump from the prior year. Roughly $153 billion — about 82 percent — were overpayments, money that went out the door but should not have. The figure is drawn from 64 programs across 15 agencies, according to GAO-26-108694.
Records suggest the bulk of the total is concentrated in five programs. Medicare accounted for an estimated $57 billion and Medicaid for $37 billion, with the Earned Income Tax Credit, SNAP, and the Shuttered Venue Operators Grant program rounding out the top categories. Centers for Medicare & Medicaid Services fact sheets indicate the Medicaid jump is largely attributable to eligibility-redetermination errors as states unwound COVID-era continuous-enrollment rules.
The cumulative tally since FY 2003 is now roughly $3 trillion in identified improper payments, GAO writes, and the agency notes the true number is “likely much higher” because not every program reports an estimate. The figure is not a measure of fraud, but it is the federal government’s most consistent yardstick for payment-control failures — and it has now ticked upward for the second consecutive year.
2. Navy modifies RTX contract to $833 million for ESSM Block II missile production
The Department of War’s daily contract announcements for May 8, 2026 included a notable follow-on modification: an $833 million award to RTX Corporation (formerly Raytheon Technologies) for additional production of RIM-162 Evolved Sea Sparrow Missile (ESSM) Block II assemblies and launch canisters. The award expands an existing Navy contract and is funded primarily out of FY 2026 Navy weapons procurement, with allied contributions flowing through the Foreign Military Sales channel.
Filings indicate the order will be split between the U.S. Navy and eleven allied navies — Australia, Belgium, Canada, Denmark, Germany, Greece, the Netherlands, Norway, Portugal, Spain, and Turkey — with deliveries running through 2030. RTX’s Tucson, Arizona facility leads the work, with partner sites in Canada, Australia, and Europe handling the balance under co-production arrangements that have characterized the ESSM line for two decades.
The deal continues a steep ramp in surface-to-air missile procurement that began after 2023’s Red Sea air-defense expenditures and accelerated through last year’s European replenishment orders. Compared with the $525 million ESSM Block II contract RTX received earlier in the program, this week’s award is roughly 59 percent larger in dollar terms, reflecting both higher unit costs and a larger allied pipeline. Records published on USAspending.gov will eventually show the obligation broken out by FMS country.
3. Pentagon stacks $200 million awards to four AI labs for “agentic” systems
Documentation surfaced this spring confirming that the Defense Department’s Chief Digital and AI Office (CDAO) issued four parallel ceiling agreements — reportedly $200 million each to xAI, OpenAI, Google, and Anthropic — to develop “agentic” artificial-intelligence systems capable of interpreting classified data and executing actions with limited human-in-the-loop intervention. The four-way award structure mirrors the cloud-services model used in the Joint Warfighting Cloud Capability (JWCC), under which the Pentagon spreads risk and creates competitive pressure across vendors.
Industry reporting and aggregated contract tracking place the four awards inside a broader DOD commitment of more than $32 billion in contract ceiling for AI, cloud, cybersecurity, and data-analytics programs during the first half of FY 2026. Critics on Capitol Hill have raised questions about how task orders will be priced against the ceilings and whether the Pentagon has the in-house technical staff to evaluate model performance independently of the vendors themselves.
For taxpayers, the practical question is what gets delivered. Ceiling awards do not equate to outlays; the actual money flows only when task orders are issued. The next data point to watch is the first wave of agentic-AI task orders against the new ceilings, which agency sources indicate will move in the back half of the fiscal year.
4. Army’s $5.6 billion Missionforce enterprise SaaS award sets a Pentagon record
The Army’s Missionforce contract — a $5.6 billion enterprise software-as-a-service vehicle — is now formally the largest enterprise SaaS award in Defense Department history, according to a recent G2Xchange contract roundup. The vehicle consolidates licensing, identity, and platform services that have historically been procured across hundreds of smaller contracts.
The award structure resembles the “tiered-ceiling” arrangements the Air Force has experimented with for cybersecurity, including a $120 million zero-trust deployment contract awarded to General Dynamics Information Technology for 187 global bases covering more than one million users. Consolidation of that scale offers obvious efficiency benefits — one negotiation instead of many — but it also concentrates risk: a single performance failure, a single price-escalation clause, or a single security incident can ripple across the entire enterprise.
Oversight bodies have not yet published a comprehensive assessment of Missionforce execution. Filings on USAspending’s agency profiles are the right place to track task-order velocity against the ceiling.
5. Palantir’s stacked ceilings now exceed $10 billion across the IC and Army
Public award databases and industry tracking indicate Palantir Technologies now holds more than $10 billion in cumulative federal contract ceiling across its Army data-consolidation agreement, Project Maven, the Open Distributed AI/Inference Reference (Open DAGIR) program, and intelligence-community work. Stacked-ceiling arrangements of this scale are unusual for a single mid-cap vendor and warrant continued tracking, particularly as Congress weighs whether to extend or restructure Maven.
The pattern raises a familiar question for procurement watchers: how much of the $10 billion is obligated versus simply available to obligate. Records suggest a non-trivial portion remains unobligated headroom, meaning the company’s reported government revenue understates its long-term federal footprint. We will track quarterly modification notices on USAspending to provide a fuller picture in subsequent editions.
6. FEMA disbursed $137 million in mitigation funding to 20 states and territories
The Federal Emergency Management Agency announced more than $137 million in mitigation funding in late April for projects across 20 states and territories, with $16.39 million specifically targeted to Maine, Nevada, Pennsylvania, and Texas for post-wildfire and post-storm mitigation. FEMA characterized the awards as part of a larger three-day announcement window that put more than $1 billion into disaster recovery and mitigation pipelines.
The disbursements sit on top of the $36.5 billion disaster supplemental appropriations Congress passed earlier this cycle, of which $18.7 billion flowed to the FEMA Disaster Relief Fund. Records indicate the remainder included $2 billion for Commerce-Justice-Science, $2.5 billion for State-Foreign Operations, and $8 billion for Transportation-HUD.
FEMA’s grant cadence has been disrupted at points in this fiscal year, including during a brief Department of Homeland Security funding gap earlier in 2026, and the agency’s ability to push obligations through state pass-through entities remains a binding constraint on how fast emergency dollars reach communities.
7. Department of Energy locks in $2.7 billion in HALEU and LEU enrichment contracts
The Department of Energy’s Office of Nuclear Energy awarded $2.7 billion in contracts for high-assay low-enriched uranium (HALEU) and low-enriched uranium (LEU), the largest single investment to date in re-establishing domestic enrichment capacity. The awards followed years of policy debate about U.S. dependence on Russian-origin enriched uranium and are designed to seed a private-sector industrial base for advanced reactor fuel.
In the same period, DOE finalized smaller awards including $52.8 million in nuclear research and workforce grants to 46 projects and a $49.7 million safety-training package to 10 university-led programs. Both reinforce the administration’s posture that nuclear is a core component of the FY 2026 energy mix. Funding-opportunity announcements on energy.gov show further nuclear R&D dollars closing in the coming weeks.
The HALEU award structure includes performance milestones rather than fixed deliverables, which is appropriate given the technical risk but makes after-the-fact accountability harder. Oversight bodies should plan now for a multi-year follow-up review.
8. CDBG steady at $3.3 billion; SBA entrepreneurial programs at $330 million
Beneath the headline awards, the FY 2026 enacted funding levels for two long-running formula-grant streams hold steady. The Community Development Block Grant program remains at $3.3 billion, distributed to states under a statutory formula that weighs population, poverty incidence, overcrowded housing, and housing age. The Small Business Administration’s entrepreneurial development programs total $330 million, including $41 million for Microloan Technical Assistance, $27 million for Women’s Business Centers, and $5.3 million for Native American Outreach.
Level funding in nominal dollars implies a real-terms decline given persistent inflation in housing and small-business services. State and tribal grantees should price that into their planning. The HHS TAGGS portal and Grants.gov award search remain the most direct way for the public to confirm specific awards to individual jurisdictions.
Patterns to watch
Three patterns warrant deeper investigation as the week ends.
First, the $186 billion improper-payments figure does not align with the volume of recovery action that follows. Filings indicate that recovery audits and clawback programs typically recoup a small fraction of identified overpayments each year. The gap between identification and recovery is itself a story, and one that should drive next-quarter reporting.
Second, the stacking of mega-ceiling vehicles — Missionforce, JWCC, the four agentic-AI awards, and Palantir’s portfolio — concentrates Defense Department spend in a small number of prime contractors. The procurement-integrity questions that follow are not novel, but the scale is. Independent benchmarking of task-order pricing against commercial comparables would be a constructive next step.
Third, the $2.7 billion HALEU/LEU award is the leading edge of what Congress and the executive branch have telegraphed as a multi-year reindustrialization push. If the milestones slip, the schedule for the first wave of advanced reactors slips with them — and so do the export-market commitments embedded in the broader U.S.-allied energy posture.
Spending Watch will return next Tuesday. Source documents are linked above; readers are encouraged to verify dollar figures and dates against the primary materials on USAspending.gov, War.gov, the GAO reports portal, and the relevant agency press pages.
— Eduardo Bacci, The Investigative Journal