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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Uwharrie   😊 😞
Number: of 19824 
Subject: Re: OT: Dividends for Defense Contractors
Date: 01/08/26 3:30 PM
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We've done some limited business with the Federal government over the years. It is not easy for a small company to do business with the Federal government. As has been written, the defense equipment industry has compressed into only a few companies. Despite copious regulations written to encourage small, minority and women owned businesses to do business with the Department of Defense (War?), it is near impossible to actually make that happen. This results in small companies having to partner with the big companies. Note: The big defense contractor companies do not care about the factors of importance to the small companies. The procurement system massively favors the big companies despite the small company, women owned, minority owned language. Yes, the language is there, but the purchasing mechanism has hoops and catches that ultimately drives procurement to big companies. You could say the government and its staff simply prefer to work with big companies and this has been borne out by the DoD pushing to reduce the number of major suppliers over the past thirty years.

There is another business in our town manufacturing wonderful passive heating/cooling materials. I put 220,000 Btus of their material in my attic 15 years ago together with other home improvements and have enjoyed comfort and low utility bills. This company proved via evaluations at an Army base in Iraq how their material could enable one diesel generator to cool two (2) Army tent structures in place of what was then one diesel generator per one (1) tent structure in Iraq/Afghanistan. A major contributor of deaths involved fuel supply transport groups being annihilated by IEDs in their path. Had the tents been equipped with their passive material, the tent cooling fuel usage would have been halved in Iraq. The upshot was this business was a sub-supplier to an intermediate business who was in turn a supplier to one of the major defense contractors and despite the evaluation being a success, the major defense contractor wanted to keep the larger project perpetually "going" resulting in the local company's product being put aside for using project dollars to do something else that kept larger overall project on-going. Their material was never implemented for Army tents in hot desert locations. It makes me angry every time I think of this situation.

At any rate, we (the USA) appear to be boxed into a tough situation with these large defense contractors wanting to keep the status quo while innovation around the globe is sprinting ahead making low cost offensive weapons that can be built in the thousands. Low cost threats built in the thousands do not appear to fit the corporate aims of the big defense contractors. It may be terrifying to see where this all leads in the future.

Uwharrie
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