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Pentagon awards $30 million contract to boost processing of rare earth elements
WASHINGTON — The U.S. Defense Department awarded a $30.4 million contract to boost domestic processing of light rare earth elements as part of an effort to become less dependent on China for critical technologies, the department announced Monday,
The Pentagon awarded the funds to Lynas Rare Earths Limited, the world's largest rare earth element mining and processing company outside of China. The firm will use the funds to open a processing facility in Hondo, Texas, through its U.S. subsidiary, Lynas USA.
The award is part of a broader push by the department to secure its rare earth supply chain, which is threatened by China's dominance in the industry, and move more production to the United States. China is the top producer of rare earth metals, which are a critical piece of defense systems like satellites or the F-35 fighter jet.
“The significance of the award is they [the Defense Department] are continuing to march forward and put the pieces of the puzzle back in place so the U.S. will have access to rare earth [elements] to meet national security needs,” said Jeffery Green, president of J.A. Green & Company, a government relations firm that works with the defense industry.
If the project is successful, Lynas would be the producer of about a quarter of the world's rare earth oxides, or processed rare earth elements. Increasing domestic production of the metals is critical because they are so widespread.
“You'll find these things in almost every major defense system,” Green told C4ISRNET.
To counter Chinese dominance, the Pentagon in recent years took steps to bring domestic rare earth production back to the United States. According to Reuters, in April last year the department funded the construction of a Lynas heavy rare earth metals facility in Texas, which it built through a joint venture with Texas-based Blue Line Corporation.
In November 2020, the Pentagon announced three Defense Production Act awards with rare earth element producers worth more than $12.5 million in total. The Defense Department's actions on rare earth elements stems from Executive Order 13817, a Trump administration document directing the government to adopt a strategy for critical minerals.
“This award aligns with the U.S. government's strategy to ensure secure and reliable supplies of critical minerals under Executive Order 13817 and follows a series of rare earth element actions the Department of Defense has taken in recent years to ensure supply and strengthen defense supply chains,” the department's announcement stated.
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Contract Awards by US Department of Defense – October 23, 2020
AIR FORCE AMI Industries Inc., Colorado Springs, Colorado, has been awarded a $700,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the delta qualification, production and fielding of a next generation ejection seat for various Air Force Mission Defense systems. Work will be performed in Colorado Springs, Colorado, and is expected to be completed Oct. 22, 2030. This award is the result of a sole-source acquisition. Fiscal 2020 research, development, test and evaluation funds in the amount of $5,200,000 are being obligated at the time of award. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8606-21-D-0001) L-3 Technologies, Greenville, Texas, has been awarded a $9,090,496 firm-fixed-price modification (P00008) to contract FA8620-18-F-4816 for management support services. The contract modification provides for the exercise of a pre-priced option for additional management support services. Work will be performed in Greenville, Texas, and is expected to be completed Dec. 31, 2021. This contract involves 100% Foreign Military Sales (FMS), and is the result of a sole-source acquisition. The total face value of the contract is $40,316,767. FMS funds in the full amount are being obligated at the time of the award. The 645th Aeronautical Systems Group, Wright-Patterson Air Force Base, Ohio, is the contracting activity. DEFENSE LOGISTICS AGENCY American Posts LLC,* Toledo, Ohio, has been awarded a maximum $30,000,000 firm-fixed price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for fence posts in various sizes. This was a competitive acquisition with one response received. This is a two-year base contract with three one-year option periods. Location of performance is Ohio, with an Oct. 23, 2022, ordering period end date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E6-21-D-0025). Bell Boeing Joint Project Office, California, Maryland, has been awarded an estimated $27,897,619 firm-fixed-price requirements contract for removal, repair and replacement of V-22 spindle bearings. This was a sole-source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a four-year contract with no option periods. Locations of performance are Maryland and Texas, with an Oct. 23, 2024, performance completion date. Using military services are Marine Corps, Navy and Air Force. Type of appropriation is fiscal 2021 through 2025 Navy and Special Operations Command operations and maintenance funding. The contracting activity is the Defense Logistics Agency, Aviation, Philadelphia, Pennsylvania (SPRPA1-17-D-009U). UPDATE: Federal Contracts Corp., Tampa, Florida (SPE8EC-21-D-0070), has been added as an awardee to the multiple award contract for agricultural equipment, issued against solicitation SPE8EC-17-R-0007, and was awarded June 12, 2020. WASHINGTON HEADQUARTERS SERVICES Guidehouse LLP, McLean, Virginia, has been awarded a $15,697,724 firm-fixed-price, labor-hours, and time and material contract. The operation support services contract provides audit and data analytics support to the deputy chief financial officer of the Office of the Under Secretary of Defense (Comptroller). Fiscal 2021 operations and maintenance funds in the amount of $15,697,724 are being obligated at the time of award. The expected completion date is Oct. 25, 2025. Washington Headquarters Services, Arlington, Virginia, is the contracting activity (HQ0034-19-A-0017). ARMY Mississippi State University, Mississippi State, Mississippi, was awarded an $11,131,723 modification (P00030) to contract W56HZV-17-C-0095 for simulation-based reliability and safety virtual prototyping of autonomy-enabled ground systems. Work will be performed in Mississippi State, Mississippi, with an estimated completion date of Oct. 22, 2022. Fiscal 2020 research, development, test and evaluation (Army) funds in the amount of $11,131,723 were obligated at the time of the award. The U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2393050/source/GovDelivery/