“This building is not empty, it’s full of opportunity,” a sign on another block’s storefront read.

But 10 minutes away, the Highland Industrial Park was bustling and its parking lot full as some of the nation’s largest defense contractors — Lockheed Martin, Aerojet Rocketdyne and General Dynamics — manufactured solid-rocket motors, missiles, launchers and other weapons systems that proved critical to the U.S. military and are now front and center in Ukraine.

Camden has long depended on the defense industry. For example, since 1980 Lockheed Martin has locally built its M270 Multiple Launch Rocket System — a tracked rocket launcher that can carry a dozen rockets or missiles. A mural featuring the system covers the entire back of a building in downtown.

Now the Lockheed facility is manufacturing the High Mobility Artillery Rocket System as quickly as it can.

The HIMARS — which carriers fewer rockets and missiles than its predecessor, the M270, but is more nimble — is attracting worldwide attention for helping Ukraine fend off Russian invaders. And it has put Camden’s bustling defense industry in the spotlight.

Ukrainian President Volodymyr Zelenskyy said the launcher made a “huge difference” in liberating critical areas of the country under Russian occupation. Late last year he presented a medal from a HIMARS officer to U.S. President Joe Biden.

The Arkansas Chamber of Commerce has named HIMARS “the coolest thing made in Arkansas,” beating out more widely known products like Cheetos.

And Lockheed in recent months won nearly half a billion dollars in new contracts to build HIMARS and guided rockets for Ukraine. That’s a sizable number, considering Arkansas exported $1 billion of defense and aerospace goods in 2020.

Local officials are hopeful expansion at Lockheed and dozens of other defense contractors in Camden’s Highland Industrial Park, driven by the demand for weapons for Ukraine, will lead to growth in their region.

The state’s Chamber of Commerce anticipates Ouachita County, home to Camden, will see an influx of new employees — up to 1,000 total — at defense firms. In the meantime, state, local and industry officials are weighing how to best recruit and retain these employees.

Hot, cold, and hot again

The M270 has a long legacy in Camden. Building off that, Lockheed in the 1990s developed HIMARS as a lighter, more mobile rocket launcher. The U.S. military first fielded the new system in 2010, but didn’t stay in production long. The Army and Marine Corps wrapped up their orders in 2013, and the production line in Camden went cold in 2014.

But it wasn’t long before Lockheed needed it again. In 2015, the U.S. State Department approved the United Arab Emirates to buy 12 systems along with accompanying missiles in a $900 million deal. By 2017, HIMARS production was underway again.

Still, it was more complicated than simply restarting the production line, according to Becky Withrow, director of business development for the company’s tactical missiles portfolio, based in Grand Prairie, Texas. The previous HIMARS launchers were built using a U.S. government-provided chassis; this time, Lockheed had to build the system from the ground up.

Lockheed expected to manufacture the launchers for the UAE and then stop the line, she said. But in 2018, the U.S. Army named long-range precision fires one of its six modernization priorities, and the service chose the HIMARS launcher to support a new long-range missile in development, the Precision Strike Missile, with a range beyond 310 miles. The Army in 2019 awarded Lockheed a contract, valued at roughly half a billion dollars, to build more launchers.

To accommodate the UAE and the new orders for the U.S. Army, which now plans to buy 545 total launchers for about $3 billion, Lockheed took over a former diaper factory close to other buildings it owns within the Highland Industrial Park.

The contractor originally planned to build four launchers a month, but is now able to produce six in that time.

Ramping up

HIMARS first arrived in Ukraine in summer 2022. The U.S. has committed 38 HIMARS to the country as part of more than $30 billion in security assistance to Ukraine, according to the Pentagon, and 20 have already arrived.

Lockheed anticipates it will begin delivering the remaining 18 launchers in two-and-a-half years, according to Jay Price, vice president of precision fires for Lockheed Martin’s Missiles and Fire Control business.

In Ukraine, “we see HIMARS as a game changer,” U.S. Army Chief of Staff Gen. James McConville said in January. “If you look at our portfolio … and we take a look at the [Precision Strike] Missile, which is going to ride on HIMARS, I would argue those are going to be very effective in future conflict.”

In August 2022, Ivan Fedorov, mayor of the southern Ukrainian city of Melitopol, reported Ukrainian forces had used HIMARS weapons to kill more than 100 Russian soldiers in an August attack. He said Russian air defense units were not able to counter those rocket attacks. However, Defense News was unable to independently verify this.

By November, Ukraine had used HIMARS to weaken Russian-controlled terrain and capabilities. Zelenskyy said HIMARS was critical in liberating Kharkiv in eastern Ukraine as well as Kherson, a port city in the south that Russia occupied for eight months.

The foreign operators of the system now include Romania, Jordan and Singapore. Poland, Estonia, Lithuania, Latvia and the Netherlands are signed up to become owners in the coming years.

In Ukraine, the HIMARS weapon has become a symbol of strength; Zelenskyy, while visiting Biden in December, gave him a cross for military merit awarded to and offered by a captain of a HIMARS rocket unit.

In February, when Biden visited Kyiv, Zelenskyy asked for longer-range munitions like the Army Tactical Missile System, which HIMARS can launch. Lockheed Martin’s ATACMS assembly line is open, but the U.S. has not publicly announced any intention to send the weapon to Ukraine.

Lockheed Martin is now preparing to produce eight HIMARS a month in Camden by the third quarter of 2025, Price said.

The contractor won a $431 million U.S. Army contract in December to produce HIMARS launchers with the aim of rapidly replenishing the stocks of the U.S. and its allies and partners who sent arms to Ukraine. That came after a November deal from the Army worth $14.4 million to increase production capacity for the HIMARS line.

And the company received a $521 million deal in November 2022 to replenish Guided Multiple Launch Rocket System stocks, also supplied to Ukraine. GMLRS weapons are produced in one of the original World War II-era ammunition depot buildings on the Highland property.

Lockheed, which has about 1,000 employees in Camden, plans to hire about 200 new workers over the next several years to increase HIMARS production and that of other weapons sent to Ukraine like the GMLRS, according to Aaron Huckaby, the director of Lockheed’s Missiles and Fire Control business operations in Camden.

Despite plans to bolster its workforce, Lockheed won’t need to add space to its 2.2 million-square-foot facility. The plant operates with one HIMARS shift from 6 a.m. to 4:30 p.m., Monday through Thursday, Huckaby told Defense News, and will add a split shift, meaning another 10-hour shift with some overlap.

Lockheed will hire technicians, assemblers and inspectors, as well as manufacturing, chemical and mechanical engineers, Huckaby said.

The contractor has a partnership with Southern Arkansas University and recruits students from the tech school, located across the street from Lockheed’s facility, for an apprenticeship program. Lockheed is also eyeing graduates of Louisiana Tech University and forging a new relationship with the University of Arkansas.

Expansion in Arkansas

While Lockheed plans to grow by several hundred employees, defense contractors statewide are expected to add about 1,000 workers over the next several years. “The challenge right now is workforce issues,” Randy Zook, the president of the Arkansas Chamber of Commerce, told Defense News. “We’re trying to help with that.”

Camden is in a remote area “purposefully because of the nature of what goes on there,” Zook said, so the surrounding region must prepare for the new employees of local defense companies.

Aerojet Rocketdyne, which has been in Camden since 1979 and builds more than 75,000 solid-rocket motors a year for weapons like the Javelin, Stinger and Patriot missile, will grow its energetics capabilities in the town. The contractor recently announced the planned construction of a 51,000-square-foot facility in the industrial park. Its Camden workforce now totals more than 1,000 employees, according to Aerojet.

General Dynamics Ordnance and Tactical Systems’ Camden operations include an explosive load, assemble and pack facility working on Defense Department programs like the Hydra 70 2.75-inch rocket, Hellfire and Javelin warheads, and the modular artillery system supporting 155mm artillery.

The company has 320 employees at the location, but is expanding to accommodate a new product line for explosive load, assemble and pack for M795 projectiles. GD plans to repurpose existing facilities and build an additional 15,000 square feet of space as well as hire 60-90 more workers.

The flow of new defense workers isn’t entirely unprecedented. James Lee Silliman, Ouachita Partnership for Economic Development’s executive director, told Defense News that when the Shumaker Naval Ammunition Depot opened up in 1944, it brought 25,000 workers to Camden. Workers were sleeping on the streets and renting out beds in local homes for eight hours at a time.

And the defense industry has helped stabilize the local economy after a paper mill — International Paper Co. — closed down two decades ago and most of its 600 employees left the area, according to Silliman.

Over the last five years, many of the area defense contractors have grown; Lockheed, for instance, doubled its size over this period. The influx has brought new housing as well as a handful of new businesses catering to a younger crowd, including a microbrewery, Silliman said.

To handle the anticipated boom of new workers and their families, the city is in discussions with several housing developers about building more single-family and multifamily homes, he said.

Silliman added that he’s hopeful Camden will reap the benefits.

“Retail jobs follow manufacturing jobs, so the more manufacturing jobs that you have in a community, retail will soon follow.”

The annual “Christmas in September” spending season is well under way, with billions of dollars that that need to be allocated before the government’s fiscal year ends Sept 30.

And if fiscal 2022 is anything like previous years, the final three months will account for about a third of total obligations. Large government contractors get most of that payout, with small businesses following behind, according to analysis from The Pulse of GovCon, a woman-owned business intelligence advisory firm focused on government contracting.

The need to spend may be especially acute this year as supply chain issues and Congress’ habit of passing continuing resolutions instead of new budgets, a practice borne of political gridlock, ties the hands of agency procurement officials, leaving them with a backlog of requests and less time left to fill them.

“I would attribute at least some of this to the fact that we haven’t had a budget passed at the start of the fiscal year for who knows how many years,” said Amanda Swanson Goff, the director of research and analysis at The Pulse.

Though agencies tend to spend most of their discretionary dollars before July 1, data shows that the largest splurges in contract awards in any one month of the year have happened in September. What’s the rush? Any unused funds will be returned to the Department of the Treasury as of Oct. 1, and the “use-it-or-lose-it” bonanza of buying has become an annual autumn tradition in Washington.

Fourth quarter spending for this year on procurement could exceed $200 billion, an analysis by Bloomberg Government estimated.

The September effect is well documented and annually draws criticism from critics who say it encourages waste.

A study of government spending by nonprofit watchdog OpenTheBooks found that the federal government spent $97 billion in the final month of fiscal 2018, with more than $61 billion attributed the Pentagon. Purchases included guns and ammo, but also batteries and books — and $2.3 million on lobster tail. Federal agencies also spent $293,245 on steak, to include rib eye, top sirloin and flank steak that month

As agencies look for ways to disburse their coffers, 70 out of 73 agencies examined by The Pulse make a purchase in the final quarter of the fiscal year.

Where priorities stand, and how they might change

“When you think about these continuing resolutions that are taking up most of the first quarter, sometimes extending into the second quarter, you have a complete freeze on any new starts,” Goff said in an interview. “So the government really is handcuffed in terms of spending money.”

Lawmakers are working on a continuing resolution that would extend government funding levels through Dec. 16, as current funding for fiscal 2022.

Agencies that deal with public health emergencies or frequently changing national security demands may also intentionally reserve part of their budget for the end of the year as a cushion.

Yet as the COVID-19 pandemic showed, even unforeseen circumstances can redirect priorities for the future, as it did with the transition to remote work.

Experts at The Pulse predict a government-wide commitment to modernization, whether that’s further building out telework infrastructure or getting in front of rapidly evolving cybersecurity threats.

The Department of Defense in particular makes up half of discretionary spending, so its budget priorities can reflect what’s happening within the Pentagon.

Lately, such clues have been withdrawing from Afghanistan, funneling aid to Ukraine and restructuring internally to shape peacetime functions and address burgeoning threats.

Outlook for contractors

In the last quarter, sole-source awards and single-bid competitions also tend to increase because the government can move quickly on them.

Though what agencies spend their sprint money on has come under fire for being frivolous or wasteful, the most popular spending category is professional and administrative services.

The least popular spending category at this stage is for physical science programs, which play a larger role for agencies like the National Institutes of Health.

More broadly, the federal government spends large chunks of its budget on Medicare, social security and defense needs, although funding for income security rocketed at the start of the COVID-19 pandemic.

In total, 2022 discretionary appropriations are 8% more than last year’s.

Still, past years’ last-minute purchases have led members of Congress and unions to scrutinize the final transactions of the fiscal year.

“This ‘use-it-or-lose-it’ feature of time-limited budget authority has the potential to result in low-value spending, since the opportunity cost to organizations of spending about-to-expire funds is effectively zero,” said a report by Harvard University’s Kennedy School of Government. “Exacerbating this problem is the incentive to build up a rainy day fund over the front end of the budget cycle.”

Members of Congress have proposed legislation to limit an agency’s discretionary spending in the last two months of the fiscal year, but no progress has been made.

Advocates said the lack of clear data on the topic is concerning given the significant growth in the program in recent years and the emphasis placed on the community care program by lawmakers and federal officials.

“The complexity of the Veterans Health Administration patient population makes care coordination critical for improving patient outcomes and decreasing costs,” researchers with the RAND Corporation wrote in the new report, released Tuesday. “Poorly coordinated care between VHA and community care providers could result in confusion for patients, duplicative tests, increased costs, and lower-quality care.”

Community care programs have been used by VA for decades to help supplement department medical appointments and procedures. But the program has dramatically expanded in recent years, with critics of the VA health care system saying the private sector physicians are needed to cut down on veterans’ wait and travel times for health care.

In 2018, Congress adopted the MISSION Act, which expanded eligibility for accessing the outside medical appointments — with VA paying for the associated costs.

Earlier this summer, VA officials reported that 44% of all health services are handled through community care offerings.

The budget for those programs more than doubled from fiscal 2014 to fiscal 2021, when spending topped $18.5 billion. That equated to nearly 20% of all VHA spending. The fiscal 2023 budget calls for that total to rise to about 23%.

Conservative groups have pushed for even more, saying that outside care provides faster and cheaper options for patients than VA medical centers can provide. Union groups and progressive advocates have disputed that idea, and said that pushing too much care outside of the VA system amounts to privatizing the federal government’s responsibilities to veterans.

The new RAND analysis said data still doesn’t exist to prove claims that community care is a better choice for most veterans.

“Little is known about how the costs of care provided directly by VHA compare with the costs of community care,” the authors wrote. “Although comparisons between the cost of VHA-delivered and community care are limited, there are some indications that community care may be more expensive than VHA-delivered care.”

Similarly, the researchers said that studies so far indicate that access to private sector medical appointments “may be no better than access to care at VHA facilities,” especially as VA has improved appointment wait times in recent years.

“However, there may be certain populations of veterans for whom community care has significantly improved access,” the report states.

“Rural veterans, who make up nearly half of VHA patients, are more likely to live in areas with provider shortages and hospital closures, and they generally have to drive greater distances to see providers Community care may improve access for [those] veterans,” the report adds.

The report also notes that private sector physicians without specific training on veterans’ issues may be more likely to miss complications arising from military sexual trauma, battlefield injuries or toxic exposure in the service.

That last category is of particular focus given the recent passage of new military toxic exposure legislation, which could provide expanded medical care and disability benefits to more than 3 million veterans in coming years.

The RAND researchers did not say that the questions surrounding VA community care programs should be used to curtail or shut down the offerings. Rather, they pushed for more data collection, so federal officials can better manage the growing programs.

“As Secretary of Veterans Affairs Denis McDonough recently stated, the future of VHA depends on its ability to attract veterans to its facilities and keep those veterans returning for their needed medical care,” the report states.

“Coordinating with community care providers and ensuring that eligible veterans can access the high-quality care they need in a timely fashion, whether at VHA facilities or in the community, will be integral to achieving those goals,” the report adds.

The report is available on the RAND website.