The Clock Is Running
“In war, resolution; in defeat, defiance; in victory, magnanimity.” -- Winston Churchill; Quote of the Day
Leadership Insights
The DDI Global Leadership Forecast 2025, the largest ongoing global leadership study spanning more than 50 countries and 24 industry sectors, found that trust in immediate managers has fallen to just 29%, a 37% decline since 2022. High-potential employees are 3.7 times more likely to leave within a year if their manager fails to provide regular growth opportunities. In a week defined by institutional uncertainty and open-ended conflict, the leaders who hold teams together are investing in development conversations rather than waiting for stability to return. Before Friday, schedule one conversation with a high-potential member of your team focused on their growth, not their deliverables.
Your Morning Pulse
World
The U.S.-Israeli war against Iran entered its fifth day Wednesday, with Israeli forces conducting strikes targeting sites in Tehran, Karaj, and Isfahan as Iran’s three-day state funeral for Supreme Leader Ayatollah Ali Khamenei got underway. A NATO air defense system destroyed a ballistic missile fired from Iran that was heading toward Turkish airspace, according to the Turkish Defense Ministry, marking the first activation of NATO Article 5-adjacent air defense in the conflict.
Sudan formally accused Ethiopia of allowing drones to be launched from its territory to strike targets inside Sudan in February and March, the first time Khartoum has directly implicated its powerful neighbor in its nearly three-year civil war between the Sudanese Armed Forces and the paramilitary Rapid Support Forces.
A possible case of human-to-human transmission of swine flu was reported in Spain, with the patient having had no direct contact with pigs. The WHO’s reference laboratory in Britain is conducting confirmatory testing. Public health officials have not characterized the case as an outbreak, but it is being watched closely.
Politics (US)
The U.S. Senate voted Wednesday on a bipartisan War Powers Resolution introduced by Sens. Tim Kaine and Rand Paul that would direct the removal of U.S. armed forces from hostilities against Iran not authorized by Congress. The measure failed 47-53, with Sen. John Fetterman joining Republicans in opposition and Sen. Rand Paul the only Republican in favor. A parallel House vote is scheduled for Thursday.
Economy
Wall Street steadied Wednesday after two days of severe volatility, with Brent crude settling around $81 per barrel after President Trump signaled the U.S. Navy could escort tankers through the Strait of Hormuz. The national average price of regular gasoline rose to $3.20 per gallon, up 22 cents from a week ago and the fastest single-week spike since March 2022, according to AAA. Analysts at Gulf Oil warn prices could reach $3.50 nationally in coming weeks if Strait disruption persists.
Tech
OpenAI is in discussions to deploy its AI technology on NATO’s unclassified networks, according to a source familiar with the matter, days after finalizing a deal with the U.S. Pentagon. The move follows the collapse of Anthropic’s Pentagon contract after Anthropic refused to permit its models to be used for mass domestic surveillance or fully autonomous weapons systems, after which the U.S. government labeled Anthropic a “supply chain risk.” More than 100 Google employees working on AI reportedly signed an internal letter urging leaders to adopt the same red lines as Anthropic.
The Big Picture
Munitions math is the story behind the war story. The Pentagon is preparing a roughly $50 billion supplemental budget request to replenish weapons depleted in Iran and prior conflicts, with the White House hosting Lockheed Martin, RTX, and other major contractors Friday to discuss accelerating production. Chairman of the Joint Chiefs Gen. Dan Caine warned Trump five days before the strikes that shortfalls in critical munitions posed a “significant risk” to American forces.
The War Powers Act’s 60-day clock is running. Under the 1973 War Powers Resolution, the president must terminate unauthorized armed conflict within 60 days absent congressional approval. The Iran strikes began February 28, meaning the constitutional deadline arrives in late April. Leaders in defense procurement and GR should be building scenario plans around that timeline now.
Energy price shock extends far beyond gas. Roughly a fifth of global oil, significant volumes of LNG from Qatar, and major flows of petrochemicals and fertilizer inputs all transit the Strait of Hormuz. Qatar has shut LNG production at Ras Laffan, which supplies roughly 20% of global LNG, due to drone attacks. Procurement and operations teams should be auditing exposure to energy-linked input costs now, not next quarter.
CISA is operating shorthanded at the worst possible moment. Iran-linked groups have stepped up cyber reconnaissance targeting financial infrastructure and critical systems, while CISA has lost roughly a third of its workforce, replaced its acting director just before the conflict began, and remains without a Senate-confirmed permanent leader. The financial sector has moved to heightened alert, with banks and payments platforms identified as priority targets.
Sudan-Ethiopia tensions risk widening Africa’s deadliest conflict. Sudan’s first formal accusation against Ethiopia launching drone strikes from its territory marks a potential turning point in a civil war that has already created the world’s largest displacement crisis. Regional powers including the UAE, Egypt, Saudi Arabia, and Turkey have documented roles backing both sides, and an Ethiopian-Sudanese flashpoint would pull those networks directly into confrontation with each other.
The Empty Magazine: America’s Munitions Problem and What Comes Next for Defense Contractors
While the country watches live footage of strikes on Tehran and tracks gas prices at the pump, a more consequential story is unfolding in classified Pentagon briefings and contractor boardrooms: the United States is burning through precision weapons faster than it can make them, and the industrial base built to supply them has spent years optimizing for shareholder returns rather than surge capacity.
The Numbers Are Blunt
The Pentagon is preparing a roughly $50 billion supplemental budget request to Congress, as early as this Friday, to replenish munitions depleted in the Iran campaign and prior operations in Ukraine and Gaza. Deputy Defense Secretary Steve Feinberg has been leading the effort. The White House simultaneously scheduled an emergency meeting Friday with executives from Lockheed Martin, RTX (Raytheon’s parent company), and other major suppliers to demand accelerated production, according to Reuters, which cited five people familiar with the plan.
The urgency is not hypothetical. Secretary of State Marco Rubio told reporters that Iran produces an estimated 100 ballistic missiles per month, compared to roughly six or seven missile interceptors the United States can manufacture monthly. “Destroying Iran’s missile capacity,” Rubio said, “is the goal of the U.S. campaign” -- a statement that implies an extended campaign requiring sustained expenditure of weapons the country cannot quickly replace.
In the weeks before the strikes began, Gen. Dan Caine privately warned Trump that U.S. air defense stockpiles were already depleted from the June 12-Day War and that a sustained campaign against Iran could put American forces at significant risk. That warning did not stop the operation. It does define the stakes of what comes next.
The Industrial Base Was Not Ready
This problem did not begin with the Iran operation. Since Russia invaded Ukraine in 2022 and the United States began supplying Kyiv with advanced munitions, analysts and Pentagon officials have repeatedly warned that the American defense industrial base lacks the surge capacity to sustain a major conflict. The Iran campaign has now made that warning concrete.
Raytheon has a standing agreement with the Pentagon to eventually ramp Tomahawk cruise missile production to 1,000 units annually. The government currently plans to purchase 57 in all of 2026 at $1.3 million each. That gap between aspirational production and current output is the core of the problem. Years of post-Cold War defense consolidation produced an industrial base with very few manufacturers for critical weapons systems, limited raw material inventories, and supply chains that were optimized for cost efficiency rather than rapid expansion.
A January 2026 Heritage Foundation study found that U.S. munitions stocks would be exhausted within 25 days of a high-intensity conflict with China. Former Air Force Secretary Frank Kendall told CNN that the Pentagon will need to carefully “throttle” which weapons it uses in Iran to preserve stockpiles earmarked for a potential Pacific conflict. That calculus is now being made in real time, at war.
What This Means for GR Professionals and Defense Contractors
The $50 billion supplemental request is not a discretionary budget item. It is a direct consequence of strategic decisions made at the highest level of government, and it will create immediate and durable opportunities for companies capable of demonstrating production capacity and supply chain reliability.
For government relations professionals, the supplemental request is the most important near-term legislative vehicle to track. It will move fast, it will be contentious -- progressive Democrats are already signaling opposition -- and it will carry enormous policy riders affecting procurement rules, contractor performance requirements, and acquisition timelines. Companies that are engaged on Capitol Hill before the request lands will be far better positioned than those who engage after.
The Trump administration has also been explicit about consequences for underperformance. An executive order signed in January directed the Pentagon to identify contractors deemed to be underperforming on contracts while distributing profits to shareholders. The Pentagon is preparing to release that list. Companies named will have 15 days to submit board-approved remediation plans. Insufficient plans can result in contract termination. That is not regulatory pressure. That is a restructuring ultimatum, and the Iran war has accelerated the timeline.
For smaller suppliers in the defense industrial base, the surge demand is simultaneously an opportunity and a risk. The government will push for rapid production increases on aggressive timelines. Companies that cannot demonstrate workforce capacity, materials availability, and quality assurance at scale will find the opportunity goes to larger primes. Building relationships with those primes now is not a long-term strategy. It is a near-term necessity.
One More Thing
There is a quiet tension running beneath the public narrative of the Iran conflict. The administration has presented the operation as decisive and well-resourced, with Trump insisting publicly that the United States has a “virtually unlimited supply” of munitions. The simultaneous $50 billion emergency request, the warning from the Chairman of the Joint Chiefs, and the urgency of Friday’s White House contractor summit tell a different story. It is not that the country cannot sustain this war. It is that sustaining it will require a rapid and expensive reconstitution of an industrial base that decades of peace-dividend thinking allowed to atrophy. The contractors in that White House meeting on Friday understand exactly what is being asked of them. The question is whether the supply chain infrastructure exists to deliver it.
NATO art 5 will not be invocated because they are all fluff and no bite, will not even bark