The USA Awards New Contract For Thule Air Base: Reverting Back to Greenlandic Control

The United States Department of the Air Force has awarded a new maintenance contract for the Thule Air Base in Greenland.

The contract was announced by the U.S. Department of Defense (DoD) on December 16 and is worth a maximum of USD $3.95 billion, according to a DoD news statement. 

"The new maintenance contract is now in the hands of a newly established company, Inuksuk A/S, of which 51% is Greenlandic/Danish owned and 49% owned by the American Vectrus", Assistant Professor Marc Jacobsen at the Royal Danish Defence College tells High North News. 

Jacobsen explains that the new contract is thus in line with the 2020 framework agreement between the U.S. and Greenland, which resolved a contract dispute between the two parties.

Marc Jacobsen, Assistant Professor, Royal Danish Defence College, Centre for Arctic Security Studies.

Greenlandic control

In a previous interview with HNN, Jacobsen explained that in 2014, the contract went to the American company Vectrus Services, representing a substantial change in the long-term agreement between Denmark and the U.S. with grave economic consequences for Greenland’s national economy.

"The unilateral change by the U.S. had been a point of contention since 2014 and the Greenlandic Self-Government had worked to revert back to the original agreement," he said.

Jacobsen also added that since 2014, it has been a top priority for the Government of Greenland to renegotiate the Thule Air Base service contract. In 2020, Greenland, the U.S., and Denmark agreed on a new framework agreement, stating that companies eligible to compete for the maintenance contract must be majority-owned by Danish or Greenlandic individuals and be based in Greenland. 

Significant economic effects

On Monday, Jacobsen tells HNN that the new contract is expected to have significant economic effects for Greenland in the form of tax income and by involving more Greenlandic workers, apprentices, and interns in the maintenance business at the base to the benefit of the local households and the national economy.

"The agreement also has great symbolic significance in the way that it is a tangible sign of U.S. acknowledgment of Greenland’s contribution to the protection of U.S. national security through hosting the U.S. military – as well as signaling that the Greenland Self-Government constitutes a still more equal partner in international politics," he explains. 

He emphasizes that the maximum amount of $3,95 billion can be used for operations and maintenance services for the base, and not for any potential military upgrade of the base.

The operations and maintenance services included in the contract is a.o. airfield operations, civil engineering, environmental management, food and health services, supply and fuel logistics, seaport, transportation, vehicle maintenance, and community and recreation services, a press release from the U.S. Embassy in Copenhagen states.

Strategic importance

Thule Air Base is the U.S. Air Force's northernmost base. It plays a key role in the U.S. military's ability to detect and provide early warnings for ballistic missile attacks. 

As High North News has reported, the U.S. confirmed in May 2022 that an upgrade was underway and that it was to invest billions in the Arctic, including the base in Thule. 

During the past years, the Arctic has re-emerged on the U.S. security and defense policy agenda. In the 2019 U.S. DoD Arctic strategy, the region is seen as a potential corridor for strategic competition, particularly with Russia and China. 

"The contract is not in itself an indication of increased U.S. military engagement in the Arctic, because it was long-awaited and made in accordance with previous agreements. In line with these, the new agreement will last 12 years, so this is very standard," Jacobsen says.

He adds that for the United States, the new contract is a.o. a way to improve relations with Greenland which is getting more important in regard to the Self-Government’s increasing self-determination. The establishment of the U.S. Consulate in Nuuk in 2020 is another example serving the same purpose.

"While Greenland is experiencing more self-determination, its geostrategic importance in the protection against missiles from Russia and so-called rogue states has yet again increased during the past approximately five years. Trump’s idea of purchasing Greenland in the summer of 2019 and Pompeo’s infamous speech in Rovaniemi a few months earlier, both exemplify the renewed U.S. geostrategic interest in Greenland and the Arctic. The Biden administration shares the same geostrategic perspective but surely uses much softer rhetoric."