Setback for Santa Bárbara. The Ministry of Defense has dismissed the appeal filed by the Spanish subsidiary of the American company General Dynamics against the contracts for the new wheeled and tracked artillery for the Army, which the Government awarded to Indra and Escribano Mechanical & Engineering (EM&E) last year. According to Defense sources, “the resolution fully dismisses all the claims made.” The artillery contracts amount to a total of 7.24 billion and are part of the Special Modernization Programs (PEM) that the Government launched last year to increase military spending to the equivalent of 2% of GDP.
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Defense points out that the awarding process to the temporary business union (UTE) formed by both companies “has been carried out in full compliance with current legislation” and assures that in this decision, as in others related to contracting linked to national defense, “award decisions must consider the protection of essential security interests, supply guarantee, strategic autonomy, and operational availability of military capabilities, all aspects duly assessed by the administration according to the legal framework applicable in Spain and the European Union.”
Santa Bárbara filed this appeal in February against both contracts because it considers that it was excluded from a project for which it had a product like the Némesis, which it presented together with its partner KNDS at the International Defense and Security Fair (Feindef) held in May 2025 in Madrid. General Dynamics argues that they have the necessary capabilities to fulfill these contracts, unlike Indra and EM&E, which did not have their own product. Market sources, however, point out that the Némesis has not been acquired by any country.
Indra, for its part, signed less than a month ago an alliance with the South Korean Hanwha to use its K9 platform in the tracked artillery contract, which amounts to 4.554 billion. According to the agreement, Indra will make a Spanish version of this self-propelled howitzer, which it may even export with permission from the Korean company. However, Indra still needs to finalize negotiations to see with which partner it will make the wheeled artillery. In turn, Defense denies access to the contracting file repeatedly requested by Santa Bárbara “as the legal grounds justifying such access are not met, in line with Supreme Court rulings.”
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It is worth noting that this appeal is an administrative route running parallel to the contentious-administrative appeal that Santa Bárbara filed before the Supreme Court against the public aid worth 3.002 billion euros that the Ministry of Industry granted to the UTE, in the form of 0% interest loans. This judicial appeal was against the entire Royal Decree, so it also affected the aid that other PEMs will receive, which have nothing to do with artillery and in which Telefónica and Oesía are also involved.
The judicial route opens
The Defense resolution ends Santa Bárbara’s administrative route against the artillery contracts, clearing the way for the company to file an appeal before the National Court, which would be the competent body in this case. Santa Bárbara itself warned at the end of February that it would file a contentious-administrative appeal before the mentioned court if Defense ruled against it. This threat from the company came after it became known that Defense dismissed the injunctions it had requested against the contracts. “This resolution strengthens the legal certainty of the process and endorses the administration’s actions in an area of special relevance for defense and the national industry,” states Robles’ portfolio.
Losing these contracts is a severe blow for Santa Bárbara, which until recently had been the reference company in the military land industrial field in Spain. However, the Government decided that the national defense champion to lead the rest of the sector in the land domain had to be Indra, which was one of the main beneficiaries in the allocation of PEMs last year, along with Navantia and Airbus, the other references in the maritime and air fields. Of the PEMs, Santa Bárbara only retained the update of the Pizarro armored vehicles, a contract much smaller than the artillery ones. “It is not worth destroying what exists to create the future. We are aligned with the Government’s policy to promote Spain’s strategic autonomy, we are part of that autonomy and want to be counted on for those projects,” said Alejandro Page, general director of Santa Bárbara, in January.
