The US Department of War published notice of a contract worth up to $400 million that was awarded to US-based Cleveland-Cliffs Steel Corp. for the supply of grain oriented electrical steel (GOES) in its daily contract announcement dated July 1, 2026. The five-year, indefinite-delivery, indefinite-quantity contract was awarded through the Defense Logistics Agency (DLA) and carries a performance completion date of September 8, 2030, with no option periods.
The award was made on a sole-source basis, as Cleveland-Cliffs is the only domestic producer of grain oriented electrical steel. The contract covers up to 53,000 net tons of the material over its term. The West Chester, Ohio based company will supply the steel for use by five military services, namely the Army, Marine Corps, Navy, Air Force and Space Force. Funding for the contract comes from fiscal 2025 through 2029 transaction funds.
Grain oriented electrical steel is a specialized material engineered to minimize energy loss under alternating current, which makes it essential for the cores of transformers and generators used in military equipment and the wider electrical grid. Cleveland-Cliffs is the largest flat-rolled steel producer in North America and the sole domestic source of the product, which produces the material at its mill in Butler, Pennsylvania. That sole domestic source position underpinned the government's decision to forgo competitive bidding, as historically the US has relied on imports of the material from Japan and South Korea, signaling another move to rely on domestic steel only.
Lourenco Goncalves, chairman, president, and chief executive officer of Cleveland-Cliffs told investors on the company's third-quarter 2025 earnings call that the government tends to stockpile grain oriented electrical steel for national security purposes rather than install it immediately, giving the US a domestic reserve it can draw on if a supply disruption occurs. Goncalves said, “The US government continues to grow as our partner.”
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