Browse By

Federal Contracts: Concentrated? Yes. Increasingly Concentrated? No.

A lot of information about the United States government hides in plain sight, shared in reports that few people know about and that the news media ignore (as they’re too busy covering the switch in directors for an Ant Man movie). Every spring, the federal government releases a report describing trends in its private contracting. I’m a pessimist at heart, so when I opened the new report on government contracting I expected to find two patterns:

1) that just a few corporations reaped the majority of U.S. government contracts, and
2) that the share of contracts going to the top contractors had been increasing over time as those top corporations consolidated their control over federal contracting system.

My first expectation was strongly confirmed. In 2013, just ten corporations secured 28.7% of all federal contracting dollars. These corporations are:

1. Lockheed Martin: $44.1 billion in contracts
2. Boeing: $21.2 billion in contracts
3. Raytheon: $14.1 billion in contracts
4. General Dynamics: $13.1 billion in contracts
5. Northrop Grumman: $10.0 billion in contracts
6. SAIC: $6.3 billion in contracts
7. Huntington Ingalls: $6.2 billion in contracts
8. L-3 Communications: $5.7 billion in contracts
9. United Technologies: $5.7 billion in contracts
10. BAE Systems: $4.8 billion in contracts

My second expectation, however, was not confirmed. Drawing from available electronic data from 2006-2013, the following chart reveals that the shares of contracting dollars going to the Top 10 and Top 100 contracting corporations have been essentially flat:

Share of all Federal Contract Dollars going to the Top 10 and Top 100 federal contractors

To put this trend in a slightly longer historical context, let’s head back into the 1984 analog record of the same report. In 1984, the top 10 contracting corporations garnered 27.6% of all federal contracting dollars, and the top 100 corporations obtained 63.1%. For the top 10 the recent shares are typical and for the top 100 the overall share is slightly down.

The lesson I learned today, a lesson I periodically have to relearn, is simple but important: the world is not always as I assume it to be. This is why stories and proclamations are never enough. Always check the data.

One thought on “Federal Contracts: Concentrated? Yes. Increasingly Concentrated? No.”

  1. Dave says:

    It would be interesting to know what percentage of spending in Dave’s little microcosmic economy goes to the big corporations. Gas, groceries, paper products, electricity, tires, plastic wrap, etc. Government should be able to take advantage of economies of scale, but I doubt it often works that way. (I haven’t bought a helicopter or a ship in a very long time:)

Leave a Reply

Your email address will not be published. Required fields are marked *

Psst... what kind of person doesn't support pacifism?

Fight the Republican beast!