In the Network: Top 10 Federal Contractors of 2014, Connected through Lobbyists
A few years ago, I looked into the ties that connected the top 10 federal contractors of 2010 and 2011, and last year I took an updated look at the top contractors of 2013. Let’s return to that subject again using federal contracting data for 2014, using files released just last month by the Federal Procurement Data System. The top 10 private contractors with the United States government in fiscal year 2014 were:
1. Lockheed Martin Corp.: $32.2 Billion in contracts
2. Boeing: $19.6 Billion in contracts
3. General Dynamics Corp.: $15.4 Billion in contracts
4. Raytheon: $12.6 Billion in contracts
5. Northrop Grumman Corp.: $10.3 Billion in contracts
6. McKesson Corp.: $6.2 Billion in contracts
7. United Technologies: $6.0 Billion in contracts
8. L-3 Communications: $5.8 Billion in contracts
9. BAE Systems: $5.0 Billion in contracts
10. Huntington Ingalls Industries: $4.7 Billion in contracts
Taken together, these ten private corporations received $117.7 Billion in taxpayer funds in fiscal year 2014, 26.5% of all federal contract dollars received during the year. That’s a huge share for just 10 corporations, to be sure. On the other hand, for those of you who worry that concentration of corporate advantage is only accelerating, it may be reassuring for you to learn that this represents a trend on the decline. Consider the size of federal contracts to the top ten and the share of all federal contract dollars concentrated among the top ten over time (source: fdps.gov):
While the amount and share of federal contracting dollars going to the top 10 federal contractors went noticeably down in 2014, the degree of connection between these contractors has lessened, too. The figure you see below is a sociogram displaying the extent of joint lobbyist hires by the top 10 federal contractor corporations. Patterns in the underlying data, generated from lobbying disclosures filed for activity during the year 2014, are represented by drawing a line between two military contractors if they both hired the services of at least one lobbying firm in 2014. The number drawn on each line indicates the number of lobbying firms those two contractors hired in common.
While it’s true that all of the top ten federal contractors in 2014 were connected to one another directly or indirectly through the act of hiring the same lobbying firms, the contractor lobbying network for these corporations is actually showing some signs of breaking down a bit. The cohesion of a network is measured as its density, the share of ties that could possibly be in the network that actually are in the network. In 2011, the density of the contractor lobbying network was 91.1%, indicating a very tightly connected network in which contractors jointly used the same lobbying shops. In 2013, the density of the contractor lobbying network had dropped to 82.2%. By 2014, the density of the contractor lobbying network had dropped further to 66.7%. That’s still a fairly tight network replete with connections, but it’s not nearly as well-connected as it used to be. As you can see from the network graph above, there are two corporate outsiders in this lobbying network. One is Huntington Ingalls, a former part of Northrop Grumman that was sold off four years ago. The other is the McKesson corporation, a newcomer to the top ten.
Despite all these changes across recent years, one characteristic of the top ten contractors remains the same: each one of these corporations has made its money off of military contracts. Military contractors such as Boeing, Northrop Grumman, Raytheon and General Dynamics are widely known. Huntington Ingalls builds aircraft carriers and assault ships for the U.S. Navy. United Technologies is the parent company of Sikorsky Aircraft, which makes Black Hawk and other combat helicopters. L-3 Communications manufactures military surveillance system. BAE describes itself as a “global provider,” selling military equipment to armies around the world. Even McKesson Corporation, which as a pharmaceutical corporation would seem to be unconnected to military enterprises, obtains a majority of its contract value in supplying drugs to the Veterans Administration, a business that relies on the production of veterans to remain in operation. Each of these very large corporations benefits from a war stance. When these coordinations speak together using their lobbyists as mouthpieces on Capitol Hill, their voices can be difficult to ignore. Even the slightest unraveling of this network of coordinatation may be a positive sign.