Defense contract spending is highly concentrated — about 30% to the top 5 companies and 59% to the top 10 states — and concentration has moved only modestly, not trended sharply, over the past decade

Summary

Defense-contract spending is concentrated at both ends: by company, the five largest contractors (Lockheed Martin, RTX/Raytheon, Boeing, Northrop Grumman, General Dynamics) received about 30% of all DOD contract obligations in FY2024 ($132.9B of $445.1B) — down somewhat from roughly 38% in FY2020 and close to the ~33% share those same five firms held in FY2015. By place, the top 10 states captured 59% of total defense spending in FY2023 ($357.2B of $609.2B), with Texas, Virginia and California alone accounting for about a third of the national total and holding those same top-3 positions year after year. Neither dimension shows a strong multi-year trend toward more or less concentration — both have stayed in a fairly narrow band, with company concentration ticking down modestly by FY2024 after a higher FY2020 reading, and state-level dominance essentially unchanged.

Company concentration: about 30% to the top 5, and it moves only modestly year to year

The Congressional Research Service's Defense Primer (IF10600), sourced from SAM.gov's Top 100 Contractors Report, publishes DOD's five largest contractors by obligations for select fiscal years. Computing each year's top-5 share directly from CRS's own company-level tables:

Data-quality note: CRS's own narrative text for FY2020 states the top five received "54%" of DOD contract obligations that year, but this is arithmetically inconsistent with CRS's own FY2020 table in the same document ($158.4B / $420B = 37.7%, not 54%). We use the table-derived, internally-consistent figure (37.7%) rather than the narrative claim, and flag the discrepancy here since it appears to be an error in the primary source itself, not a methodology choice on our part.

A second, complementary measure — concentration among the top 100 contractors rather than just the top 5 — shows a similar picture of high but not dramatically rising concentration: the top 100 DOD contractors took 65% of obligations in FY2022 ($274.0B) and 62% in FY2023 ($290.0B), a slight easing rather than a tightening. Company-level DOD contracting has been dominated by essentially the same five primes (Lockheed Martin, Boeing, Raytheon/RTX, Northrop Grumman, General Dynamics) for at least a decade — no new entrant has broken into that top tier — but their combined share of the pie has fluctuated within roughly a 30-38 percentage-point band rather than trending steadily up or down.

Geographic concentration: three states account for about a third of all defense spending

DOD's own FY2023 Defense Spending by State report (via the Office of Local Defense Community Cooperation) put total nationwide defense spending — contracts, military/civilian payroll, and grants combined — at $609.2B. Of that:

• Contracts alone were $431.4B (71% of the total)
• Personnel payroll was $167.4B (27%)
• Grants were $10.4B (2%)

Geographically, Texas ($71.6B), Virginia ($68.5B) and California ($60.8B) were the top three states, together accounting for about $200.9B — roughly a third of the $609.2B national total. The top 10 states combined captured $357.2B, or 59% of all defense spending nationwide. This ranking (Texas, Virginia, California, plus Connecticut and Florida rounding out the top tier) has been stable for years — these states host the shipyards, military bases, and major contractor facilities (Lockheed in Texas/Georgia, Huntington Ingalls and Electric Boat submarine yards in Virginia/Connecticut, aerospace clusters in California) that drive outsized contract and payroll totals, so the geographic concentration reflects durable industrial-base geography rather than a recent shift.

Has concentration been changing? A modest easing, not a clear trend in either direction

Combining the two lenses: defense-contract spending has been persistently concentrated for at least the past decade — roughly a third of company-level dollars to five prime contractors, and roughly six in ten geographic dollars to ten states — but neither measure shows a strong secular trend toward more or less concentration. The company-level top-5 share moved from about 33% (FY2015) up to about 38% (FY2020, a year that saw large single awards including a big jump in Lockheed's F-35-driven totals) and back down to about 30% (FY2024). The top-100 breadth measure eased slightly from 65% to 62% between FY2022 and FY2023. On the geographic side, the same handful of states — anchored by major shipyards, air bases, and legacy contractor plants — have occupied the top ranks across the years for which OLDCC publishes reports, with no evidence of new states displacing them. The honest characterization is: high and durable concentration on both dimensions, with mild year-to-year fluctuation rather than a directional trend.

Data and methodology notes

Company figures come from CRS's Defense Primer: Department of Defense Contractors (IF10600), which CRS itself derives from SAM.gov's Top 100 Contractors Report — we fetched three separate dated versions of this CRS product directly (versions covering FY2015, FY2020, and FY2024) to build the time series, since no single version publishes a multi-year series. State figures come from DOD's Office of Local Defense Community Cooperation (OLDCC) Defense Spending by State report for FY2023, accessed via GovCon Wire's reporting on the DOD-issued figures (the OLDCC PDF itself could not be fetched directly here due to a certificate error, so those state totals are cited to the secondary GovCon Wire summary of the DOD report rather than the primary PDF text itself). We separately confirmed via the live USAspending.gov API (spending_by_category/recipient endpoint, DOD awarding agency, award types A-D, FY2024) that Lockheed Martin, Boeing, Raytheon, RTX, and related subsidiary entities dominate the raw recipient-level rankings, consistent with CRS's figures; that live pull also illustrates why company concentration is easy to understate from raw USAspending data alone — the same parent company appears under several different UEI/DUNS-registered subsidiary entities (e.g., Lockheed Martin Corporation appears at multiple recipient IDs, and Boeing's Electric Boat- and Sikorsky-related subsidiaries report separately), so a naive top-N-by-recipient-ID query undercounts true parent-company concentration unless those entities are consolidated first, which is exactly what CRS's SAM.gov-sourced parent-level table already does and why we relied on it as the primary reference. This warehouse's own fiscal schema (fiscal.usaspending_by_agency, usaspending_by_district, usaspending_recipients_by_district) does not carry a nationwide, agency-filtered, company-level obligations table, so the company-concentration analysis above relies on CRS's published tables and the live USAspending API rather than on a warehouse SQL query.

Every query behind this report

2 warehouse calls ran in this session, in order. Each is reproducible against the same snapshot.

SELECT "year", obligated_amount FROM fiscal.usaspending_by_agency WHERE agency_name ILIKE '%defense%' ORDER BY "year"

SELECT DISTINCT agency_name FROM fiscal.usaspending_by_agency WHERE agency_name ILIKE '%defense%'