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Government and Defense Contracting Trends & Statistics for 2019

Two coworkers looking at graphs on a computer. Text overlay says Government Contracting Trends & Statistics: 2019.

Introduction

As a government contractor, your business relies on government trends. Whether it’s new budget allocations, changing defense needs, or growing accountability regulations, this industry shifts rapidly and to remain competitive, it’s vital to stay on top of it all. With the right data, your organization can be proactive, anticipating industry changes, rather than reactive and trying to play catch up.

This blog post is meant to help you keep that step ahead, by providing an overview of the most important trends and statistics for government and defense contractors. It will discuss DoD trends in best practices, government spending, contract rewarding, contract types, risk and non-compliance, and small business spending. It is by no means complete or conclusive.

However, if you find that I’ve excluded something that you feel is important, please feel free to reach out to me. I plan to periodically update this post, and I may include your contribution in a future update.

Let’s take a look!

When we examine the future of DoD contracting, we need to keep an always-watchful eye on how the DoD and its contractors are being evaluated by external agencies, such as the Government Accountability Office (GAO).

2018 Trends as Evaluated by The US Government Accountability Office (GAO)

Improved Cost Performance

A high priority for the GAO is to ensure that taxpayer dollars are spent efficiently. This means they keep careful watch of the DoD’s contract spending.

In their annual report on DoD weapon systems, the GAO said:

“Since DOD began to implement acquisition reforms 8 years ago, new defense weapon systems programs have done a better job staying within budget estimates than their predecessors.”

However, as we see in the chart below, the DoD’s portfolio has increased in both cost and size. Much of this is due to cost growth that occurs after production begins.

Graph titled DoD's Portfolio Increased in Cost and Size; Most Cost Growth Occurred after Production Start.

Therefore, the GAO recommends that DoD programs implement knowledge-based acquisition practices in order to more accurately anticipate production costs. More on what that means in the next section.

(Data via GAO, found here.)

Knowledge-Based Acquisition

Since 2004, the GAO has promoted knowledge-based acquisition practices in DoD programs.

The GAO defines the concept of Knowledge-Based Acquisition as:

  • Using mature technology
  • Having complete product designs
  • Having production processes under control

The GAO indicates knowledge-based acquisition practices have several benefits: “These steps ensure technologies are mature, designs are stable, and production processes are in control…”

Unfortunately, they have found that the DoD istill lags behind in implementing these practices, leading to cost growth, late projects, and inadequate performance.

They stated, “In fact, most of the 45 current programs that proceeded into system development, through critical design reviews, and into production this year did so without completing key knowledge-based practices. And only one of the 12 future programs gearing up to enter DOD’s portfolio plan to fully meet these practices when they start system development.”

A chart titled DoD Programs Continue to Not Fully Implement Key Knowledge-Based Acquisition Practices.

Implementing knowledge-based acquisition practices could improve operations for both the government and contractors. These practices may reduce cost growth for the government customer, and allow contractors to operate more efficiently.

If you don’t implement these practices in your own operations, be on the lookout for these suggestions to turn into requirements. As we’ll see in other reports, the DoD is becoming increasingly more interested in increasing efficiency and accountability.

(Data via GAO, found here.)

2019 Trends as Evaluated by GAO

Following the 2018 results, the GAO continued monitoring the DoD for cost performance and knowledge-based acquisition practices. In addition, it evaluated some roots of cost growth.

In their 2019 Weapon Systems Annual Assessment, the GAO states:

“DOD’s 2018 portfolio of major weapon programs has grown in cost by $8 billion, but contains four fewer systems than last year. GAO’s analysis suggests that one of the primary drivers of this cost growth is that, since 2012, the average age of programs has increased—indicative of DOD decisions to introduce new capabilities through additions to existing programs rather than by starting new programs. On average, programs in the current portfolio are about 4 months older than last year and nearly 3 years older than in 2012.”

Two graphs. The first one shows total acquisition cost increasing from 2015-2018, with a high of 1800 billions in 2018. The second graph shows program age increasing from 2012-2018.

They go on to say, “Portfolio-wide cost growth has occurred in an environment where awards are often made without full and open competition. Specifically, GAO found that DOD did not compete 67 percent of 183 major contracts currently reported for its 82 major programs. GAO also observed that DOD awarded 47 percent of these 183 contracts to five corporations and entities connected with them.”

Two pie charts. The first shows that 67 percent of major contracts were not completed, 31 percent were completed and 2% had insufficient information. The second pie chart shows that 47 percent of major contracts were awarded to 5 corporations. 53 percent of major were awarded to 30 remaining companies.

(Data via GAO, found here.)

Knowledge-Based Acquisition

Despite some improvement from GAO’s evaluation in 2018, this year most major defense programs are still not fully implementing knowledge-based acquisition practices.

A chart titled DoD Major Defense Acquisition Programs Continue Not to Fully Implement Key Knowledge-Based Acquisition Practices.

(Data via GAO, found here.)

Defense Outlays and Forecast in the United States

This graph gives us a general sense of Defense spending in recent years and how Defense spending may trend into the future.

A bar graph showing Defense outlays in billions of US dollars. There is a steep jump predicted in 2020, which later declines in 2021 to meet a more moderate incline.

Note, there was steady growth in Defense spending from 2000 to 2011, after which we saw a decline.

Then, beginning in 2016, defense outlays trended upward. This is expected to continue into 2029, with a steeper increase from 2019 to 2020. After this, defense spending is predicted to increase at a slower, but steady, pace. If these predictions are correct, this is promising news for defense contractors. The higher defense spending is, the more revenue opportunity there is for defense contractors. It may also point to more revenue opportunity for small businesses who perform defense contracts.

(Data via Statista, found here.)

Contract Awarding

GAO’s 2018 Update on Government Contracting

This infographic by GAO provides a general overview of government contracting, including what services and products the government purchased, who the government awarded contracts to, and what types of contracts the government awarded.

Keeping an eye on the popular products and areas of contract spending can help you better optimize your contracting strategy moving forward.

(Data and infographic via GAO, found here.)

Bloomberg Analysis of Government Contracting Trends

Contract Spending by Federal Government

A bar graph titled Federal COntract Spending Hits Five-Year High.

Bloomburg Government, similar to the previously mentioned sources, found that federal contract spending is increasing. According to this chart, it has continued to increase at a rate of about 5.8 percent beginning in 2014.

All government contractors, including defense contractors, have likely felt the effects of this increased federal contract spending. If this trend continues, this could lead to even greater increases in the government contracting industry.

(Data via Bloomburg Government, found here.)

Trends in Contract Type

A double bar graph titled Indefinite-Delivery Contracts Are Outpacing Definitive.

From 2017 to 2018, the number of indefinite-delivery contracts rose. This means 2018 is the second year in a row where more indefinite-delivery contracts were awarded than other contract types. If these trends continue, indefinite-delivery contracts will continue to outnumber other contract types.

For government contractors, indefinite-delivery contracts represent greater opportunity for providing value to the government, as well the potential for steadier revenue. However, contractors should be aware of possible challenges that indefinite-delivery contracts may pose.

(Data via Bloomburg Government, found here.)

Trends in Small Business Spending

A bar and line graph titled Small-Business Spending Increased With Overall Spending. The bars show increased small-business spending from 2014 to 2018. The line shows in the same years small-business share of total spending remains constant around 20 percent.

The government’s small-business spending has increased with overall contract spending. The small-business share of total contract spending remains about the same.

(Data via Bloomburg Government, found here.)

Contract Awarding Goals

Despite small-business share remaining about the same, the government has increased the number of prime contracts awarded to small and disadvantaged businesses.

In 2018, 25% of prime contracts were awarded to small businesses, meeting the goal of 23%. This amounted to $120.8 Billion dollars in contracts awarded to small businesses.

In 2018, 4.75% of prime contracts were awarded to women-owned small businesses, missing the goal of 5%. This amounted to $22.9 Billion dollars in contracts awarded to women-owned small businesses.

In 2018, 9.65% of prime contracts were awarded to small disadvantaged businesses, greatly exceeding the goal of 5%. This amounted to $46.5 Billion dollars in contracts awarded to small disadvantaged businesses.

In 2018, 4.27% of prime contracts were awarded to Service Disabled Veteran-Owned Small Businesses, meeting the goal of 3%. This amounted to $20.6 Billion dollars in contracts awarded to service disabled veteran-owned businesses.

In 2018, 2.05% of prime contracts were awarded to HUBZone businesses, missing the goal of 3%. This amounted to $9.9 Billion dollars in contracts awarded to small businesses.

This suggests that small businesses, especially those that fit into the above categories, remain on the lookout for prime contract opportunities.


(Data provided by the Small Business Administration, which can be found here.)

Risk and Non-Compliance

So, we’ve discussed the trends in implementing best practices, in contract awards, and in areas of spending. But what about the financial auditing and risk management that the government and its contractors face?

GAO Analysis of High-Risk Areas of the Department of Defense

DoD Financial/Asset Management

It appears that compliance in some government areas is a continual challenge. “DOD’s auditors issued more than 1,100 systems-related findings and recommendations during the fiscal year 2018 financial statement audit and the DOD OIG has reported multiple material financial systems that do not comply with federal systems requirements.”

The DOD OID reported 20 material weaknesses in internal control across the department. “Some of these…are examples of long-standing weaknesses that DOD has been unable to address.”

The DOD OIG also reported on additional findings regarding inventory.

For example, the auditor found:

  • 107 rotor blades for Blackhawk helicopters that could not be used but remained on the inventory records
  • 24 Gyro Electronics for military aircraft that should not be used but remained in the inventory records
  • 20 fuel injector assemblies for Blackhawk helicopters did not have supporting documentation to demonstrate which military service owned them

The report went on to say, “However, DOD has seen some early signs of progress. For example, in preparing for and undergoing its first financial statement audit, Navy’s Commander, U.S. Pacific Fleet, strengthened internal controls to improve its operations. The initiative strengthened internal controls that resulted in freeing up purchasing power to fund $4.4 million in ship repair costs.

“Further, DOD reports that [the] Army successfully implemented a materiality-based physical inventory best practice to Army depot asset counts. This process improvement ensures a more accurate inventory count and Army avoids approximately $10 million of future cost annually.”

In addition to preventing a DoD clean audit, weaknesses in managing material and inventory can lead to significant trouble for defense contractors. In the future, defense contractors may need to implement new practices and systems in order to meet audit goals.

(Data via GAO, found here.)

Contractor Business System Audits Completed or Planned by DCAA

A bar graph titled Number of Contractor Business System Audits Completed or Planned by Defense Contract Audit Agency.

As of writing, GAO has not published the number of completed audits in 2019. In order to keep up with 2019 auditing goals, the DCAA will need to more than double the amount of audits completed in 2018. Then, the number of audits completed will need to double again moving into 2020.

(Data via GAO, found here.)

General Contracting Statistics

As a contractor, you have to stay aware of your fellow contractors. Although government contracting operates differently than the private sector, they are still your competition.

Luckily, however, government transparency requirements make it relatively easy to know who the government awards contracts to. Here are the top 100 federal and defense contractors in 2018.

Top 100 Federal Contractors FY2018 According to General Services Administration (GSA)

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Global Vendor Name Number of Actions Dollars Obligated %Total Actions %Total Dollars
LOCKHEED MARTIN CORPORATION 140,260 $40,552,880,120.29 0.3380% 7.2880%
BOEING COMPANY 19,688 $29,755,579,932.10 0.0470% 5.3470%
RAYTHEON COMPANY 13,418 $18,767,821,886.04 0.0320% 3.3730%
GENERAL DYNAMICS CORPORATION 31,055 $17,503,127,011.85 0.0750% 3.1450%
NORTHROP GRUMMAN CORPORATION 11,669 $11,987,896,282.90 0.0290% 2.1540%
MCKESSON CORPORATION 76,281 $8,964,990,935.62 0.1840% 1.6110%
HUNTINGTON INGALLS INDUSTRIES  INC. 3,853 $7,346,840,141.64 0.0090% 1.3200%
BAE SYSTEMS PLC 10,079 $6,877,420,876.67 0.0240% 1.2360%
LEIDOS HOLDINGS  INC. 5,456 $6,771,312,451.55 0.0140% 1.2170%
UNITED TECHNOLOGIES CORPORATION 16,428 $6,305,247,241.45 0.0400% 1.1330%
HONEYWELL INTERNATIONAL INC. 10,201 $6,134,031,888.71 0.0250% 1.1020%
L3 TECHNOLOGIES  INC. 7,812 $5,585,497,397.56 0.0190% 1.0040%
HUMANA INC. 366 $5,470,866,144.97 0.0010% 0.9830%
BOOZ ALLEN HAMILTON HOLDING CORPORATION 6,663 $4,806,703,134.57 0.0160% 0.8640%
AECOM 4,510 $4,601,219,528.98 0.0110% 0.8270%
BECHTEL GROUP, INC. 138 $3,801,504,993.05 0.0000% 0.6830%
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION 247,065 $3,732,698,312.37 0.5960% 0.6710%
FLUOR CORPORATION 544 $3,648,676,914.04 0.0010% 0.6550%
CENTENE CORPORATION 646,375 $3,607,789,168.46 1.5590% 0.6480%
HARRIS CORPORATION 3,373 $3,266,402,388.50 0.0080% 0.5870%
GENERAL ELECTRIC COMPANY 8,839 $3,193,853,335.77 0.0210% 0.5740%
BATTELLE MEMORIAL INSTITUTE INC 1,542 $2,857,524,446.97 0.0040% 0.5140%
GENERAL ATOMIC TECHNOLOGIES CORPORATION 763 $2,751,841,125.72 0.0020% 0.4950%
CACI INTERNATIONAL INC 3,553 $2,729,567,962.17 0.0090% 0.4910%
CALIFORNIA INSTITUTE OF TECHNOLOGY 2,775 $2,727,873,918.22 0.0070% 0.4900%
JACOBS ENGINEERING GROUP INC. 3,262 $2,626,449,064.26 0.0080% 0.4720%
CONSOLIDATED NUCLEAR SECURITY LLC 33 $2,619,037,207.33 0.0000% 0.4710%
ATLANTIC DIVING SUPPLY  INC. 46,732 $2,533,106,814.07 0.1130% 0.4550%
BELL BOEING JOINT PROJECT OFFICE 5,619 $2,449,376,019.38 0.0140% 0.4400%
ALLIANT TECHSYSTEMS INC. 1,219 $2,348,270,084.87 0.0030% 0.4220%
TRIWEST HEALTHCARE ALLIANCE CORP. 1,586,595 $2,342,155,335.12 3.8270% 0.4210%
AMERISOURCEBERGEN CORPORATION 375,426 $2,309,407,533.93 0.9050% 0.4150%
KBR  INC. 2,041 $2,065,955,913.90 0.0050% 0.3710%
CERBERUS CAPITAL MANAGEMENT, L.P. 1,116 $2,047,497,247.51 0.0030% 0.3680%
ANALYTIC SERVICES INC. 418 $2,014,000,510.46 0.0010% 0.3620%
LAWRENCE LIVERMORE NATIONAL SECURITY  LLC 36 $2,009,163,897.16 0.0000% 0.3610%
LOS ALAMOS NATIONAL SECURITY LLC 59 $1,891,048,226.66 0.0000% 0.3400%
DELOITTE LLP 2,251 $1,886,184,526.20 0.0050% 0.3390%
UNITED LAUNCH ALLIANCE  L.L.C. 99 $1,852,050,029.87 0.0000% 0.3330%
UT-BATTELLE  LLC 66 $1,764,064,340.79 0.0000% 0.3170%
CSRA INC. 2106 $1,716,922,498.08 0.0050% 0.3080%
ACCENTURE INC. 1,617 $1,690,850,719.15 0.0040% 0.3040%
TEXTRON INC. 6,034 $1,675,699,376.39 0.0150% 0.3010%
OSHKOSH CORPORATION 13,227 $1,614,038,945.61 0.0320% 0.2900%
THE MITRE CORPORATION 1,144 $1,596,726,682.83 0.0030% 0.2870%
MERCK & CO.  INC. 114 $1,583,695,405.09 0.0000% 0.2850%
SIERRA NEVADA CORPORATION 817 $1,578,628,198.07 0.0020% 0.2840%
UNITEDHEALTH GROUP INCORPORATED 390 $1,515,315,171.43 0.0010% 0.2720%
CHEMONICS INTERNATIONAL  INC 257 $1,512,957,703.07 0.0010% 0.2720%
AUSTAL LIMITED 292 $1,508,462,409.41 0.0010% 0.2710%
ENTERPRISE SERVICES LLC 16,626 $1,467,819,060.73 0.0400% 0.2640%
LEONARDO SPA 2,682 $1,384,998,258.53 0.0060% 0.2490%
B.L. HARBERT HOLDINGS  L.L.C. 137 $1,372,916,832.34 0.0000% 0.2470%
CALIFORNIA  STATE OF 1,798 $1,341,174,013.61 0.0040% 0.2410%
PAE HOLDING CORPORATION 672 $1,278,275,625.93 0.0020% 0.2300%
JOHNS HOPKINS UNIVERSITY 2,521 $1,268,359,755.02 0.0060% 0.2280%
INTERNATIONAL BUSINESS MACHINES CORPORATION 1,401 $1,209,810,857.14 0.0030% 0.2170%
BP P.L.C. 1,421 $1,136,852,723.59 0.0030% 0.2040%
SAVANNAH RIVER NUCLEAR SOLUTIONS  LLS 81 $1,119,826,899.87 0.0000% 0.2010%
PFIZER INC. 448 $1,092,615,282.58 0.0010% 0.1960%
MASSACHUSETTS INSTITUTE OF TECHNOLOGY 597 $1,067,566,128.01 0.0010% 0.1920%
ROCKWELL COLLINS  INC. 3,006 $1,035,964,115.86 0.0070% 0.1860%
THE AEROSPACE CORPORATION 471 $1,034,003,855.20 0.0010% 0.1860%
SPACE EXPLORATION TECHNOLOGIES CORP. 122 $1,014,446,994.59 0.0000% 0.1820%
ARCTIC SLOPE REGIONAL CORPORATION 2,415 $1,010,003,226.10 0.0060% 0.1820%
GLAXOSMITHKLINE PLC 289 $989,885,641.02 0.0010% 0.1780%
FEDEX CORPORATION 12,293,886 $971,090,768.70 29.6520% 0.1750%
VECTRUS, INC. 298 $962,460,460.66 0.0010% 0.1730%
PARSONS CORPORATION 1,064 $943,213,974.61 0.0030% 0.1700%
ROYAL DUTCH SHELL PLC 968 $937,379,110.11 0.0020% 0.1680%
ALION SCIENCE AND TECHNOLOGY CORPORATION 1,049 $898,603,424.60 0.0030% 0.1610%
MANTECH INTERNATIONAL CORPORATION 1,448 $858,160,144.81 0.0030% 0.1540%
ENGILITY CORPORATION 3,837 $832,215,876.60 0.0090% 0.1500%
DENALI HOLDING INC 3,178 $815,969,049.92 0.0080% 0.1470%
BERGER GROUP HOLDINGS, INC. 447 $798,807,889.33 0.0010% 0.1440%
AT&T INC. 13,295 $788,466,034.80 0.0320% 0.1420%
GREAT LAKES DREDGE & DOCK CORPORATION 92 $764,966,702.04 0.0000% 0.1370%
CARAHSOFT TECHNOLOGY CORPORATION 3,314 $758,910,489.31 0.0080% 0.1360%
ROLLS-ROYCE HOLDINGS PLC 819 $746,364,093.77 0.0020% 0.1340%
MISSION SUPPORT AND TEST SERVICES LLC 28 $701,229,986.92 0.0000% 0.1260%
PATRIOT TEAM 1,010 $696,468,231.46 0.0020% 0.1250%
CDW CORPORATION 3,486 $685,021,197.07 0.0080% 0.1230%
CARDINAL HEALTH  INC. 334,038 $684,965,596.68 0.8060% 0.1230%
CGI INC. 656 $680,300,079.48 0.0020% 0.1220%
EXPRESS SCRIPTS HOLDING COMPANY 229 $668,213,565.65 0.0010% 0.1200%
HENSEL PHELPS CONSTRUCTION CO 368 $667,494,808.44 0.0010% 0.1200%
ANHAM FZCO 25,502 $662,500,139.28 0.0620% 0.1190%
TRIAD NATIONAL SECURITY  LLC 4 $648,967,944.53 0.0000% 0.1170%
SERCO GROUP PLC 1,136 $644,617,652.86 0.0030% 0.1160%
INSIGHT ENTERPRISES  INC. 1,892 $643,186,554.19 0.0050% 0.1160%
TETRA TECH  INC. 1,981 $642,541,613.01 0.0050% 0.1150%
PERSPECTA INC. 3,686 $630,734,088.07 0.0090% 0.1130%
ENVIRONMENTAL CHEMICAL CORPORATION 170 $627,670,543.98 0.0000% 0.1130%
IRON BOW HOLDINGS, INC. 3,108 $619,682,917.20 0.0070% 0.1110%
LELAND STANFORD JUNIOR UNIVERSITY 287 $613,516,267.99 0.0010% 0.1100%
SANOFI 102 $610,021,981.52 0.0000% 0.1100%
NANA REGIONAL CORPORATION, INC. 1,172 599,058,746 0.0030% 0.1080%
BROOKHAVEN SCIENCE ASSOCIATES LLC 41 $594,116,923.33 0.0000% 0.1070%
MACANDREWS & FORBES INCORPORATED 1,771 $590,407,677.75 0.0040% 0.1060%
M1 SUPPORT SERVICES  L.P. 226 $579,909,688.45 0.0010% 0.1040%

(Data via the United States General Services Administration, or GSA, found here.)

Top 100 Defense Contractors FY2018 According to General Services Administration (GSA)

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Global Vendor Name Number of Actions Dollars Obligated %Total Actions %Total Dollars
LOCKHEED MARTIN CORPORATION 139,504 $38,927,027,508.13 0.3830% 10.7740%
BOEING COMPANY 19,142 $27,491,316,584.52 0.0520% 7.6090%
RAYTHEON COMPANY 12,684 $18,123,246,176.90 0.0350% 5.0160%
GENERAL DYNAMICS CORPORATION 28,976 $14,265,283,704.71 0.0790% 3.9480%
NORTHROP GRUMMAN CORPORATION 10,294 $10,790,731,503.74 0.0280% 2.9860%
HUNTINGTON INGALLS INDUSTRIES  INC. 3,727 $7,089,660,793.13 0.0100% 1.9620%
BAE SYSTEMS PLC 9,825 $6,776,293,604.49 0.0270% 1.8760%
UNITED TECHNOLOGIES CORPORATION 15,815 $6,176,503,851.91 0.0430% 1.7090%
HUMANA INC. 240 $5,401,357,660.02 0.0010% 1.4950%
L3 TECHNOLOGIES  INC. 7,358 $5,344,931,166.50 0.0210% 1.4790%
CENTENE CORPORATION 221 $2,964,029,499.45 0.0010% 0.8200%
GENERAL ELECTRIC COMPANY 6,544 $2,929,659,044.19 0.0180% 0.8110%
FLUOR CORPORATION 422 $2,782,474,916.74 0.0010% 0.7700%
LEIDOS HOLDINGS  INC. 3,281 $2,764,752,181.70 0.0090% 0.7650%
MCKESSON CORPORATION 40,798 $2,662,128,541.57 0.1120% 0.7370%
GENERAL ATOMIC TECHNOLOGIES CORPORATION 697 $2,631,563,579.26 0.0020% 0.7280%
BELL BOEING JOINT PROJECT OFFICE 5,619 $2,449,376,019.38 0.0150% 0.6780%
ATLANTIC DIVING SUPPLY  INC. 45,767 $2,429,020,215.34 0.1260% 0.6720%
BOOZ ALLEN HAMILTON HOLDING CORPORATION 3,634 $2,312,341,893.31 0.0100% 0.6400%
AMERISOURCEBERGEN CORPORATION 375,318 $2,307,941,184.04 1.0290% 0.6390%
HARRIS CORPORATION 2,967 $2,280,387,217.87 0.0080% 0.6310%
ANALYTIC SERVICES INC. 268 $2,014,442,943.57 0.0010% 0.5580%
BECHTEL GROUP, INC. 91 $1,887,151,629.49 0.0000% 0.5220%
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION 246,065 $1,884,869,719.79 0.6750% 0.5220%
CERBERUS CAPITAL MANAGEMENT, L.P. 723 $1,770,926,878.09 0.0020% 0.4900%
AECOM 2,677 $1,735,685,953.26 0.0070% 0.4800%
KBR  INC. 1,715 $1,666,901,190.98 0.0050% 0.4610%
TEXTRON INC. 5,912 $1,645,168,407.36 0.0160% 0.4550%
OSHKOSH CORPORATION 13,157 $1,603,699,082.18 0.0360% 0.4440%
ALLIANT TECHSYSTEMS INC. 987 $1,518,360,036.25 0.0030% 0.4200%
CACI INTERNATIONAL INC 2,325 $1,515,208,813.69 0.0060% 0.4190%
AUSTAL LIMITED 292 $1,508,462,409.41 0.0010% 0.4180%
UNITED LAUNCH ALLIANCE  L.L.C. 53 $1,396,519,717.87 0.0000% 0.3870%
LEONARDO SPA 2,485 $1,363,819,004.22 0.0070% 0.3770%
HONEYWELL INTERNATIONAL INC. 9,635 $1,313,370,203.48 0.0260% 0.3640%
UNITEDHEALTH GROUP INCORPORATED 182 $1,184,166,306.04 0.0000% 0.3280%
SIERRA NEVADA CORPORATION 718 $1,174,026,866.71 0.0020% 0.3250%
BP P.L.C. 1,421 $1,136,852,723.59 0.0040% 0.3150%
MASSACHUSETTS INSTITUTE OF TECHNOLOGY 404 $1,037,072,470.96 0.0010% 0.2870%
ROCKWELL COLLINS  INC. 2,788 $974,544,973.65 0.0080% 0.2700%
JACOBS ENGINEERING GROUP INC. 1,803 $974,252,877.34 0.0050% 0.2700%
THE AEROSPACE CORPORATION 24 $965,429,996.79 0.0000% 0.2670%
VECTRUS, INC. 289 $962,520,902.50 0.0010% 0.2660%
FEDEX CORPORATION 12,292,246 $942,686,669.79 33.7100% 0.2610%
ROYAL DUTCH SHELL PLC 968 $937,379,110.11 0.0030% 0.2590%
JOHNS HOPKINS UNIVERSITY 1,802 $894,625,654.14 0.0050% 0.2480%
THE MITRE CORPORATION 223 $850,536,813.14 0.0010% 0.2350%
BERGER GROUP HOLDINGS, INC. 252 $786,827,979.57 0.0010% 0.2180%
GREAT LAKES DREDGE & DOCK CORPORATION 92 $764,966,702.04 0.0000% 0.2120%
ALION SCIENCE AND TECHNOLOGY CORPORATION 879 $730,347,933.32 0.0020% 0.2020%
ROLLS-ROYCE HOLDINGS PLC 737 $725,011,560.92 0.0020% 0.2010%
PATRIOT TEAM 1,010 $696,468,231.46 0.0030% 0.1930%
ANHAM FZCO 25,502 $662,500,139.28 0.0700% 0.1830%
EXPRESS SCRIPTS HOLDING COMPANY 101 $661,614,469.93 0.0000% 0.1830%
ENTERPRISE SERVICES LLC 16,101 $630,107,504.40 0.0440% 0.1740%
ENVIRONMENTAL CHEMICAL CORPORATION 156 $627,201,417.57 0.0000% 0.1740%
INSIGHT ENTERPRISES  INC. 1,461 $615,897,632.23 0.0040% 0.1700%
MACANDREWS & FORBES INCORPORATED 1,736 $590,235,179.83 0.0050% 0.1630%
M1 SUPPORT SERVICES  L.P. 212 $578,550,529.47 0.0010% 0.1600%
H SQUARED INC 1,465 $571,144,773.94 0.0040% 0.1580%
CARDINAL HEALTH  INC. 333,117 $559,368,525.70 0.9140% 0.1550%
SOUTHERN COMPANY 16 $522,955,011.74 0.0000% 0.1450%
VIASAT  INC. 441 $520,318,873.79 0.0010% 0.1440%
GOVERNMENT OF CANADA 2,126 $497,853,524.67 0.0060% 0.1380%
PARSONS CORPORATION 606 $494,040,319.35 0.0020% 0.1370%
VALERO ENERGY CORPORATION 100 $493,993,863.55 0.0000% 0.1370%
PAE HOLDING CORPORATION 229 $479,741,825.48 0.0010% 0.1330%
SUPPLYCORE INC. 119,720 $474,312,246.87 0.3280% 0.1310%
ALSEAL CONTRACTING AND TRADING COMPANY 17 $456,216,943.25 0.0000% 0.1260%
CSRA INC. 609 $436,588,454.41 0.0020% 0.1210%
NAVISTAR INTERNATIONAL CORPORATION 271 $432,415,947.56 0.0010% 0.1200%
CFM INTERNATIONAL  INC. 1,269 $423,159,534.32 0.0030% 0.1170%
ADNOC DISTRIBUTION 57 $421,693,125.20 0.0000% 0.1170%
JOHNS HOPKINS HEALTH SYS CORP 20 $414,532,461.71 0.0000% 0.1150%
HENSEL PHELPS CONSTRUCTION CO 155 $411,102,728.44 0.0000% 0.1140%
ENGILITY CORPORATION 1,501 $410,999,252.32 0.0040% 0.1140%
TORCH TECHNOLOGIES  INC. 631 $409,309,367.66 0.0020% 0.1130%
CONSORTIUM MANAGEMENT GROUP  INC. 85 $407,483,977.95 0.0000% 0.1130%
AIRBUS HELICOPTERS  INC. 154 $406,784,789.06 0.0000% 0.1130%
CHUGACH ALASKA CORPORATION 922 $406,235,092.43 0.0030% 0.1120%
NOBLE SALES CO.  INC. 18,311 $400,809,612.44 0.0500% 0.1110%
MICROSOFT CORPORATION 379 $400,242,714.12 0.0010% 0.1110%
WORLD WIDE TECHNOLOGY HOLDING CO.  INC. 1,728 $399,113,402.72 0.0050% 0.1100%
MICHAEL BAKER INTERNATIONAL, LLC 43 $398,597,066.66 0.0000% 0.1100%
INTERNATIONAL BUSINESS MACHINES CORPORATION 342 $397,827,336.19 0.0010% 0.1100%
CROWLEY HOLDINGS  INC 135,819 $397,212,729.26 0.3720% 0.1100%
CDW CORPORATION 1,834 $395,199,220.01 0.0050% 0.1090%
ANDEAVOR LLC 259 $393,808,202.34 0.0010% 0.1090%
GEORGIA TECH RESEARCH CORPORATION 852 $392,687,264.34 0.0020% 0.1090%
THE CHARLES STARK DRAPER LABORATORY INC 263 $391,233,907.24 0.0010% 0.1080%
HIGHMARK INC. 40 $387,609,597.58 0.0000% 0.1070%
ACCENTURE INC. 474 $373,955,786.40 0.0010% 0.1040%
DELOITTE LLP 453 $371,592,800.40 0.0010% 0.1030%
REDSTONE DEFENSE SYSTEMS 609 $366,588,992.81 0.0020% 0.1010%
APTIM FEDERAL SERVICES  LLC 544 $364,829,306.04 0.0010% 0.1010%
CARAHSOFT TECHNOLOGY CORPORATION 1,369 $358,655,359.99 0.0040% 0.0990%
MARTIN’S POINT HEALTH CARE  INC. 19 $355,545,000.00 0.0000% 0.0980%
PERSPECTA INC. 3,553 $354,214,657.78 0.0100% 0.0980%
SERCO GROUP PLC 1,042 $351,702,756.39 0.0030% 0.0970%
AAR CORP. 4,302 $347,028,004.84 0.0120% 0.0960%

Please note that the chart above only includes data designated by the GSA as Department of Defense-specific, and may not include any other agencies or departments.

(Data via GSA, found here.)

The 20 Largest Arms-Producing and Military Services Companies in the World in 2017

A double bar graph depicting 20 companies and their arms sales compared to total sales.

For thirteen of the twenty largest arms-producing and military services companies, at least 50 percent of their total sales is based in arms sales. However, the arms sales of companies with the top three highest total sales, Boeing, Airbus, and United Technologies Corporation, are less than thirty percent of total sales.

(Data via Statista, found here.)

Conclusion

Government contractors should be aware of increasing calls for accountability from the GAO and other government agencies. The DCAA plans to greatly increase the number of audits it completes in the next few years. Based on the issues the GAO has identified throughout DoD systems, it’s possible that there will be other efforts to increase accountability and decrease cost growth in government contracts, especially in defense contracts.

Growing contractor regulations and requirements can be a pain for contractors to comply with. But with this challenge comes opportunity. Several sources predict increased defense and general government spending. This means greater revenue opportunity for government contractors.

However, small businesses may face stiff competition from top contractors, as their share of contract spending remains stagnant. Top contractors have a large share of the contract spending pie and are unlikely to give it up without a fight.

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