Today, the Department of Defense’s Office of Local Defense Community Cooperation (formerly the Office of Economic Adjustment) released its Fiscal Year 2020 Defense Spending by State report to help states and communities better understand the components of defense spending on procurement and personnel. The report’s graphs, maps, and tables present a range of findings, such as total spending figures, categories of contracted goods and services, major defense vendors, and numbers and types of defense personnel. This snapshot provides public and private leaders with a starting place to assess how defense investments across installations and the private sector can be optimized by supporting regional innovation, industrial capability and capacity, supply chain resilience, and cultivating a skilled workforce.
Defense spending rose in Fiscal Year 2020. DoD contract obligations and payroll spending in the 50 states and the District of Columbia increased by $43 billion, or 8 percent, over the prior year. This was driven by a 9 percent increase in DoD contract obligations. Personnel spending in the 50 states and the District of Columbia increased by 5 percent.
DoD contract obligations and payroll spending in the 50 states and the District of Columbia totaled $593.9 billion, which is 2.8 percent of the country’s gross domestic product (GDP). If the total spending were divided across every U.S. resident, it would amount to $1,803 per U.S. citizen. Of those funds, $439.4 billion (74 percent) were spent on contracts for products and services, while the remaining $154.6 billion (26 percent) paid the salaries of DOD personnel.
Texas, Virginia, and California topped the list of recipients for overall defense spending. However, Virginia, Hawaii, and Connecticut ranked highest when considering defense spending’s impact on their states’ GDP.
The top ten states for total Defense spending in Fiscal Year 2020 were:
|Rank||State||Defense Spending (billions)|
Texas, Arizona and Maryland had the largest increases in DoD spending from Fiscal Year 2019 to 2020. This was driven by large contracts to Lockheed Martin in Texas, Raytheon in Arizona, and Lockheed Martin in Maryland. These contracts were related to the production of the F-35, missiles, and ship building and repair.
The top ten recipients of Defense contracts in Fiscal Year 2020 were:
|Rank||Company||Defense Spending (billions)|
All ten companies were on this list in Fiscal Year 2019. L3Harris Technologies (73 percent), Lockheed Martin (60 percent), and Raytheon (29 percent) had the largest year over year increases.
Patrick O’Brien, the Director of the Office of Local Defense Community Cooperation, states: “this report is presented as an opportunity for governors, local officials, and other leaders to understand the businesses/industries and workers presently supporting our nation’s defense, so they may plan and carry out the necessary transformations and support them to remain competitive, be responsive to our future national security needs, and remain resilient to natural and man-made threats.”
Conducted between March and September 2021, the analysis primarily entailed an examination of DoD funded prime- and sub-award contract data and defense personnel and payroll figures. Findings are drawn from an array of sources, including the DoD’s Defense Manpower Data Center and USAspending.gov, which is managed by the U.S. Department of the Treasury.
The FY20 report, as well as previous years’ reports, can be found on the OLDCC website at https://oldcc.gov/dsbs-fy2020.