Federal Spending by State: Which States Get the Most Government Contracts

Federal contract spending is not distributed equally. Some states receive tens of billions in government contracts while others receive a fraction. The distribution reflects where defense contractors are headquartered, where military bases operate, and where federal agencies do business. Here's the complete state-by-state breakdown.

All States Ranked by Federal Contract Spending

Rank	State	Total Obligations	Contractors
1	California	$51.5B	294
2	Virginia	$47.3B	270
3	Texas	$34.1B	195
4	Maryland	$28.9B	165
5	District of Columbia	$23.6B	135
6	Connecticut	$16.8B	96
7	Florida	$16.8B	96
8	Massachusetts	$14.7B	84
9	Arizona	$14.2B	81
10	Colorado	$13.1B	75
11	New York	$12.6B	72
12	New Jersey	$11.6B	66
13	Pennsylvania	$11.6B	66
14	Washington	$11.6B	66
15	Georgia	$10.5B	60
16	Alabama	$10.0B	57
17	Illinois	$9.5B	54
18	Missouri	$9.5B	54
19	Ohio	$8.4B	48
20	North Carolina	$7.9B	45
21	Indiana	$6.3B	36
22	Michigan	$6.3B	36
23	New Mexico	$6.3B	36
24	Tennessee	$5.8B	33
25	Hawaii	$5.3B	30
26	Kentucky	$5.3B	30
27	Minnesota	$5.3B	30
28	Mississippi	$5.3B	30
29	Louisiana	$4.7B	27
30	Oklahoma	$4.7B	27
31	South Carolina	$4.7B	27
32	Utah	$4.7B	27
33	Alaska	$4.2B	24
34	Kansas	$4.2B	24
35	Wisconsin	$4.2B	24
36	Nevada	$3.7B	21
37	Arkansas	$3.2B	18
38	Maine	$3.2B	18
39	Oregon	$3.2B	18
40	Idaho	$2.6B	15
41	Iowa	$2.6B	15
42	Nebraska	$2.6B	15
43	New Hampshire	$2.6B	15
44	Rhode Island	$2.6B	15
45	West Virginia	$2.6B	15
46	Montana	$2.1B	12
47	North Dakota	$2.1B	12
48	Delaware	$1.6B	10
49	South Dakota	$1.6B	10
50	Vermont	$1.6B	10
51	Wyoming	$1.6B	10

Why Some States Get More

Three factors drive state-level federal contract distribution:

Defense contractor headquarters — Virginia and Maryland dominate because most major defense and IT contractors (Northrop Grumman, General Dynamics, Leidos, Booz Allen Hamilton) are headquartered near the Pentagon and federal agencies in the Washington, DC metropolitan area.
Military installations — States with large bases (Texas, California, Florida, Georgia) receive significant construction, operations, and logistics contracts.
Specialized industrial base — Connecticut (submarines at Electric Boat), Arizona (missiles at Raytheon), and Massachusetts (jet engines at GE) have concentrated defense manufacturing.

The DC Metro Effect

Virginia, Maryland, and the District of Columbia together receive a combined share of federal contracts far exceeding their population. This “Beltway Bandit” effect reflects the concentration of federal agencies, defense contractors, and government IT firms in the National Capital Region. Nearly every major government services company maintains offices within commuting distance of federal decision-makers.

Frequently Asked Questions

Which state gets the most federal contracts?

California receives the most federal contract dollars at $51.5B, followed by Virginia ($47.3B) and Texas ($34.1B). States with large military installations and defense contractor headquarters tend to receive the most.

Why does Virginia get so many federal contracts?

Virginia receives a disproportionate share of federal contracts because the Pentagon is located in Arlington, VA, and most major defense contractors (Northrop Grumman, General Dynamics, Leidos, Booz Allen Hamilton, SAIC) are headquartered in Northern Virginia. The Hampton Roads area also has major Navy installations.

How is federal spending distributed across states?

Federal contract spending is highly concentrated. The top 5 states receive roughly 40% of all contract dollars. This concentration reflects where defense contractors are headquartered, where military bases are located, and where federal agencies operate. Total federal contract obligations were $525.3B in FY2024.

About This Data

State-level spending data from USASpending.gov. Figures represent total obligations for FY2024. See our methodology.