Deep Dive
The Biggest Government Contractors
The top 20 federal contractors receive over $200 billion in taxpayer money each year. These companies build weapons systems, run IT infrastructure, provide healthcare services, and maintain critical government operations. Here is who they are and what they do.
The Top 20 Federal Contractors
Federal contract spending is highly concentrated. While over 300,000 entities receive federal awards, the top 20 capture a disproportionate share of total obligations.
Why Defense Dominates
Defense spending accounts for roughly half of all discretionary spending and an even larger share of contract dollars. The Department of Defense buys everything from aircraft carriers to cybersecurity services. The five largest defense contractors — Lockheed Martin, RTX (Raytheon), Boeing, General Dynamics, and Northrop Grumman — have been the government's biggest vendors for decades.
These companies maintain their positions through a combination of proprietary technology, massive capital investments, security clearances, and long-term program relationships. Building a fighter jet or nuclear submarine requires capabilities that few companies possess, creating natural barriers to entry.
Beyond Defense: IT, Healthcare, and Professional Services
Not all top contractors are defense companies. Major IT contractors (Leidos, Booz Allen Hamilton, SAIC) provide technology services across civilian and defense agencies. Healthcare companies administer Medicare and Medicaid programs. Construction firms build federal infrastructure. Professional services firms provide consulting, accounting, and management support.
The fastest-growing category of federal contracting is IT and cybersecurity, driven by digital modernization initiatives across all agencies. Cloud computing contracts (like the CIA's Commercial Cloud Enterprise and DoD's JWCC) are worth tens of billions.
How Companies Grow Their Government Business
The largest contractors grow through several strategies:
- Acquisitions: Buying smaller contractors to expand capabilities and capture their contracts
- IDIQ vehicles: Winning positions on major multi-award contracts, then competing for task orders
- Incumbent advantage: Winning recompetes of existing contracts where they have performance history and institutional knowledge
- Lobbying: Spending on lobbying to influence program funding decisions (tracked on LobbySpend)
Related Resources
Frequently Asked Questions
Lockheed Martin is consistently the largest federal contractor by total obligations, receiving over $40 billion per year primarily from the Department of Defense for programs like the F-35 fighter jet, missile defense systems, and space technology.
Over 300,000 unique entities receive federal contract awards in a typical year. However, spending is highly concentrated — the top 100 contractors receive roughly 40% of all contract dollars.
Yes. The government has a goal of awarding 23% of contract dollars to small businesses and has several programs to help, including small business set-asides, the 8(a) Business Development program, and HUBZone contracts. In FY2023, small businesses received about 27% of contract dollars.