Today, the Department of Defense’s Office of Local Defense Community Cooperation released its Fiscal Year 2021 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.
“Understanding the depth and reach of our contract spending is essential as we strive to strengthen our defense industrial base,” said William LaPlante, Under Secretary of Defense for Acquisition & Sustainment. “The Department of Defense requires resilient, diverse, and secure supply chains to limit vulnerabilities and ensure the development and sustainment of critical capabilities. This report is a great tool our state and local partners should use to better understand and strengthen supply chains in their regions, which are essential to national security, economic security, and our technological competitiveness and innovation.”
Defense spending fell in Fiscal Year 2021. Department of Defense (DoD) contract obligations and payroll spending in the 50 states and the District of Columbia decreased by $34.9 billion, or 5.6 percent, over the prior year. This was the product of a 9.2 percent decrease in DoD contract obligations. Personnel spending in the 50 states and the District of Columbia, however, increased by 3.5 percent.
DoD contract obligations and payroll spending in the 50 states and the District of Columbia totaled $559 billion, which is 2.3 percent of the country’s gross domestic product (GDP). If the total spending were divided across every U.S. resident, it would amount to $1,684 per U.S. citizen. Of those funds, $398.7 billion (71 percent) were spent on contracts for products and services, while the remaining $160.3 billion (29 percent) paid the salaries of DOD personnel.
Virginia, California, and Texas topped the list of recipients for overall defense spending. However, Virginia, Hawaii, and the District of Columbia ranked highest when considering defense spending impacts on their respective states GDP.
The top ten states for total Defense spending in Fiscal Year 2021 were:
Defense Spending (billions)
New York, Washington and Massachusetts had the largest overall increases in DoD spending from Fiscal Year 2019 to 2020. This was driven by large contracts to Pfizer, Inc. and Regeneron Pharmaceuticals, Inc. in New York, Boeing and ANA Holdings in Washington, and Moderna, Inc. in Massachusetts. The contracts in New York and Massachusetts were related to COVID-19 vaccine and treatment purchases by DoD, in coordination with the U.S. Department of Health and Human Services. The contracts in Washington procured and maintained aircraft and missiles.
The top ten recipients of Defense contracts in Fiscal Year 2021 were:
|Rank||Company||Defense Spending (billions)|
Eight of the ten companies were on this list in Fiscal Year 2020. Pfizer, Inc. and Moderna, Inc. were both new to the list and are anomalies for traditional defense spending.
According to Patrick O’Brien, the Director of the Office of Local Defense Community Cooperation, “the contract and personnel data in this report presents governors, local officials, and other leaders with topline information to help them better understand the key role businesses and industries play supporting our nation’s defense. States and localities should use this data to identify opportunities to build and strengthen key supply chains, further develop workforce skills, and enhance and improve our military installations and defense industrial base to make them more resilient and competitive.”
This analysis primarily entailed an examination of DoD funded prime- and sub-award contract data and defense personnel and payroll figures 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 FY21 report, as well as previous years’ reports, can be found on the OLDCC website at: https://oldcc.gov/dsbs-fy2021.
A supplemental analysis report of DoD contract and personnel spending in American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the Virgin Islands of the United States will be available later this year.