The United States spent about $600 billion on defense in 2017 – roughly half of its discretionary budget. The U.S. has a larger military budget than the next eight countries combined, including nations like Russia, China, and France.
Due to the demands placed on the U.S. military, the companies benefiting the most from government spending are, more often than not, defense contractors. The Department of Defense or a branch of the armed services rank as the biggest government spender for 24 of the 30 companies on this list.
Government spending with defense companies is driven in large part by the high cost of military technology. Stealth bombers, fighter jets, and nuclear-powered submarines integrate state-of-the-art technology, often aiming to improve and provide the best defensive, offensive, and protective tools — and stay ahead of the curve. As a result, racking up a bill with defense companies is not difficult. A single F-35 fighter jet from Lockheed Martin costs just under $100 million — and the company plans on building 2,400 of them in the coming years to meet contractual obligations. Similarly, a single Northrop Grumman B-2 bomber costs an estimated $2 billion, adjusted for inflation, and the U.S. Air Force currently has 20 in operation.
In addition to defense contractors, health insurance companies make up a considerable portion of this list. As the single largest employer in the country, the federal government provides jobs with benefits to millions of people, not including veterans and their families many of whom the government is obligated to provide insurance. Partially as a result, contractors like Humana and UnitedHealth Group each received billions in federal dollars in 2016.
It is no coincidence that the majority of companies on this list are American. The Buy American Act, signed into law by President Hoover in 1933, restricts the ability of government agencies and departments to procure from foreign companies. Of the 30 companies on this list, U.K.-based BAE Systems is the only one headquartered outside of the United States. Even still, over a third of all BAE employees work in the United States.
While all of the companies on this list benefit tremendously from government contracts, some are more dependent on federal funds than others. For example, the $43 billion the government paid to Lockheed Martin in fiscal 2016 due to contract obligations accounted for about 92% of its total revenue that year. Meanwhile, for companies like Boeing, the private sector accounts for a much larger share of their business. Boeing-built commercial airliners total more than 10,000 and comprise nearly half of all in-service commercial aircraft worldwide. With such a large commercial segment, payments received through federal government contracts accounted for just 28% of the company’s revenue in 2016.
To identify the companies gaining the most from the federal government, 24/7 Wall St. reviewed data compiled by the General Services Administration and accessed through the Federal Procurement Data System. Companies were ranked on total payments received from U.S. government contract obligations in the 2016 government fiscal year. Data on individual contracts also came from the Federal Procurement System. Corporate revenues came from publicly available financial documents when available and are for the most recent fiscal year, which does not necessarily align with the federal government’s fiscal year.