2020 Was Good Year for Contractors

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Federal contract obligations reached a record high of $682 billion in fiscal year 2020, the fifth straight year of spending growth, according to Bloomberg Government.

The recently released “BGOV200 Federal Industry Leaders Study” ranked the top 200 vendors by value of prime, unclassified contracts awarded by U.S. agencies.

The annual report analyzed the top contracts at 92 agencies and departments, in 20 different purchasing categories.

Total federal contract spending increased by 14 percent in fiscal year 2020, up from $599 billion the previous year, the study found.

“The federal government spent $83 billion more on federal contractors in fiscal 2020 than it did in fiscal 2019,” the report said.

“The money for contractors primarily came from the $1.6 trillion in discretionary funding enacted for fiscal 2020, including $714 billion for defense and $914 billion for non-defense,” it added. “However, the $2.3 trillion COVID-19-related stimulus package signed into law in March 2020 provided a boost well beyond forecasts.”

The share of obligations won by the top 200 contractors was 65 percent, about the same as in 2019, according to the report.

As the COVID-19 pandemic raged, the medical spending category soared 50 percent, it noted.

Other categories that saw large percent increases include: aircraft, ships, subs and land combat vehicles, 41 percent; clothing, textiles, and subsistence supplies and equipment, 32 percent; research and development, 26 percent; industrial products and services, 16 percent; weapons and ammunition, 13 percent; information technology, 10 percent; and professional services, 7 percent.

Defense contract spending rose to $447 billion in fiscal 2020, a $42 billion, or about 10 percent, bump from the previous year, according to the study.

Among the military departments, the Navy and Army increased obligations by 23 percent and 9 percent, respectively, while the Air Force remained flat. The Navy accounted for $156.7 billion, the Army $115.9 billion and the Air Force $83.5 billion.

Civilian agencies accounted for the remaining $235.2 billion in contract obligations.

“Nearly all agencies had an uptick year over year,” the report said.

The COVID-19 pandemic put the Department of Health and Human Services “in overdrive,” it noted, with HHS spending increasing by $14.6 billion, for a total of $41.2 billion.

Meanwhile, the Department of Veterans Affairs boosted spending by $8.3 billion, for a total of $37 billion. The Department of Energy also saw a significant uptick, going from $28.2 billion to $35.6 billion, according to the study.

Topics: Defense Contracting, Budget