The U.S. defense budget topped $850 billion in fiscal 2022, more than the combined military spending of the next 10 countries combined. This money goes to fund a wide range of obligations, from operations to payroll for troops and civilian defense personnel. The bulk of the U.S. military budget, however, is spent on contracts with companies in the private sector.
The Defense Department does more business through private contracts than all other federal agencies combined. The Pentagon relies on contractors for services including research and development, weapon systems procurement, facility maintenance, and equipment repair. Outsourcing to third parties in the private sector allows the government to more rapidly and effectively adapt to changing circumstances and needs – though reliance on contractors also raises the potential for waste, fraud, and abuse.
The latest available government data shows that the Pentagon spent $2.0 billion on private sector contracts in Tennessee in 2021. No company in the state received more federal defense dollars that year than BAE Systems, which brought in $451.7 million in military contracts – or 22.1% of all contractor spending in the state.
Other major defense contractors operating in Tennessee include Bechtel Group, FedEx, and Chemring Group, which received $277.4 million, $239.2 million, and $88.7 million, respectively, in 2021.
All data in this story is from the Defense Department’s report, Defense Spending By State Fiscal Year 2021.
StateTotal contract spending, 2021 ($)Top defense contractor, 2021Spending on top defense contractor, 2021 ($)Alabama12.2 billionBoeing2.1 billionAlaska1.7 billionArctic Slope Regional Corp.233.1 millionArizona12.3 billionRaytheon Technologies6.2 billionArkansas1.2 billionAerojet Rocketdyne591.3 millionCalifornia40.2 billionNorthrop Grumman4.5 billionColorado8.4 billionLockheed Martin2.3 billionConnecticut18.4 billionGeneral Dynamics8.7 billionDelaware474.2 millionAstraZeneca PLC287.1 millionFlorida21.7 billionLockheed Martin6.3 billionGeorgia7.6 billionLockheed Martin2.3 billionHawaii2.6 billionHensel Phelps Construction212.7 millionIdaho206.4 millionBrad Hall & Associates45.3 millionIllinois7 billionNorthrop Grumman1.1 billionIndiana5.7 billionEli Lilly and Co.1.9 billionIowa2.1 billionRaytheon Technologies1.1 billionKansas1.5 billionWebuild218.8 millionKentucky10.6 billionHumana7.1 billionLouisiana1.7 billionThoma-Sea Marine Constructors197.4 millionMaine2.4 billionGeneral Dynamics1.1 billionMaryland17.9 billionJohns Hopkins University1.6 billionMassachusetts20.1 billionModerna, Inc.6.9 billionMichigan5.1 billionGeneral Dynamics2.3 billionMinnesota1.5 billionNorthrop Grumman340.7 millionMississippi3.8 billionHuntington Ingalls2 billionMissouri10.5 billionBoeing6.9 billionMontana246.8 millionS & K Technologies65.7 millionNebraska690.6 millionPeraton Corp.97.1 millionNevada1.8 billionSierra Nevada Corp.396.8 millionNew Hampshire2 billionBAE Systems1.1 billionNew Jersey7.3 billionLockheed Martin1.6 billionNew Mexico1.8 billionApplied Research Associates138.7 millionNew York27.9 billionPfizer, Inc.13.3 billionNorth Carolina4.2 billionGlaxoSmithKline314.5 millionNorth Dakota211.4 millionFour Tribes Enterprises LLC20.6 millionOhio6.3 billionGeneral Electric757.5 millionOklahoma3 billionBoeing1.1 billionOregon800 millionVigor Industrial101 millionPennsylvania13.4 billionAmerisourceBergen2 billionRhode Island756.9 millionRaytheon Technologies177.8 millionSouth Carolina3.1 billionScientific Research Corp.142.2 millionSouth Dakota225.6 millionSterling Computers75.1 millionTennessee2 billionBAE Systems451.7 millionTexas35.1 billionLockheed Martin13.7 billionUtah4.3 billionNorthrop Grumman2.1 billionVermont349.5 millionRaytheon Technologies115.2 millionVirginia42.6 billionHuntington Ingalls4.1 billionWashington11.7 billionBoeing7.7 billionWest Virginia505.4 millionNorthrop Grumman293.8 millionWisconsin4.5 billionOshkosh Corp.2.1 billionWyoming125.1 millionM1 Support Services24.9 million
