OCTOBER 16, 2024 – Today, the Department of Defense’s Office of Local Defense Community Cooperation released its Fiscal Year 2023 Defense Spending by State report to help states and communities better understand how Defense procurement, personnel, and grant spending impact their economies.
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, numbers and types of defense personnel, and grants awarded by the Department of Defense (DOD). This snapshot provides public and private leaders with a starting place to assess how defense investments across installations, communities, and the private sector can be optimized by supporting regional innovation, industrial capability and capacity, supply chain resilience, and cultivating a skilled workforce.
“Our National Defense Industrial Strategy makes clear that a robust and resilient industrial base provides the enduring foundation for military advantage,” said Dr. William LaPlante, Under Secretary of Defense for Acquisition and Sustainment. “Businesses small and large across America are the heart of our industrial might, and this report is a tremendous resource that our state and local partners can use to better understand defense spending in their areas and strengthen supply chains.”
Defense spending – to include contract obligations, payroll spending, and grants in the 50 states and the District of Columbia – rose by $50.5 billion in Fiscal Year 2023 from the prior fiscal year. This is the result of an 8.9 percent increase in DoD contract obligations, a 5.0 percent increase in payroll spending, and a 7.5 percent increase in grant spending.
DoD contract obligations, payroll spending, and grant awards in the 50 states and the District of Columbia totaled $609.2 billion, which is 2.2 percent of the country’s gross domestic product (GDP). If the total spending were divided across every U.S. resident, it would amount to $1,819 per U.S. citizen. Of those funds, $431.4 billion (71 percent) were obligated through contracts for products and services, $167.4 billion (27 percent) paid the salaries of DoD personnel, and $10.4 billion (2 percent) were awarded as grants.
Texas, Virginia, and California remain as the top recipients for overall defense spending in Fiscal Year 2023, with Texas moving to the number one spot, seeing an $8.9 billion increase over Fiscal Year 2022. However, Virginia, Hawaii, and Connecticut ranked highest when considering defense spending impacts on their respective state GDPs.
The top ten states for total Defense spending in Fiscal Year 2023 were:
| Rank | State | Defense Spending (billions) |
| 1 | Texas | $71.6 |
| 2 | Virginia | $68.5 |
| 3 | California | $60.8 |
| 4 | Florida | $32.2 |
| 5 | Maryland | $27.8 |
| 6 | Connecticut | $25.3 |
| 7 | Pennsylvania | $21.8 |
| 8 | Arizona | $17.0 |
| 9 | Massachusetts | $16.8 |
| 10 | Washington | $15.5 |
The top ten recipients of Defense contracts in Fiscal Year 2023 were:
| Rank | Company | Defense Spending (billions) |
| 1 | Lockheed Martin | $61.4 |
| 2 | RTX Corporation | $24.1 |
| 3 | General Dynamics | $22.9 |
| 4 | Boeing | $20.1 |
| 5 | Northrup Grumman | $16.3 |
| 6 | Huntington Ingalls | $10.5 |
| 7 | Humana | $7.8 |
| 8 | L3Harris Technologies | $7.5 |
| 9 | BAE Systems | $7 |
| 10 | Cencora | $4.4 |
Nine of the ten companies were on this list in Fiscal Year 2022. RTX Corporation was previously Raytheon Technologies. Cencora was formerly known as AmerisourceBergen but was not previously on the top ten list.
According to Patrick O’Brien, the Director of the Office of Local Defense Community Cooperation, “This report is an enabler for the Department’s state and local partners to better understand and develop civilian innovation and modernization initiatives for the continued responsiveness of the defense industrial base and supply chains to our national security needs while also ensuring local infrastructure and services can sustain our local installations and the communities that host them and our military families.”
This analysis primarily entailed an examination of DoD funded prime- and sub-award contract data, grant awards, and defense personnel and payroll figures drawn from an array of sources, including DoD’s Defense Manpower Data Center and USAspending.gov, which is managed by the U.S. Department of the Treasury. This spending includes support for the National Guard as well as Research, Development and Evaluation activities.
The FY23 report, as well as previous years’ reports, can be found on the OLDCC website at https://oldcc.gov/dsbs-fy2023
A supplemental analysis report of DoD contract, personnel, and grant 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.