D.C. area still a powerhouse for federal spending

January 19

One-fifth of all fiscal 2012 federal contract obligations were spent in the District, Maryland and Virginia, making the region a hot spot for government work.

Virginia had the highest level of reported federal spending in that year, followed by California and Texas.

Maryland and the District made the top 10 list for reported spending, landing at fourth and sixth on the list, respectively. Combined, the District, Maryland and Virginia had a total of $101.1 billion in reported federal spending.

This three-state region dominates federal information technology spending. In fiscal 2012, 50 percent of all federal IT obligations were made in the region. In professional services, the area took home 33 percent of all spending, while 18 percent of all research and development obligations were made in the region.

What’s unusual about the region, compared with other areas of high-level federal spending, is the nearly even split between defense and civilian work. Defense made up about 55 percent — or $230.4 billion in fiscal 2012, while civilian work represented about 45 percent, coming in at $186 billion that year.

When it comes to civilian departmental spending, the region is equally dominant in key areas. For instance, 60 percent of all Commerce Department spending, 54 percent of all Department of Homeland Security obligations and 51 percent of all Transportation Department spending went to the District, Maryland and Virginia. The area also commands significant Justice Department and Department of Health and Human Services spending.

Still, there aren’t necessarily signs of growth. In fiscal 2012, federal spending in Virginia was flat, with decreased spending by three of the five highest spending departments: the Army, the Pentagon and the Department of Homeland Security. The Navy and Air Force’s spending in the commonwealth grew.

Among the top five markets for Virginia, four of the five saw growth — IT, professional services, defense and aerospace, and research and development.

Deltek has identified more 1,300 regional opportunities anticipated for release within the next 18 months that have a combined total value of $103 billion, with more than half of that value concentrated in Maryland.

Jennifer Sakole is principal research analyst at Herndon-based Deltek, which analyzes the government contracting market and can be found at www.deltek.com.

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