House Republicans this week failed to advance a bill to fund the Pentagon in fiscal year 2024, which begins October 1.
Some members of the GOP’s House Freedom Caucus have vowed to oppose advancing the legislation without securing additional cuts to non-military spending. No Democrats support the bill because it includes several conservative provisions, like prohibiting Pentagon funds from being used for certain reproductive health care, including abortion services, for enlisted personnel. It would also defund the Pentagon’s diversity and inclusion programs.
Avoiding scrutiny is the bill’s record $826 billion price tag, despite the historic level of privatization of public funds it portends. A Sludge analysis of military spending and contract data estimates that more than half of the fiscal year 2024 Pentagon budget will go to private contractors, and one-sixth of it to just five companies.
Based on the average share of the military budget obligated to contracts over the last decade, the pending $826 billion bill will likely produce around $450 billion in revenue for military contractors.
How much military spending will eventually go to contractors in a given year is fairly predictable—the value of contracts generally grows and shrinks proportionately as the overall budget does. For example, the Pentagon budget increased by $171 billion from 2017 to 2022, but the Pentagon’s spending on contracts kept up, increasing by $93 billion during the same stretch. In both fiscal years 2017 and 2022, the share of the budget obligated to contracts was 54%.
This is nearly identical to the 10-year average. From fiscal years 2013 to 2022, the Pentagon spent $6.4 trillion. Over $3.5 trillion of that—55%—went to contractors.
This column chart shows the growth of military spending and military contract spending over time. In 2013, the Department of Defense spent $316 billion on contracts and $262 billion on everything else; in 2022, it was $420 billion to $357 billion.
A handful of companies dominate the military contracting market. Lockheed Martin, Raytheon (now called RTX), Northrop Grumman, Boeing, and General Dynamics have been the top annual recipients of Pentagon contracts eight times in the last decade. From fiscal years 2013 to 2022, 30% of military contract spending, or $1.1 trillion, went to these five firms alone.
This chart shows the approximate share of annual military contracting dollars from fiscal years 2013 to 2022 that went to the top five contractors: Lockheed Martin, Raytheon (now RTX), Northrop Grumman, Boeing, and General Dynamics.
On average, the top five contractors ate 17% of the yearly military budget during this period. Based on the 10-year average, one-sixth of the $826 billion Pentagon budget for fiscal year 2024—$140 billion—will go to just five companies.
This column chart shows the top five contractors’ share of overall military spending from fiscal years 2013 to 2022. In 2022, the top five contractors received $122 billion out of $777 billion in overall military spending.
