The Contractor Monopoly
Published: February 2025
Just 10 companies capture 64% of every federal contract dollar. Here's how concentration, lobbying, and no-bid deals created a government contracting cartel.
Top 10 Share
64%
of all federal contracts
Top 10 Total
$183.1B
per year
HHI Index
719
Unconcentrated market (HHI < 1500)
#1: Lockheed Martin
$58.8B
20.63% alone
Lockheed Martin receives $58.8B/year in federal contracts — more than the GDP of 100+ countries.
Top 10 Federal Contractors by Contract Value
Contract dollars awarded in FY2025. Source: USASpending.gov
What Is the HHI Index?
The Herfindahl-Hirschman Index (HHI) measures market concentration. It's calculated by squaring each company's market share and summing the results. The DOJ uses it to evaluate mergers — an HHI below 1,500 means "unconcentrated," 1,500–2,500 is "moderately concentrated," and above 2,500 is "highly concentrated."
719
Federal Contracting
~2,500
Airlines
~2,700
Beer Industry
~2,800
Wireless Carriers
At 719, the federal contracting market looks competitive overall. But zoom into individual agencies and the picture changes dramatically — DOD's top 5 contractors control over 70% of its spending.
If the Top 10 Were a Country...
The combined contract revenue of the top 10 contractors ($183.1B) would make them larger than the economies of most nations.
Contractor Categories: Defense vs IT vs Healthcare
Total contract value by contractor category. Source: USASpending.gov
Competition is supposed to drive down costs. So why does one-third of federal contracting happen without competitive bidding?
Agency Dependency: Who Relies Most on a Single Contractor?
Some agencies are deeply dependent on just a few companies. When the top 5 contractors control 84% of an agency's spending, that's not a market — it's a dependency.
| # | Agency | Top Contractor | Top Contractor % | Top 5 %↓ | Total Contracts |
|---|---|---|---|---|---|
| 1 | Department Of Veterans Affairs | Optum Public Sector Solutions, | 38.7% | 84.5% | $58.1B |
| 2 | Department Of Defense | Lockheed Martin Corporation | 35.0% | 70.2% | $151.9B |
| 3 | Department Of Health And Human Services | Maximus Federal Services, Inc. | 14.7% | 48.7% | $6.5B |
| 4 | Department Of Energy | National Technology & Engineer | 13.9% | 48.1% | $40.9B |
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