The 10 Companies That Run the Government

The federal government awards roughly $778 billion in contracts every year. You might imagine that money is spread across thousands of companies competing fiercely for taxpayer dollars. You'd be wrong.

Just 10 companies receive $145 billion — 18.7% of all federal contracts. These aren't random winners of competitive bidding. They're the same names that have dominated government contracting for decades. Many of them are the only companies capable of doing what the government needs. And that's exactly the problem.

The List

See the full top 50 contractors list →

What Stands Out

Seven of the ten are defense contractors. That's not surprising — the Department of Defense is by far the largest buyer of goods and services in the federal government. But it means that the concentration problem is really a defense concentration problem.

The two healthcare companies — Optum and Humana — are notable exceptions. Optum's $22 billion makes it the second-largest federal contractor, larger than Boeing or Raytheon. Healthcare contracting is a quieter but equally massive industry, largely invisible to the public debate about government spending.

“Lockheed Martin receives more federal contract money than the entire budget of the Department of Education.”

Bigger Than Countries

To put $145 billion in perspective: that's larger than the GDP of over 130 countries. The combined federal contract revenue of these 10 companies exceeds the entire economic output of:

Lockheed Martin alone, at $34 billion in federal contracts, has government revenue exceeding the GDP of Iceland, Bahamas, and Bermuda combined.

The Revolving Door

Why do the same companies win decade after decade? Part of the answer is technical: building nuclear submarines and fighter jets requires specialized expertise that only a handful of firms possess. But that's only part of the story.

The revolving door between the Pentagon and defense contractors is well-documented. Senior military officers retire and join contractor boards. Contractor executives take senior positions at the Department of Defense. The relationships are deep, personal, and persistent.

These companies also spend heavily on lobbying — collectively over $100 million per year. That's a rounding error compared to the contracts they receive, making it one of the highest-return investments in the private sector.

“For every dollar these companies spend on lobbying, they receive roughly $1,400 in federal contracts. That's a 140,000% return.”

Why Competition Doesn't Work

In theory, government contracting is competitive. In practice, the defense industrial base has consolidated to the point where many programs have only one or two possible suppliers.

Consider the F-35 fighter jet. Lockheed Martin won the contract in 2001. Twenty-four years later, there is no alternative. Switching to a different aircraft would cost hundreds of billions and take a decade. Lockheed has a monopoly — not because they cheated, but because the economics of advanced weapons systems naturally create monopolies.

Nuclear submarines? Only Electric Boat (General Dynamics) and Huntington Ingalls can build them. Advanced missiles? Raytheon and Lockheed. Military satellites? A handful of companies. The barriers to entry aren't just financial — they're security clearances, specialized facilities, and decades of institutional knowledge.

Read more about no-bid contracts →

Can DOGE Break the Concentration?

The Department of Government Efficiency has targeted waste across federal agencies, and there are real savings to be found in bloated IT contracts, redundant consulting engagements, and unnecessary middlemen. Booz Allen's $8 billion in consulting contracts is a reasonable place to ask hard questions.

But the core concentration — Lockheed, Raytheon, Electric Boat — exists because the government needs what only they can build. You can't DOGE your way out of needing nuclear submarines. You can negotiate harder, demand better cost controls, and reduce scope creep. But the fundamental structure of defense procurement creates oligopolies by design.

The real opportunity for efficiency isn't in the top 10 — it's in the long tail of contracts where thousands of smaller firms compete (or don't compete) for hundreds of billions in IT, consulting, and services work.

Learn how federal contracting works →

The Same Names, Decade After Decade

Pull the top 10 contractor list from 2005, 2010, 2015, or 2020. You'll see the same names — sometimes in a different order, sometimes after a merger or acquisition, but fundamentally the same companies.

Lockheed Martin merged with Martin Marietta in 1995. Raytheon merged with United Technologies in 2020 to form RTX. General Dynamics acquired CSRA. The names change but the concentration doesn't — it actually increases with each merger.

In the 1990s, then-Defense Secretary Les Aspin encouraged defense industry consolidation — the so-called “Last Supper” — to reduce overcapacity after the Cold War. Three decades later, we have fewer competitors, less price pressure, and programs that routinely exceed their budgets by 50-100%.

“We engineered this concentration. The government encouraged defense mergers in the 1990s. Now we complain about the lack of competition we created.”