Defense Spending: Trends and Geographical Distribution of Prime Contract Awards and Compensation

During fiscal year 1997, the federal government spent about 1.4 trillion on various programs in the United States. These funds, in part, procured products and services, paid salaries and wages to federal employees, provide public assistance, and fund federal retirement programs and social security. DOD prime contracts and compensation discussed in this report accounted for about 204 billion, or about 14 percent, of the federal expenditures. Defense spending data are available to users in and outside the government and are regularly used in policy formulation and evaluation. DOD contractors have used federal government data in support of their work for DOD on the economic impacts of base realignment and closure actions. Federal expenditure data have also been used to provide information to communities, businesses, and individuals adjusting to the effects of defense downsizing and other changing economic conditions. Researchers at private companies, universities, and state government offices also use these data in a wide array of research projects and publications. Defense spending covered in this report includes DOD prime contract awards and DOD compensation. Compensation includes civilian pay, military active duty pay, reserve and national guard pay, and retired military pay. National totals for DOD contracts and compensation are considered to be accurate. However, when these numbers are broken down for individual states, the numbers are often viewed as less reliable.