Report: Top Five Weapons Companies Set to Get $140 Billion From Pentagon Next Year

A Sludge analysis estimates that more than half of the fiscal year 2024 Pentagon budget will go to private contractors, with the five largest companies raking in one-sixth of all military spending.

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.

Like other weapons companies, the “Big Five” profited from the surge in US arms sales in 2022. Still, these firms generally rely on government contracts as much or more than they do on government-approved (and often government-brokered) sales to other countries. For example, the lifeblood of perennial top contractor Lockheed Martin remained U.S. public funds in 2022: Seven out of ten dollars in revenue the firm made last year was through federal contracts.

This bar chart shows how much the top five military contractors rely on government assistance. In fiscal year 2022, 72% of Lockheed Martin’s total company revenue came from government contracts and 24% came from government-approved arms sales. For Raytheon (RTX), it was 40% and 19% respectively; for Northrop Grumman, it was 41% and 47%; for Boeing, 25% and 21%; for General Dynamics, 63% and 14%.

Sparked by the pending budget bill, it’s likely that a record amount of public funds will flow to these companies next year. Even more money is up for the taking after military-related funding from other spending bills is accounted for, like the heavily-contracted nuclear weapons programs nominally in the Department of Energy budget. Both the Department of Homeland Security and Military Construction, Veterans Affairs, and Related Agencies appropriations bills contain funding for the Pentagon and its contractors too. All told, spending on the military is on track to reach $886 billion in fiscal year 2024, in line with the budget agreement negotiated by President Biden and House Speaker Kevin McCarthy (R-Calif.).

Any funding for Ukraine aid will be added on top of that. Since February 2022, More than 99% of the money for Ukraine’s military has come through supplemental funding bills and not the Pentagon’s regular (or “base”) budget. The White House has already proposed $13.3 billion in military aid to Ukraine for fiscal year 2024. Over the last two years, Congress has appropriated over $92 billion in Ukraine military aid, much of it directed to contractors.