Capital Area Wins Bigger Share of Federal Procurement Dollars In federal contracting, as in real estate, location matters. Contractors in the Washington metropolitan area won 15% of all federal procurement dollars in fiscal 2003, up from 4% in 1980, according to a study by George Mason University’s Center for Regional Analysis and the analysts at Delta Associates. Federal agencies spent $42.2 billion with Washington-area contractors, about 17% more than the previous year. The analysts said the record growth was driven by increased spending on defense and homeland security. The figures reflect the government’s growing use of contractors to provide services. Two categories – IT/telecommunications services and professional, administrative and management services – accounted for the majority of procurement in the region. “It is likely that the share of the national federal procurement market captured by businesses located in the Washington region will continue to grow due to the type of services sought by the government and the unique capabilities of contractors found here,” the study concludes. The analysts estimate that federal procurement supports 294,000 contractor jobs, nearly as many as the 346,600 federal workers in the region. Federal spending indirectly supports another 600,000 jobs as a result of what economists call a multiplier effect, the report says. Federal procurement accounts for nearly 15% of the gross regional product. “This increase in federal procurement awards to local contractors also helps explain why the Washington region has had the lowest unemployment rate among all metropolitan areas in the nation month after month throughout the downturn in the nation’s business cycle and why job growth through the first half of 2004 has led the nation with recent gains running more than double the next closest metro area,” the report says. Other findings: *Contractors in the Northern Virginia suburbs won more than half the procurement dollars, more than those in the District of Columbia and Maryland combined. *More than 12,500 Washington-area companies were awarded federal contracts in 2003. *The 61 largest contractors received 46% of the region’s total dollars. SAIC is the leading contractor in the region, followed by Computer Sciences Corp., Booz Allen, Northrop Grumman and Lockheed Martin. *The Defense Department is the largest source of procurement dollars in the region, accounting for 44% of the total. Nationwide, defense procurement makes up about two-thirds of federal procurement.