Study: Northern Virginia is National Leader in Federal Contracting

If Northern Virginia were a state of its own, it would rank second in the nation in the amount of federal procurement dollars received during the past five years. Only California got more business from the nation’s government.

That’s according to a new study released Friday by the Northern Virginia Regional Commission.

The report covers a five-year period from 2010 through 2014 and is based on analysis of more than 1.17 million federal procurement transactions.

Virginia overall ranks seventh in the country in terms of federal contracts. Three out of every four federal dollars spent in the commonwealth—a statewide total of $295 billion during the study period—went to Northern Virginia businesses. About 90 percent of federal procurement spending in Virginia occurs in 10 jurisdictions: Fairfax County, Arlington County, City of Newport News, City of Norfolk, Loudoun County, Prince William County, City of Alexandria, Virginia Beach and the cities of Portsmouth and Hampton.

Federal procurement spending in Virginia grew from $21.2 billion in 2000 to $43.9 billion in 2008. In six of eight years, it grew by double-digit percentage increases, peaking in 2011 at more than $60 billion.

After that high, federal procurement in the region fell to $51.1 billion in 2013, when sequestration kicked in. Those automatic spending curbs resulted in a 21 percent decrease in contracts. Almost 90 percent of the $9 billion reduction resulted from in defense spending cuts. Federal spending rebounded slightly in 2014, with a 2 percent increase.

On a state level, the Northern Virginia was hardest hit by sequestration, absorbing 76 percent of the cuts. Hampton Roads area businesses saw reductions of 11 percent.

NVRC Executive Director G. Mark Gibb said the study not only highlights the importance of federal spending to the commonwealth’s economy, but also Northern Virginia’s important role in providing the highly skilled workforce needed to perform the cutting-edge work required by the federal government. Cuts in federal spending affect local government budgets as well as area businesses, he noted.

To view the full report, go to A PowerPoint presentation is available at

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