House Panel to Ask Industry About Declining Pentagon Vendor Base

The House Armed Services Committee will meet on Wednesday to hear representatives of contractor trade associations talk about the state of the defense industrial base.

Analysis of Bloomberg Government data points to increased industry consolidation at a time when the Department of Defense is looking for more competition, diversity, and overall efficiency: The number of prime contractors working with DOD fell to 41,478 in fiscal 2022 even as Pentagon contract spending surged 17% to $437 billion.

That means defense contractors make up 45% of the government’s private sector vendor base while accounting for 62% of procurement dollars spent.

The total number of federal contractors dropped below 92,000 in fiscal 2022. One in five parent vendors disappeared or merged with other companies in the fiscal 2018 through fiscal 2022 period.

To contact the reporter on this story: Paul Murphy in Washington at pmurphy@bloombergindustry.com

To contact the editor responsible for this story: Amanda H. Allen at aallen@bloombergindustry.com