[Bloomberg Government has launched the tenth annual BGOV200, a ranking of the top federal contractors. See the list and download the report.]
Technology continued to be a massive contributor to federal market growth. It grew by $6.8 billion year over year, which is the single largest growth year on record. Information technology is consistently among the markets with reliable growth rates each year, growing to $76.2 billion in fiscal 2020 from $57.3 billion in fiscal 2016. The market was on a growth trajectory before Covid-19 due to continued investment in IT modernization. Technology was bolstered beyond forecast amounts as agencies adopted remote work measures in fiscal 2020.
In fiscal 2020 technology services – which cut through most of the spending categories listed below – drove most IT growth and expanded by $5.1 billion, to $53.5 billion, as agencies continued investing in areas such as artificial intelligence, cloud platforms, and digital services. Hardware purchases rose to $22.7 billion – an uptick of $1.5 billion – as agencies updated equipment.
General Dynamics ($3.8 billion), Leidos Holdings Inc. ($3.2 billion), and L3Harris ($2.6 billion) were the top companies in the IT sector on the 2021 BGOV200 list. These companies maintained their dominance by relying on major single-award contracts in combination with a broad portfolio of multiple-award contracts.
Small businesses accounted for $26.7 billion of the overall $76.2 billion in fiscal 2020 IT spending. The top small businesses on the BGOV200 list include FCN Inc. ($563 million), ThunderCat Technology LLC ($488 million), and V3Gate LLC ($475 million).
Among the six IT subcategories, IT outsourcing produced the highest increase in fiscal 2020 and is expected to continue in fiscal 2021.