How much does the federal government spend on contracts each year?

The U.S. federal government awards roughly $700-800 billion in contracts annually, covering everything from defense systems and IT services to office supplies and construction projects. The Department of Defense typically accounts for more than half of all federal contract spending. All awards above the micro-purchase threshold ($10,000) are reported through the Federal Procurement Data System and published on USAspending.gov.

What is the difference between a federal contract and a federal grant?

A contract is a procurement agreement where the government purchases goods or services from a vendor — there is a deliverable and performance requirements. A grant provides funding to an organization to carry out a public purpose (research, education, community development) without the government receiving a product in return. Contracts are governed by the Federal Acquisition Regulation (FAR), while grants follow the Uniform Guidance (2 CFR 200). PlainInfluence tracks contracts, not grants.

How can I find out which companies receive government contracts?

PlainInfluence aggregates USAspending.gov contract data and links it to the same organizations PAC contributions and lobbying spending. Search for any organization on PlainInfluence to see its full federal contract history alongside its political activity. You can also browse the organizations directory to find the largest government contractors.

What is a no-bid or sole-source contract?

A sole-source contract is awarded to a single vendor without competitive bidding. This happens when only one company can provide the required product or service, when there is an urgent need, or when the contract value falls below the simplified acquisition threshold ($250,000). While sole-source contracts are legal and sometimes necessary, they receive scrutiny because the lack of competition can lead to higher costs. The FAR requires agencies to justify sole-source awards in writing.

Are federal contracts public information?

Yes. The Federal Funding Accountability and Transparency Act (FFATA) of 2006 requires all federal spending — including contracts, grants, and loans — to be publicly available through USAspending.gov. Individual contract records include the awarding agency, vendor name, award amount, competition type, and place of performance. Some classified defense contracts have limited disclosure.

Federal Contracts Explained: How the Government Awards Billions

How Federal Procurement Works

When a federal agency needs a product or service — from fighter jets to janitorial services — it follows a structured procurement process governed by the Federal Acquisition Regulation (FAR). The FAR is a massive document (over 1,900 pages) that standardizes how the government buys things. The process generally follows these steps:

Requirements determination — the agency defines what it needs, including specifications and evaluation criteria.
Solicitation — the opportunity is posted on SAM.gov (formerly FedBizOpps) so vendors can submit proposals.
Evaluation and award — proposals are scored against criteria. Awards can be based on lowest price technically acceptable (LPTA) or best value tradeoff.
Performance and oversight — the vendor delivers, and the contracting officer monitors compliance.
Closeout — final invoicing, deliverable acceptance, and contract closure.

Types of Contracts

Federal contracts come in several flavors, each allocating risk differently between the government and the vendor:

Firm-fixed-price (FFP) — The vendor delivers for a set price. The most common type. Vendor bears cost overrun risk.
Cost-reimbursement — The government pays allowable costs plus a fee. Used when requirements are uncertain. Government bears more risk.
Time-and-materials (T&M) — Government pays hourly rates plus materials. Common for IT services and consulting.
Indefinite delivery / indefinite quantity (IDIQ) — Framework contracts with a range of quantities. Orders are placed as needs arise over a multi-year period.

Who Gets Federal Contracts?

Federal contract spending is heavily concentrated among a relatively small number of large contractors. The top 10 federal contractors typically account for over 25 percent of all contract dollars. Defense and aerospace companies dominate the list — Lockheed Martin, Raytheon Technologies, Boeing, Northrop Grumman, and General Dynamics have consistently ranked among the top recipients for decades.

Beyond the defense giants, significant contract spending flows to IT services firms (Leidos, SAIC, Booz Allen Hamilton), healthcare companies (McKesson, CVS Health through federal pharmacy contracts), and construction firms. The government also has programs specifically designed to channel contracts to small businesses, including set-asides for small disadvantaged businesses, women-owned businesses, HUBZone firms, and service-disabled veteran-owned businesses.

The Small Business Set-Aside

Federal law sets a goal of awarding 23 percent of prime contract dollars to small businesses. Agencies use set-asides — restricting competition to eligible small businesses — to meet these goals. In practice, the government has met or exceeded this goal in recent years, directing over $150 billion annually to small business contractors.

The Political Influence Connection

Federal contracting intersects with political influence in ways that PlainInfluence is designed to illuminate. Organizations that depend on government contracts often maintain active PACs that contribute to members of Congress who sit on relevant authorization and appropriations committees. They may also spend heavily on lobbying to influence the rules, specifications, and funding levels that determine contract opportunities.

This is not inherently corrupt — companies have a legitimate interest in advocating for their products and the policies that affect their industries. But the intersection of campaign contributions, lobbying spending, and contract awards creates accountability questions that public data can help answer.

On PlainInfluence, every organization profile links these three data streams. You can see whether a company that received hundreds of millions in defense contracts also maintained an active PAC contributing to Armed Services Committee members and spent millions lobbying the Department of Defense.

How Contract Data Gets Published

The Federal Funding Accountability and Transparency Act (FFATA) of 2006 and the DATA Act of 2014 require comprehensive reporting of federal spending. Contract data flows through this pipeline:

FPDS (Federal Procurement Data System) — Contracting officers enter award details into FPDS at the time of award. This is the primary source of record.
USAspending.gov — FPDS data is aggregated and published on USAspending.gov, the official public portal for federal spending data. Updated regularly.
PlainInfluence — We pull contract data from USAspending.gov and link it to the same organizations in FEC and Senate LDA databases through entity resolution.

Researching Contracts on PlainInfluence

To investigate an organization's federal contract activity on PlainInfluence:

Search for any organization by name or browse the organizations directory.
The organization profile shows contract totals alongside PAC contributions and lobbying spending.
Click through to see which agencies award contracts to the organization.
Compare organizations within the same issue area to see competitive patterns.
Check rankings to find the largest contract recipients across the fleet.