Federal Procurement Spending in Virginia and Northern Virginia

Staff Presentation

Northern Virginia Regional Commission

November 12, 2015

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Why NVRC Study is Important?

• Federal spending accounts for 20% of state’s economy

• In 2010, it amounted to $45,000 for every household and $16,000 per person

• Economic dependency makes state more vulnerable to federal spending reductions

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Divided into Two Sections

Section I - Background Information on Federal Procurement Spending In U.S., Virginia and Northern Virginia

Section II - Analysis of Economic Impacts and Alternative Scenarios for the Future

NVRC Study Organization and Objectives

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“Although it is generally known that Virginia receives more federal dollars than most states, less is known about the types of federal spending, the geographical distribution, and how federal spending has changed over time.”

Excerpt from JLARC Report.

Gaps in Current Knowledge

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How Much Money is Being Spent in Virginia?

Federal Procurement Spending in Virginia

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Billions 203

68.7%

MILITARY Procurement

NON-DEFENSE Procurement

92.4

31.3%

295.0TOTAL

Recent Five Year Period from FY 2010-2014

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- Dollar amount spent by DoD in state in 2013

- Percentage of total U.S. defense spending

- DoD spending per resident

- DoD spending as a share of state’s gross domestic product

- Number of defense personnel (military and civilian) in the state

- Payroll for defense personnel

- Dollar value of DoD contract awards obligated

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1

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1

2

1

1

DoD Presence in Virginia

USA Rank

OEA Study

How Commonwealth Ranks Nationally

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Where is the Money Being Spent?

Federal Procurement - Total

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Billions 53 23219

74% 18% 8%

Northern Virginia

Hampton Roads

Rest of Virginia

Military Procurement

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Billions 48 15140

69% 24% 7%

Northern Virginia

Hampton Roads

Rest of Virginia

Non-Defense Procurement

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Billions 5 879

86% 6% 9%

Northern Virginia

Hampton Roads

Rest of Virginia

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1. California 2. NORTHERN VA 3. Texas 4. Maryland 5. District of Columbia 6. Pennsylvania 7. REST OF VIRGINIA 8. Florida 9. Massachusetts 10. Arizona

UNITED STATES VIRGINIA

254.9 189.4 183.9 133.2 95.5 89.5 87.9 76.8 74.6 64.5

2,222.7

277.4

Northern Virginia Were a State

Amount of Procurement

(billions)

IF

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Fairfax County Arlington County Newport News City Norfolk City Loudoun County Prince William County Alexandria City Virginia Beach City Portsmouth City Hampton City

Total

131.2 44.7 16.3 14.5 13.3 12.0 11.6 10.1 4.6 3.4

261.6

Amount of Procurement

(billions)

44.5 15.1 5.5 4.9 4.5 4.1 3.9 3.4 1.5 1.2

88.6

Percent of Virginia

Where Money Goes Locally

“Procurement spending is a critical component of Virginia’s current defense-related infrastructure and any strategy to improve the Commonwealth’s competitive posture must take this reality into account.” .

Excerpt from NVRC Report

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Underlying Premise of NVRC Study