Record $765B in Federal Contracts Awarded in 2023 – HigherGov Report

Key Takeaways:

• The federal government awarded a record $765B in contracts in fiscal year 2023, a 9.5% increase over 2022
• The Department of Defense accounted for 61% of awards with growth driven by the war in Ukraine and increases in obligations for the F-35 and other large procurement programs
• Technology contracts completed their 9th consecutive year of growth, reaching over $80B
• Space awards at NASA and Space Force expanded to $30B, with growth across multiple major programs
• Construction awards rebounded strongly to $54B, though Federal totals have fallen short of the potential of the IIJA

NEW YORK--(BUSINESS WIRE)--A new report by government market intelligence platform HigherGov shows that defense and civilian contractors were awarded a record level of contract awards in 2023. The 2023 Federal Contract Award Report, based on analysis of public and proprietary HigherGov data, found that federal prime contractors received a total of $765 billion in awards.

Other Major Trends:

• The defense supply base expanded in 2023 for the first time since reliable data started 20 years ago
• Competition levels reached a record high in 2023, with an average of 3.4 bidders per award
• Contract vehicles have become increasingly critical to the federal market with a record 56% of awards in 2023 being made through a vehicle
• COVID-19 response awards declined 82%, with large drops in vaccine production and medical equipment and supplies

“Strong growth in 2023 was primarily attributable to spending on the war in Ukraine, large defense procurement programs and broad-based award growth,” said Justin Siken, founder of HigherGov. “Contractors across virtually all sectors of federal contracting from defense, construction, technology, homeland security, space and more benefited from this growth.”

2024 Outlook:

HigherGov expects that award growth will moderate in 2024. 2023 award levels benefited significantly from procurement programs and war spending that may not be repeated in the future. Reduced growth in the FY2024 budget will also likely put pressure on contract growth, particularly at civilian agencies.

About HigherGov

HigherGov is the most comprehensive source of government contracting and grant market intelligence for contractors, grant recipients, and their advisors.