Don't Mess with Texas - Federal Contract Spending Cuts and the Texas Economy

Today Chmura released the second in a series of white papers examining the reliance of states on federal contract spending. Download the full report.

Firms in Texas received $39.0 billion in federal contract awards in fiscal year (FY) 2013 in the United States[1]—more than all other states except Virginia ($51.2 billion) and California ($47.6 billion).[2] The Lone Star State boasts plentiful natural resources and an advanced industrial sector which are two of the reasons it is a large recipient of federal spending. Major metropolitan statistical areas such as Dallas, Houston, and San Antonio rely on this spending to support economic growth, particularly since the slow recovery from the Great Recession of 2007 to 2009.

Based on the latest data from the General Service Administration (GSA), $404.4 billion of federal contract spending went to firms in Texas from fiscal year FY 2003 through FY 2013. In FY 2013, the state received $39.0 billion, with over 80% of all federal contract awards coming from the Department of Defense (DoD).

Given the dependence of the Texas economy on federal government spending, it is important for federal, state, and local Texas representatives and citizens to understand the potential consequence for the economy during this period of defense downsizing. To learn more about the role federal procurement spending plays in the state of Texas as well as its impact by region and industry sector, download our full white paper here.

[1] Source: USASpending website, available at http://www.usaspending.gov/state-summary-tabular?tab=By+Location&contracts=Y&tabletype=statesummary.

[2] Federal government contracts are payments for goods and services rendered by the private sector. In this report, “federal contract spending,” “federal procurement spending,” and “federal contract awards” are interchangeable.