Military Business

$8.9 billion spent in NC: The North Carolina Military Business Center reports the state topped $8.9 billion in FY2022 in federal prime contracts

By Faith Hatton, posted 7 months ago

The North Carolina Military Business Center, a business development and technology transition entity of the State of North Carolina headquartered in Fayetteville NC released the final total of federal and Department of Defense spending in the Fiscal Year 2022.

The NCMBC reports that businesses executed $8.93 billion in federal prime contracts in the state including $5.51 billion in Department of Defense prime contracts. 

This is an increase of $1.5 billion with $7.38 billion being reported overall for FY 2021.

According to the NCMBC, businesses in 95 counties performed work for the federal government as prime contractors, while businesses in 77 counties performed work for the Department of Defense as prime contractors.

Businesses in 16 counties performed over $75 million in federal prime contracts. The top three of those counties ranked are:

Durham: $2,702,177,347.62 

Cumberland: $1,493,534,188.64 

Onslow: $903,204,054.22

According to NCMBC Executive Director Scott Dorney, Cumberland County usually places second to Durham County when it comes to federal spending, a fact that he attributes to the strong market found in the Research Triangle Park such as the Environmental Protection Agency.

“Usually, the top County in our state, when you look at all federal agencies it’s almost always Durham. People are always surprised by that, but you know, RTP is sort of divided between Durham and Wake County, but a lot of RTP is in Durham County. So, we have some major federal contractors in Durham County, like GlaxoSmithKline (GSK), like Cisco and people like that. They're major contractors and they happen to be located in RTP,” shared Dorney.

He also stated that a large amount of federal spending was for pharmaceuticals in 2022, which helped Durham get a larger share of those dollars in part due to the National Institutes of Health (NIH) also being located in RTP, along with the Department of Health and Human Services, both of which are non-DOD agencies.

Dorney shared that GSK was number one in federal contracts, holding the bulk of those federal dollars after a considerable increase in federal prime contracts in FY 2022. 

“GlaxoSmithKline did $1.6 billion of that $8.9 billion, and that's very unusual, that really got my attention because in FY 2021, GlaxoSmithKline was number one, but it was only $300 million. So, they did get quite a bit of contracting in FY 2022, and that's what bumped Durham above Cumberland County,” said Dorney. 

Dorney shared that while Cumberland County usually ranks number one in Department of Defense spending thanks to Fort Bragg, this year it also placed second to Durham County for FY 2022.

The top three counties for DOD spending are: 

Durham: $1,688,839,370.79 

Cumberland: $1,126,453,036.00 

Onslow: $869,227,279.47

“It was very surprising because Durham actually led the state, not only in all federal, but also in DOD and that's the first time I recall seeing that,” said Dorney. “And really, most of that was pharmaceuticals. So, you think about it, it's not only the Department of Health and Human Services that buys pharmaceuticals, DOD buys a lot of pharmaceuticals medical supplies, medical devices, medical services, out there and actually surpassed Cumberland, which is normally number one for DOD but this year number it’s two, but still, [It’s] over $1 billion dollars.” 

Dorney said that even though Cumberland County came in second for FY 2022, there are high hopes it will regain its number one spot in the future as contracts continue to be executed and end.

“Cumberland is consistently over a billion dollars and Durham is generally not, so what more than likely happened was that, and I'll mention GlaxoSmithKline, but there could be other companies in Durham County, who received, say, a three year contract. That is awarded in FY 2022. But it'll actually be executed over three years or four years. So, it's not unusual and it's why we often tell economic developers from these counties, ‘Don’t get too excited about just one year because when you look at FY 2022 your county might look great, but in FY 2023, or FY 2024, it might go down but that doesn’t mean it’s necessarily bad,’” said Dorney.

In the Greater Fayetteville Business Journal coverage area, the counties were ranked according to the amount spent for federal and DOD spending respectively:

Cumberland: 

Federal: $1,493,534,188.64 

DOD: $1,126,453,036.00 

Robeson: 

Federal: $38,121,017.56

DOD: $7,508,192.42

Hoke: 

Federal: $31,390,938.74 

DOD: $27,862,789.28 

Moore: 

Federal: $20,779,762.98 

DOD: $10,992,182.05

Bladen: 

Federal: $19,274,050.29 

DOD: $19,266,852.96 

Harnett: 

Federal: $13,524,112.71 

DOD: $2,961,816.2 

Sampson: 

Federal: $3,195.90 

DOD: $2,009.00 

Overall, Dorney credits the strong federal and DOD spending in the state to the specific industries such as textiles, aerospace and pharmaceuticals, that are currently thriving and source federal and DOD agencies outside of the state as well as in it.

“We have businesses in North Carolina that manufacture or sell products and services that not only DOD but other agencies need. We still have a thriving textile industry in North Carolina, we often think that the textile industry has gone away, but DOD is required by law to buy all uniforms, anything made out of textiles, must be made in America of American materials. So, North Carolina sells a lot of textiles-based products to DOD,” said Dorney. “We have great business capacity in the state. There’s a lot of demand from our bases and from DOD buying offices in other parts of the country. There’s a lot of great business capacity in the state that can do this work. Another thing is that 23 percent of all federal contracts go to small businesses. That’s the federal goal and they exceed it almost every year.” 

 

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