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Defense Spending: Trends and Geographical Distribution of Prime Contract Awards and Compensation
(Letter Report, 08/12/98, GAO/NSIAD-98-195).

Pursuant to a congressional request, GAO reviewed: (1) the overall
trends and geographical distribution of Department of Defense (DOD)
spending between 1988 and 1997; and (2) defense spending in conjunction
with each state's population and income tax contributions.

GAO noted that: (1) the award of DOD prime contracts in the United
States declined from $164 billion to $107 billion from 1988-1997; (2)
there were large declines in equipment and research prime contracts,
while service prime contracts have become a more significant portion of
total prime contracts; (3) meanwhile, DOD compensation decreased from
$111 billion to $97 billion; (4) four states--California, Virginia,
Texas, and Florida--accounted for $81 billion, or about 40 percent, of
DOD prime contract awards and DOD compensation in 1997; (5) over the
period 1988-1997, changes in the prime contract awards have occurred
throughout the 50 states, and California has experienced the largest
decrease; (6) states with the largest decreases had major reductions in
prime contracts for equipment; (7) in some states, gains in prime
contracts for services lessened the impact of significant decreases in
equipment prime contracts; (8) defense dollars are generally associated
with employment and other economic benefits to the states; therefore,
Congress and other decisionmakers are also often interested in measuring
defense spending against state population and income tax contributions;
(9) large variances occur within these measures; and (10) for example,
DOD prime contract awards and DOD compensation per dollar of personal
tax contributions in 1996 ranged from $.78 per dollar in Hawaii to $.04
per dollar in several states.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-195
     TITLE:  Defense Spending: Trends and Geographical Distribution of 
             Prime Contract Awards and Compensation
      DATE:  08/12/98
   SUBJECT:  Defense procurement
             Defense budgets
             Defense economic analysis
             Budget outlays
             Intergovernmental fiscal relations
             Budget obligations
             Equipment contracts
             Service contracts
IDENTIFIER:  California
             Florida
             Virginia
             Texas
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Appropriations,
House of Representatives

August 1998

DEFENSE SPENDING - TRENDS AND
GEOGRAPHICAL DISTRIBUTION OF PRIME
CONTRACT AWARDS AND COMPENSATION

GAO/NSIAD-98-195

Defense Spending

(707283)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  IRS - Internal Revenue Service

Letter
=============================================================== LETTER


B-278783

August 12, 1998

The Honorable David R.  Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives

Dear Mr.  Obey: 

The Department of Defense (DOD) spends over $200 billion annually for
contracts and compensation across the country.  These dollars,
entering each state's economy, are generally associated with
employment and other economic benefits.  As you requested, we
reviewed (1) the overall trends and geographical distribution of
defense spending between 1988 and 1997 and (2) defense spending in
conjunction with each state's population and income tax
contributions. 


   BACKGROUND
------------------------------------------------------------ Letter :1

During fiscal year 1997, the federal government spent about $1.4
trillion on various programs in the United States.  These funds, in
part, procured products and services, paid salaries and wages to
federal employees, provide public assistance, and fund federal
retirement programs and social security.  DOD prime contracts and
compensation discussed in this report accounted for about $204
billion, or about 14 percent, of the federal expenditures. 

Defense spending data are available to users in and outside the
government and are regularly used in policy formulation and
evaluation.  DOD contractors have used federal government data in
support of their work for DOD on the economic impacts of base
realignment and closure actions.  Federal expenditure data have also
been used to provide information to communities, businesses, and
individuals adjusting to the effects of defense downsizing and other
changing economic conditions.  Researchers at private companies,
universities, and state government offices also use these data in a
wide array of research projects and publications. 

Defense spending covered in this report includes DOD prime contract
awards and DOD compensation.  Compensation includes civilian pay,
military active duty pay, reserve and national guard pay, and retired
military pay.  National totals for DOD contracts and compensation are
considered to be accurate.  However, when these numbers are broken
down for individual states, the numbers are often viewed as less
reliable. 

We recently reported\1 that, due to certain key limitations, federal
government sources do not provide data for determining the full and
complete economic magnitude of federal expenditures in states.  Most
importantly, DOD's contract database does not include data on the
location of subcontracts, making it difficult to measure contract
activity within a state.  A substantial portion of prime contracts
could be subcontracted out-of-state.  In contrast, contractors within
the state could be awarded subcontracts by out-of-state prime
contractors, yet these subcontracts would not be recognized within
the state's total. 

However, existing data are not without value, nor should the
government necessarily strive for increased data collection that
could actually entail more costs than benefits.  Those who rely on
federal data need to be alert to their drawbacks and exercise
discretion when using them.  See appendix I for details of our scope
and methodolgy. 


--------------------
\1 Defense Spending and Employment:  Information Limitations Impede
Thorough Assessments (GAO/NSIAD-98-57, Jan.  14, 1998). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The award of DOD prime contracts in the United States declined from
$164 billion to $107 billion from 1988-97.  There were large declines
in equipment and research prime contracts, while service prime
contracts have become a more significant portion of total prime
contracts.  Meanwhile, DOD compensation decreased from $111 billion
to $97 billion.  Data were adjusted for inflation and shown in
constant 1997 dollars. 

Four states--California, Virginia, Texas, and Florida-- accounted for
$81 billion, or about 40 percent, of DOD prime contract awards and
DOD compensation in 1997.  Over the period 1988-97, changes in the
prime contract awards have occurred throughout the 50 states;
California has experienced the largest decrease.  States with the
largest decreases had major reductions in prime contracts for
equipment.  In some states, gains in prime contracts for services
lessened the impact of significant decreases in equipment prime
contracts. 

Defense dollars are generally associated with employment and other
economic benefits to the states; therefore, Congress and other
decisionmakers are also often interested in measuring defense
spending against state population and income tax contributions. 
Large variances occur within these measures.  For example, DOD prime
contract awards and DOD compensation per dollar of personal tax
contributions in 1996 ranged from $0.78 per dollar in Hawaii to $0.04
per dollar in several states. 


   DEFENSE PRIME CONTRACT AWARDS
   AND DOD COMPENSATION BETWEEN
   1988 AND 1997
------------------------------------------------------------ Letter :3

DOD prime contract awards and DOD compensation in the United States
have declined significantly\2 since 1988.  Despite some fluctuations
during the decade, DOD compensation decreased from $111 billion to
$97 billion.  Meanwhile, DOD prime contract awards decreased from
$164 billion to $107 billion.  (See fig.  1.)

   Figure 1:  DOD Prime Contract
   Awards and DOD Compensation in
   the United States (1988-97)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD data. 


--------------------
\2 The DOD prime contracts amounts shown in this report represent the
amounts that could be designated for specific states.  For example,
during 1997, prime contracts amounted to $128.4 billion, but only
$106.6 billion was allocable to specific states. 


      EQUIPMENT, SERVICE, AND
      RESEARCH PRIME CONTRACTS
---------------------------------------------------------- Letter :3.1

DOD has three broad categories for its contracts:  research,
development, test, and evaluation (research); other services and
construction; and supplies and equipment.  Figure 2 shows that both
equipment and research prime contracts experienced decreases, while
service prime contracts remained nearly constant.  Equipment prime
contracts dropped 53 percent, from $95 billion to $45 billion. 

   Figure 2:  Equipment, Service,
   and Research Prime Contracts
   (1988-97)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD data. 

One discernible trend not readily apparent in the preceding figure is
that service prime contracts have become a more significant portion
of DOD prime contracts over the decade.  Figure 3 shows the changes
in the percent-to-total for the three types of contracts between 1988
and 1997.  Equipment prime contracts decreased by 16 percentage
points, research prime contracts remained nearly constant, and
service prime contracts increased by 16 percentage points. 

   Figure 3:  Percentages for
   Equipment, Services, and
   Research Prime Contracts
   (1988-97)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD data. 


      GROWTH IN DOD PRIME CONTRACT
      AWARDS FOR SELECTED SERVICE
      INDUSTRIES
---------------------------------------------------------- Letter :3.2

In 1997, service prime contracts totaled about $42 billion, of which
36 percent was associated with the selected large service industries
described in figure 4.  Engineering and architectural services
represented the largest service industry by a wide margin. 

   Figure 4:  Growth in DOD Prime
   Contract Awards for Selected
   Service Industries (1988-97)

   (See figure in printed
   edition.)

(1) Engineering and Architecture
(2) Computers and Data Processing
(3) Management and Public Relations
(4) Residential Building Construction

Source:  Our analysis of DOD data. 


      GEOGRAPHICAL DISTRIBUTION OF
      DOD PRIME CONTRACT AWARDS
      AND DOD COMPENSATION
---------------------------------------------------------- Letter :3.3

Figure 5 shows that DOD prime contract awards amounts and DOD
compensation for 1997 were concentrated within a few states.  For
1997, DOD prime contract awards and DOD compensation in the United
States amounted to $204 billion.  Four states--California, Virginia,
Texas, and Florida-- accounted for $81 billion, or about 40 percent,
of the total.  For the other years between 1988 and 1997, DOD prime
contract awards and DOD compensation were similarly concentrated
within a few states.  For example, in 1988 the same four states
accounted for 39 percent of the total, and, again in 1992, they
accounted for 39 percent of the total. 

   Figure 5:  DOD Prime Contract
   Awards and DOD Compensation
   (1997)

   (See figure in printed
   edition.)

   Source:  Our analysis of DOD
   data.

   (See figure in printed
   edition.)


      STATES WITH LARGE INCREASE
      AND DECREASES IN DOD PRIME
      CONTRACT AWARDS
---------------------------------------------------------- Letter :3.4

The five states with the largest increases in DOD prime contract
awards and the five with the largest decreases\3 are shown in figure
6.  (See app.  II for state listing with additional data.) During
this period, nearly all states experienced reductions in equipment
prime contracts.  The states with the largest decreases in prime
contracts all had sizable reductions in equipment. 

   Figure 6:  States With the
   Largest Increases and Decreases
   in DOD Prime Contract Awards
   (1988-97)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD data. 

Equipment reductions in some states were offset to some degree by
increases in service prime contracts.  Figure 7 provides data on the
five states with the largest increases in service prime contracts. 
(See app.  III for state listing with additional data.)

   Figure 7:  States With Largest
   Increases in Service Prime
   Contract Awards (1988-97)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD data. 


--------------------
\3 The states with the largest increases and decreases were
determined by measuring the differences in 5-year averages for each
state (the average for 1993-97 less the average for 1988-92). 


      OTHER INDICATORS OF DEFENSE
      SPENDING
---------------------------------------------------------- Letter :3.5

DOD prime contracts, which account for the majority of defense
spending, may be awarded based on a number of factors such as
contract price, contractors' past performance, and company expertise
and technical superiority.  Thus, defense amounts awarded for prime
contracts in each state would not be expected to be proportional with
statistical indicators such as state population or state income tax
contributions.  Because defense dollars are generally associated with
employment and other economic benefits to the states, however,
Congress and other decisionmakers are often interested in measuring
defense spending against population and income tax data. 

Figure 8 shows, for each state, the per capita amount of DOD prime
contract awards and DOD compensation for 1997.  (See app.  IV for
state listing with additional data.) Per capita amounts ranged from
$5,137 in Washington, D.C., to $187 in Wisconsin, while the national
average was at $762. 

   Figure 8:  Per Capita Amounts
   for DOD Prime Contract Awards
   and DOD Compensation (1997)

   (See figure in printed
   edition.)

   Source:  Our analysis of DOD
   and Department of Commerce
   data.

   (See figure in printed
   edition.)

The amounts of DOD prime contract awards and DOD compensation per
dollar of personal tax contributions for each state are shown in
figure 9.  (See app.  V for state listing with additional data.)
These amounts ranged from $0.78 per dollar in Hawaii to $0.04 per
dollar in several states, while the national average was at $0.16. 

   Figure 9:  DOD Prime Contract
   Awards and DOD Compensation Per
   Dollar of Personal Tax
   Contributions (1996)

   (See figure in printed
   edition.)

Note:  Internal Revenue Service data on tax contributions were not
available for 1997 at the conclusion of our review. 

   Source:  Our analysis of DOD
   and Internal Revenue Service
   data.

   (See figure in printed
   edition.)


   AGENCY COMMENTS
------------------------------------------------------------ Letter :4

We requested comments on a draft of this report from the Secretary of
Defense or his designee.  On June 30, 1998, the Office of the
Director of Defense Procurement indicated that DOD has no comments on
the report. 


---------------------------------------------------------- Letter :4.1

We are providing copies of this report to other interested
congressional committees and members.  Copies will also be made
available to others upon request. 

Please contact me at (202) 512-8412 if you or your staff have any
questions concerning this letter report.  Major contributors to this
report were Ralph Dawn, Kendall Graffam, and John Ting. 

Sincerely yours,

David E.  Cooper
Associate Director
Defense Acquisitions Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

In conducting our work, we analyzed data on Department of Defense
(DOD) prime contract awards and compensation during fiscal year 1997
as well as the trends between 1988 and 1997.  As requested, we
analyzed the data on a national basis as well as on a state-by-state
basis.  In this report, we provide data for the 50 states and the
District of Columbia on defense spending, population, per capita
defense spending, and tax contributions.  The data were adjusted for
inflation and shown in constant 1997 dollars to show real growth and
declines between 1988 and 1997.  Specific values for each of the
states are presented in appendixes II, III, IV, and V. 

DOD reports information on its prime contract awards and its
compensation, by state, in the Atlas/Data Abstract for the United
States and Selected Areas.  The prime contract amounts shown in this
report represent the amounts that could be designated for the
specific states.\1 The ultimate source of data on prime contract
awards comes from the computerization of information contained in the
DD Form 350 (Individual Contracting Action Report).  Because of
reliability concerns, data on DOD grants was excluded from our
analysis. 

Population data were obtained from the Bureau of Economic Analysis,
Department of Commerce.  Internal Revenue Service (IRS) data were
extracted from its yearly publication Internal Revenue Service Data
Book.  IRS personal tax contributions were used in our analysis and
derived by subtracting corporation income tax contributions from
total revenue collections for the states.  Our analysis was hampered
because data on IRS contributions were not available for 1997 at the
conclusion of our review.  We, therefore, used 1996 IRS data for our
analysis. 

In our analysis of DOD prime contract awards, we found that large
variations occurred on a year-to-year basis.  For a specific state,
large increases in contracts in one year were often followed by large
decreases in contracts for the next year or vice versa.  As a result,
the states with the largest increases and decreases were determined
by measuring the differences in 5-year averages for each state (the
average for 1993-97 less the average for 1988-92). 

We prepared some computer-generated reports from the DD Form 350
database to assist in our analysis.  In addition to the use of the
Federal Supply Class or Service Codes, we used the commercial
Standard Industrial Classification of Establishments to assess the
growth in specific service industries. 

In our 1997 report, we identified some key limitations on the use of
the DOD data because certain data are not reported.  Concerning the
accuracy of the numbers that are reported, DOD does perform some
reviews and edit checks of the data, but it does not perform full
scale reliability assessments to ensure that the data are reliable. 
We did not systematically verify the accuracy of DOD's data or
conduct a reliability assessment of the database. 

Our work was conducted between November 1997 and June 1998 in
accordance with generally accepted government auditing standards. 


--------------------
\1 For example, during 1997, DOD prime contract awards amounted to
$128.4 billion but only $106.6 billion was allocable to the states
because of work located outside the United States ($6.8 billion),
contracts with values under a $25,000 reporting threshold ($11.7
billion), and expenditures not assigned to a specific state ($3.3
billion). 


TRENDS IN DOD PRIME CONTRACT
AWARDS (1988-97)
========================================================== Appendix II

                         (Dollars in millions)

                                                             Increases
                                       1988-92     1993-97          or
                                        5-year      5-year  (decreases
State and District of Columbia         average     average           )
----------------------------------  ----------  ----------  ----------
Alabama                                 $2,152      $1,929      ($223)
Alaska                                     567         612          45
Arizona                                  3,239       2,488       (750)
Arkansas                                   497         288       (209)
California                              28,233      21,084     (7,149)
Colorado                                 3,448       2,402     (1,046)
Connecticut                              5,670       2,771     (2,899)
Delaware                                   181         119        (61)
D.C.                                     1,848       1,442       (406)
Florida                                  5,993       6,457         464
Georgia                                  2,635       4,094       1,459
Hawaii                                     710         832         122
Idaho                                       78         106          28
Illinois                                 1,744       1,313       (431)
Indiana                                  2,091       1,589       (503)
Iowa                                       577         400       (177)
Kansas                                   1,098         740       (357)
Kentucky                                   527         886         359
Louisiana                                1,749       1,587       (162)
Maine                                      970         941        (29)
Maryland                                 5,000       4,344       (656)
Massachusetts                            8,915       5,339     (3,576)
Michigan                                 1,636       1,377       (259)
Minnesota                                2,155       1,218       (937)
Mississippi                              2,275       1,741       (534)
Missouri                                 6,756       6,163       (593)
Montana                                     89          94           4
Nebraska                                   306         310           4
Nevada                                     268         265         (3)
New Hampshire                              533         464        (69)
New Jersey                               4,160       2,959     (1,200)
New Mexico                                 812         695       (116)
New York                                 8,098       3,881     (4,216)
N. Carolina                              1,599       1,309       (290)
N. Dakota                                  152         137        (15)
Ohio                                     5,423       3,021     (2,403)
Oklahoma                                   806         761        (45)
Oregon                                     370         167       (203)
Pennsylvania                             3,622       3,228       (395)
Rhode Island                               547         380       (168)
S. Carolina                                855         974         119
S. Dakota                                   87         104          17
Tennessee                                1,640       1,158       (482)
Texas                                   11,172       8,879     (2,293)
Utah                                     1,016         499       (517)
Vermont                                    121         135          13
Virginia                                 9,093      10,075         982
Washington                               2,917       2,284       (634)
West Virginia                              206         180        (26)
Wisconsin                                1,157         684       (474)
Wyoming                                     75          72         (2)
----------------------------------------------------------------------
Note:  Numbers are rounded. 

Source:  Our analysis of DOD data. 


TRENDS IN DOD SERVICE AND
EQUIPMENT PRIME CONTRACTS
(1988-97)
========================================================= Appendix III

                               (Dollars in million)

                  Services                               Equipment
    -------------------------------------  -------------------------------------
St
at
e
an
d
Di
st
ri
ct
of
Co
lu                                                                      Increase
mb      Average      Average     Increase      Average      Average           or
ia      1988-92      1993-97   (decrease)      1988-92      1993-97   (decrease)
--  -----------  -----------  -----------  -----------  -----------  -----------
Al         $819         $862          $43         $795         $459       ($336)
 a
 b
 a
 m
 a
Al          455          506           52          112          103          (9)
 a
 s
 k
 a
Ar          446          572          126        2,401        1,592        (809)
 i
 z
 o
 n
 a
Ar          196          149         (47)          296          121        (175)
 k
 a
 n
 s
 a
 s
Ca        6,335        6,736          401       14,170        9,899      (4,272)
 l
 i
 f
 o
 r
 n
 i
 a
Co          566          712          146          394          272        (122)
 l
 o
 r
 a
 d
 o
Co          807          483        (324)        4,631        1,952      (2,679)
 n
 n
 e
 c
 t
 i
 c
 u
 t
De           61           76           15          104           37         (68)
 l
 a
 w
 a
 r
 e
D.        1,239          882        (357)          528          431         (97)
 C.
Fl        1,835        2,207          372        3,077        2,645        (432)
 o
 r
 i
 d
 a
Ge          804          943          139        1,408        1,319         (89)
 o
 r
 g
 i
 a
Ha          589          735          146          104           78         (26)
 w
 a
 i
 i
Id           47           71           24           28           26          (3)
 a
 h
 o
Il          558          540         (18)        1,036          683        (352)
 l
 i
 n
 o
 i
 s
In          411          386         (25)        1,571        1,092        (480)
 d
 i
 a
 n
 a
Io          109          123           14          357          197        (161)
 wa
Ka          600          347        (253)          445          382         (63)
 n
 s
 a
 s
Ke          317          667          350          207          216            9
 n
 t
 u
 c
 k
 y
Lo          610          556         (55)        1,133        1,018        (116)
 u
 i
 s
 i
 a
 n
 a
Ma          136           93         (43)          827          841           13
 i
 n
 e
Ma        2,026        2,284          258        1,872        1,248        (623)
 r
 y
 l
 a
 n
 d
Ma        1,171        1,083         (87)        5,344        2,420      (2,924)
 s
 s
 a
 c
 h
 u
 s
 e
 t
 t
 s
Mi          270          232         (38)        1,029          971         (58)
 c
 h
 i
 g
 a
 n
Mi          224          184         (39)        1,548          775        (773)
 n
 n
 e
 s
 o
 t
 a
Mi          620          486        (134)        1,647        1,215        (433)
 s
 s
 i
 s
 s
 i
 p
 p
 i
Mi        1,192        1,012        (181)        4,975        4,094        (881)
 s
 s
 o
 u
 r
 i
Mo           50           52            2           39           40            2
 n
 t
 a
 n
 a
Ne          157          185           28          136          109         (26)
 b
 r
 a
 s
 k
 a
Ne          225          227            2           28           32            4
 v
 a
 d
 a
Ne          105           90         (15)          329          255         (75)
 w
 H
 a
 m
 p
 s
 h
 i
 r
 e
Ne        1,371        1,544          173        2,187        1,021      (1,167)
 w
 J
 e
 r
 s
 e
 y
Ne          431          377         (55)          157          117         (40)
 w
 M
 e
 x
 i
 c
 o
Ne        1,760        1,374        (385)        4,775        1,852      (2,923)
 w
 Y
 o
 r
 k
N.          650          786          136          694          441        (254)
 C
 a
 r
 o
 l
 i
 n
 a
N.           86          109           23           65           26         (39)
 D
 a
 k
 o
 t
 a
Oh          696          809          114        3,891        1,662      (2,229)
 io
Ok          507          546           39          259          202         (57)
 l
 a
 h
 o
 m
 a
Or          150           71         (79)          196           78        (118)
 e
 g
 o
 n
Pe          558        1,047          490        2,069        1,352        (716)
 n
 n
 s
 y
 l
 v
 a
 n
 i
 a
Rh          194          216           22          322          120        (202)
 o
 d
 e
 I
 s
 l
 a
 n
 d
S.          528          792          264          283          149        (134)
 C
 a
 r
 o
 l
 i
 n
 a
S.           52           52            0           35           52           17
 D
 a
 k
 o
 t
 a
Te          835          576        (259)          608          324        (283)
 n
 n
 e
 s
 s
 e
 e
Te        2,540        2,738          198        7,316        4,612      (2,703)
 x
 a
 s
Ut          297          250         (48)          569          165        (405)
 ah
Ve            9            9          (1)           96          100            4
 r
 m
 o
 n
 t
Vi        4,783        6,039        1,256        3,397        2,656        (741)
 r
 g
 i
 n
 i
 a
W.          110          135           25           68           37         (31)
 V
 i
 r
 g
 i
 n
 i
 a
Wa          849          966          117        1,325          949        (376)
 s
 h
 i
 n
 g
 t
 o
 n
Wi          123          132            9          969          539        (430)
 s
 c
 o
 n
 s
 i
 n
Wy           26           42           16           48           30         (18)
 o
 m
 i
 n
 g
--------------------------------------------------------------------------------
Note:  Numbers are rounded. 

Source:  Our analysis of DOD data. 


PER CAPITA AMOUNTS FOR DOD PRIME
CONTRACT AWARDS AND DOD
COMPENSATION (1997)
========================================================== Appendix IV

                                                   DOD
                                                amount  Popula     Per
                                                     s    tion  capita
                                                (milli  (milli  amount
State and District of Columbia                    ons)    ons)       s
----------------------------------------------  ------  ------  ------
Alabama                                         $4,256     4.3    $986
Alaska                                           1,467     0.6   2,410
Arizona                                          3,895     4.6     855
Arkansas                                           956     2.5     379
California                                      30,873    32.3     957
Colorado                                         4,167     3.9   1,070
Connecticut                                      3,138     3.3     960
Delaware                                           405     0.7     554
D.C.                                             2,717     0.5   5,137
Florida                                         13,304    14.7     908
Georgia                                          8,040     7.5   1,074
Hawaii                                           3,183     1.2   2,681
Idaho                                              492     1.2     406
Illinois                                         3,321    11.9     279
Indiana                                          2,587     5.9     441
Iowa                                               688     2.9     241
Kansas                                           1,624     2.6     626
Kentucky                                         2,634     3.9     674
Louisiana                                        3,042     4.4     699
Maine                                            1,490     1.2   1,200
Maryland                                         7,235     5.1   1,420
Massachusetts                                    5,776     6.1     944
Michigan                                         1,906     9.8     195
Minnesota                                        1,498     4.7     320
Mississippi                                      2,708     2.7     992
Missouri                                         6,173     5.4   1,143
Montana                                            337     0.9     383
Nebraska                                           952     1.7     575
Nevada                                             984     1.7     587
New Hampshire                                      660     1.2     562
New Jersey                                       4,605     8.1     572
New Mexico                                       1,640     1.7     948
New York                                         4,853    18.1     268
N. Carolina                                      5,172     7.4     697
N. Dakota                                          497     0.6     776
Ohio                                             4,932    11.2     441
Oklahoma                                         2,836     3.3     855
Oregon                                             685     3.2     211
Pennsylvania                                     5,252    12.0     437
Rhode Island                                       756     1.0     766
S. Carolina                                      3,046     3.8     810
S. Dakota                                          319     0.7     433
Tennessee                                        2,136     5.4     398
Texas                                           15,481    19.4     796
Utah                                             1,335     2.1     648
Vermont                                            185     0.6     314
Virginia                                        21,732     6.7   3,227
Washington                                       6,230     5.6   1,111
West Virginia                                      425     1.8     234
Wisconsin                                          969     5.2     187
Wyoming                                            263     0.5     547
United States                                   203,85   267.6     762
                                                     7
----------------------------------------------------------------------
Note:  Numbers are rounded. 

Source:  Our analysis of DOD and Department of Commerce data. 


DOD PRIME CONTRACT AWARDS AND DOD
COMPENSATION PER DOLLAR OF
PERSONAL TAX CONTRIBUTIONS (1996)
=========================================================== Appendix V

                                         DOD     Personal          DOD
                                      amount          tax     amounts/
                                           s  contributio          tax
                                      (milli           ns  contributio
State and District of Columbia          ons)   (millions)           ns
------------------------------------  ------  -----------  -----------
Alabama                               $4,021      $13,367        $0.30
Alaska                                 1,444        2,438         0.59
Arizona                                4,775       14,294         0.33
Arkansas                                 980       10,014         0.10
California                            30,561      145,113         0.21
Colorado                               4,202       21,075         0.20
Connecticut                            3,251       24,903         0.13
Delaware                                 433        5,182         0.08
D.C.                                   2,719
Florida                               12,532       60,135         0.21
Georgia                                8,298       35,204         0.24
Hawaii                                 3,259        4,169         0.78
Idaho                                    479        4,418         0.11
Illinois                               3,244       74,815         0.04
Indiana                                2,574       23,242         0.11
Iowa                                     615       10,014         0.06
Kansas                                 1,842       12,054         0.15
Kentucky                               2,597       12,806         0.20
Louisiana                              2,411       13,632         0.18
Maine                                  1,322        3,700         0.36
Maryland                               7,402
Massachusetts                          5,518       37,298         0.15
Michigan                               2,005       53,587         0.04
Minnesota                              1,354       35,331         0.04
Mississippi                            3,213        6,737         0.48
Missouri                               8,723       27,189         0.32
Montana                                  388        2,248         0.17
Nebraska                               1,033        8,524         0.12
Nevada                                 1,062        7,286         0.15
New Hampshire                            808        4,918         0.16
New Jersey                             3,983       56,951         0.07
New Mexico                             1,844        4,592         0.40
New York                               5,189      117,309         0.04
N. Carolina                            5,681       26,818         0.21
N. Dakota                                545        1,995         0.27
Ohio                                   5,069       56,985         0.09
Oklahoma                               2,943       14,762         0.20
Oregon                                   684       13,216         0.05
Pennsylvania                           5,906       60,359         0.10
Rhode Island                             771        4,403         0.18
S. Carolina                            3,275       12,447         0.26
S. Dakota                                368        2,319         0.16
Tennessee                              2,209       23,877         0.09
Texas                                 17,202       88,174         0.20
Utah                                   1,310        7,263         0.18
Vermont                                  315        1,981         0.16
Virginia                              20,919       28,197         0.74
Washington                             6,195       26,328         0.24
West Virginia                            441        4,216         0.10
Wisconsin                                964       23,259         0.04
Wyoming                                  324        1,771         0.18
Combined-Maryland & D.C.                           39,372         0.26
United States                         209,20    1,290,288         0.16
                                           2

----------------------------------------------------------------------
Note:  Numbers are rounded. 

Source:  Our analysis of DOD and IRS data. 


*** End of document. ***