At NextGen Federal Solutions, we’re always tracking where federal dollars are flowing & more importantly, where smart contractors should be focusing their attention. Based on FY2023 data, five states continue to dominate the landscape when it comes to federal contract awards: Virginia, California, Texas, Maryland, and Florida.

Over the past five fiscal years, these states have consistently led the pack. While California, Texas, and Virginia have traded places in the rankings, Virginia has emerged as the clear frontrunner in recent years. The Commonwealth has not only maintained its lead since FY2021, but it also shows a steady upward trend in total federal contract obligations—positioning it to likely retain the top spot through FY2024.

This continued dominance is largely driven by the state’s proximity to Washington, D.C., its dense concentration of defense and intelligence agencies, and a strong base of established contractors.

Below is a chart illustrating how federal spending has shifted among the top five states from FY2019 to FY2023. The data underscores the strategic importance of these states for businesses looking to grow their federal footprint..

What This Means for Contractors

If you’re aiming to expand your federal contracting reach, these states—especially Virginia—present high-opportunity markets. Whether you’re a seasoned government vendor or just breaking into the space, aligning your strategy with where the dollars are flowing can give your business a competitive edge.

At NextGen Federal Solutions, we help businesses navigate these opportunities and position themselves for success in top-performing states.