Boeing’s $10B in contracts highlight defense industry’s $29B impact in Missouri
(The Center Square) – More than $14 billion in military defense contracts were awarded to Missouri companies during Fiscal Year 2019, according to data released this week by Gov. Mike Parson’s Office.
The nine-page analysis was conducted by Kit Bond Strategies and Development Strategies on behalf of the Office of the Missouri Military Advocate within the Missouri Department of Economic Development (DEO).
The study is the fourth assessment produced by Kit Bond and Development Strategies within the last decade for the DEO and follows up their January 2020 Study of the Economic Impacts of Military Spending and Operations in Missouri report.
That study documented that in FY18, $18.2 billion in military contracts secured by Missouri companies supported more than 83,000 direct jobs and an additional 100,000 indirect jobs with $29.2 billion in total direct and indirect economic output.
According to the study, the $11.8 billion in Department of Defense (DoD) contract awards to Missouri-based vendors represented 65% of total direct impacts in the state, based on average annual contract awards from FY16 to FY18.
“Given the significant impact of DoD contract awards to the state’s military infrastructure and economy as a whole, the following analysis represents a ‘deeper dive’ into these contract awards to understand spatial distribution within the state and provide more context to the industry sectors that are most impacted by this spending activity,” the March update states.
In FY2019, according to Kit Bond/Developmental Strategies, the DoD awarded $14.38 billion in contract awards to Missouri-based vendors, lower than FY18’s $15 billion, “but still significantly higher than the annual average awards from FY15 to FY19 of $11.5 billion, indicating sustained investment by the federal government in the state.”
“We are proud to have dedicated defense companies and employees statewide who work every day to protect our nation,” Parson said in a statement accompanying the report. “Military investment in Missouri not only strengthens our economy but the defense of the entire country.”
DEO Director Rob Dixon said in a statement that the findings confirm how critical defense spending is to Missouri – and how critical Missouri is to the nation’s defense.
“The importance of Missouri’s military installations to our economy is undeniable,” Dixon said. “Defense investment in our state impacts more than 25,000 businesses and supports the livelihoods of countless Missourians working in industries such as manufacturing and technology.”
According to the study, between FY16-18, the average annual DoD contracts with Missouri businesses totaled $11.86 billion. Between FY 17-19, it was $13 billion, a net increase of $1.1 billion in contract awards.
That has resulted “in an overall net increase of nearly $3 billion in total economic output, $530 million in labor income, $930 million in value added, and 9,100 jobs: with total direct and indirect employment related to defense near 185,000 in FY19 and FY20, the report states.
The report lists the top 20 Missouri military vendors but it would be better organized as Boeing Defense and everyone else.
Boeing Defense and its supply chain, which employ more than 16,000 workers at its St. Charles plant, received an average of 72% of the total DoD contract awards to Missouri-based vendors, including $10 billion of the $14.38 billion awarded in FY19.
Express Scripts, a pharmacy benefit management company, with $637.7 million in DoD contracts is second and World Wide Technology, Inc., with $454.9 million in work, is third.
The other top-10 Missouri FY19 DoD contractors: 4.) DRS Sustainment Systems, Inc. ($463.6 million); 5.) McCarthy HITT ($409 million); 6.) Alliant Techsystems Operations LLC ($319 million); 7.) The Korte Company ($290.5 million); 8.) J.E. Dunn Construction Co. ($284.1 million); 9.) Burns & Mc Donnell, Inc., ($100.1 million); and 10.) Spectrum Healthcare Resources Inc. ($54.2 million).
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