WASHINGTON – Federal spending on defense contracts rose nearly 47 percent in Maryland in the two years after the 2001 terrorist attacks, amounting to $7.2 billion in fiscal 2003 alone, a new report shows.
The Consolidated Federal Funds Reports, slated to be released today by the Census Bureau, showed that spending on defense contracts in Maryland jumped 14 percent from fiscal 2002 to fiscal 2003, a slightly slower growth rate than the national rate of 17 percent.
But Maryland’s 47 percent jump over the two-year period was well above the 29 percent rise nationally, the report said. Experts attribute Maryland’s success in winning defense contracts to a post-9/11 spike in spending on intelligence as well as research and development.
“There has been a significant increase in maintenance and R&D (research and development) kinds of contracts between 2001 and now,” said Jacques Gansler, director of the Center for Public Policy and Private Enterprise at the University of Maryland.
“There are lots of small and large firms in Maryland that are benefiting from this type of defense spending and NSA-related (National Security Agency) work,” he said.
By contrast, he noted that Virginia is less focused on research and development. Even though it is home to some of the nation’s largest defense contractors, the commonwealth saw more modest gains of 11 percent in fiscal 2002 and 5 percent in fiscal 2003, which ended Sept. 30, 2003.
“The largest recipient . . . in Virginia is ship building,” said Gansler. “That’s been much less of focus post-9/11.”
Gansler, a former Defense undersecretary for acquisition, technology and logistics, said Maryland’s growth is being fueled by contractors such as Bethesda-based Lockheed Martin and BAE Systems, which has a strong presence in the state.
The Census report echoes the findings of a report released last week by the non-partisan Center for Public Integrity, which named Lockheed Martin the top recipient of Defense Department contracts over the past six years.
The center, citing data culled from Pentagon records, said Lockheed Martin took in just over $94 billion in defense contracts between fiscal 1998 and fiscal 2003. Of that total, nearly $22 billion was received in fiscal 2003.
The company best known for its F-16 jet fighter employs roughly 8,000, or 6 percent of its total workforce, at 70 locations in Maryland, according to Lockheed spokesman Tom Greer. He said the company’s growth areas included homeland security, government information technology and intelligence.
The Center for Public Integrity’s top-100 recipients of Pentagon contracts for the six-year period includes four other Maryland contractors: Johns Hopkins University was No. 54, Annapolis-based ARINC was 68th, the Bell Boeing Joint Project Office at Patuxent River was No. 93 and Hunt Valley-based United Industrial Corp. ranked 95th.
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