OCO is appropriated by congress and intended to directly support the war efforts. However, you can see that even the base budget increase out stripped general inflation (based on CPI) since 2001. While OCO decreased as troops withdrew from conflicts in Iraq and Afghanistan the current budget remained significantly higher than pre-ware levels. There are logical arguments for these expenditures such as; counter terrorism, cyber warfare and continued special operations missions. Each of these new and continuing missions require significant spending to perpetuate. But where does all this money go?

I have, for the past year, been working in the national capital region (NCR) and can say without a doubt it is the most interesting place I have ever lived. My current job requires that I balance between three groups of people with varied incentives; military, civilian and contractor. The later is the most curious of all. If I had to give a high level description of contractors from the military point of view, it would go something like this. Contractors are hired because they can easily be fired. However, they do the lions share of the work. In addition, the contractor population easily dwarfs the military and civilian groups combined.

So, what is a contractor? The term contractor (in the government sense) is a pseudonym for; person whose job exists because some organization won a government service contract. Then said organization hired that individual to fulfill the contractual obligations. With the defense industrial base providing both products and services for a government branch that has had plenty of money to spend large profits are inevitable.

This past 14 years has been incredibly lucrative for companies that won government contracts in the defense sector. More so than anyone could have imagined. When President Eisenhower warned of the military- industrial complex he was directly referring to the condition we currently find ourselves in. Our country has built a significant economic foundation, in particular regions, based on what the federal government spends on defense. Much of this spending can not easily be undone.

What most people may not know is how much of the defense spending has influenced the stock performance of some of Americas largest firms. In particular, people the NCR refer to the largest companies that pursue federal government defense contracts as “The Big 5.” All of these companies are publically traded and report directly to share holders. They are; Lockheed Martin, The Boeing Company, Northrop Grumman, Raytheon and General Dynamics.

How the current Big 5 came into existence is an interesting story. In the 90’s, a peaceful decade, the defense industry experienced an unprecedented consolidation of contracting companies. The following image shows some of the significant amount of acquisition progression during this time that resulted in the Big 5 (and others of note; UTC and Honeywell) as we know them today.