FY2026 Federal Contracts: $5.5B Obligated Where Work Happens Out-of-State
Federal contract dollars rarely stay in the state where they are awarded. When a federal agency signs a contract, the company receiving the funds often maintains its corporate headquarters in one location while executing the actual project in another.
This geographic separation highlights the complex logistics of federal procurement. Tracking the current-fy contract place of performance reveals exactly where federal dollars hit the ground.
Bottom line: In FY2026, federal agencies obligated over $5.5B across just 11 major contracts where the recipient's home state differs from the project site. The Department of Homeland Security and Department of Veterans Affairs are the primary drivers of these out-of-state obligations.
Understanding Out-of-State Federal Contract Obligations in FY2026
Every federal contract record on USAspending.gov tracks two distinct geographic data points. The recipient state indicates where the contractor is legally registered or headquartered. The place of performance state indicates where the actual labor, construction, or service delivery occurs.
When these two states do not match, the federal funding effectively travels. This happens frequently in large-scale construction, aerospace testing, and specialized IT services.
A heavy civil contractor based in the Mountain West might deploy crews to the southern border. A healthcare analytics firm in the Midwest might process data near federal agency headquarters in the Capital Region.
These out-of-state obligations define the fy2026 federal contracts out-of-state landscape. The data shows that specialized capabilities often override geographic proximity when agencies select vendors.
Largest FY2026 Contracts with Different HQ and Work Locations
The largest out-of-state obligations for FY2026 are heavily concentrated in defense, border security, and veteran healthcare services. The table below outlines the top high-value contracts where the corporate address and the project site cross state lines.
| Recipient | HQ State | Work State | Awarding Agency | FY2026 Obligation |
|---|---|---|---|---|
| BARNARD CONSTRUCTION COMPANY, INCORPORATED | MT | TX | Department of Homeland Security | $960.4M |
| TRIWEST HEALTHCARE ALLIANCE CORP | AZ | VA | Department of Veterans Affairs | $928.9M |
| OPTUM PUBLIC SECTOR SOLUTIONS, INC. | WI | VA | Department of Veterans Affairs | $894.5M |
| OPTUM PUBLIC SECTOR SOLUTIONS, INC. | WI | VA | Department of Veterans Affairs | $782.1M |
| OPTUM PUBLIC SECTOR SOLUTIONS, INC. | WI | VA | Department of Veterans Affairs | $723.7M |
| BARNARD SPENCER JOINT VENTURE | MT | TX | Department of Homeland Security | $614.9M |
| BCCG A JOINT VENTURE | AL | AZ | Department of Homeland Security | $613.3M |
| CSI AVIATION, INC | TX | AZ | Department of Homeland Security | $562.0M |
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION | VA | AL | General Services Administration | $389.2M |
| BARNARD SPENCER JOINT VENTURE | MT | CA | Department of Homeland Security | $219.4M |
| THE BOEING COMPANY | TX | FL | National Aeronautics and Space Administration | $178.1M |
Source: USAspending.gov FY2026 award data.
Key Agencies Driving Out-of-State Obligations in FY2026
Two federal departments account for the vast majority of these geographically split contracts. DHS contracts FY2026 and VA contracts FY2026 dominate the top tier of out-of-state spending.
These agencies rely on highly specialized national contractors. Instead of sourcing local vendors for massive regional projects, they award master contracts to established corporations capable of deploying resources anywhere in the country.
Department of Homeland Security Infrastructure Projects
DHS is executing massive physical infrastructure and logistical operations in FY2026. The agency frequently hires firms from outside the immediate project zone to handle border and aviation requirements.
- Barnard Construction Company: Based in Montana, this firm received a $960.4M obligation for work in Texas. The contract is designated as a DPAS Rated DO-N4 order, indicating high national priority.
- Barnard Spencer Joint Venture: Also operating out of Montana, this joint venture holds two major FY2026 out-of-state obligations. They received $614.9M for shelter and vertical barrier changes in Texas, and another $219.4M for design and construction attributes in California.
- BCCG A Joint Venture: Headquartered in Alabama, this group secured $613.3M for tiered pricing projects executed in Arizona.
- CSI Aviation, Inc: Operating out of Texas, this aviation contractor received $562.0M for immigration flight services. The work, which supports Enforcement and Removal Operations (ICE Air), is officially performed in Arizona.
Department of Veterans Affairs Healthcare Administration
The VA utilizes a completely different model for its out-of-state obligations. Rather than physical construction, VA contracts FY2026 focus heavily on regional healthcare administration and reporting.
The VA frequently contracts with massive healthcare networks based in the Midwest or West. However, the official place of performance is often Virginia, reflecting the location of VA data centers or administrative headquarters.
- TriWest Healthcare Alliance Corp: Based in Arizona, TriWest secured a $928.9M obligation for "Express Report" services. The official place of performance is Virginia.
- Optum Public Sector Solutions, Inc.: Headquartered in Wisconsin, Optum dominates the VA's out-of-state administrative spending. The firm holds three separate massive FY2026 obligations for quarterly express reporting.
- These Optum obligations total $894.5M, $782.1M, and $723.7M respectively. All three contracts list Virginia as the place of performance.
Top Federal Agencies Obligating Funds in FY2026
To understand these specific out-of-state contracts, it helps to view the broader federal spending environment. The top fy2026 federal agencies manage vast discretionary budgets that fund millions of individual awards.
The table below highlights the total FY2026 obligations for several major federal agencies across all contract types and locations.
| Agency Name | Total FY2026 Obligated | Award Count |
|---|---|---|
| Department of Agriculture | $99.05B | 636,916 |
| Railroad Retirement Board | $7.35B | 57,876 |
| Department of the Treasury | $5.85B | 8,158 |
| Federal Communications Commission | $2.83B | 28,482 |
| U.S. International Development Finance Corporation | $226.5M | 65 |
| Office of Personnel Management | $40.0M | 15 |
| Peace Corps | $22.1M | 27 |
| Executive Office of the President | $14.0M | 55 |
| Consumer Product Safety Commission | $2.7M | 45 |
| American Battle Monuments Commission | $861K | 1 |
| Merit Systems Protection Board | $621K | 52 |
| International Trade Commission | $521K | 8 |
| Selective Service System | $295K | 10 |
Source: USAspending.gov FY2026 aggregate agency data.
The Scale of the Department of Agriculture
The USDA leads this grouping with an overwhelming $99.05B in FY2026 obligations. This funding is distributed across more than 636,000 individual awards.
Unlike the highly concentrated, massive single-award contracts seen at DHS or the VA, the USDA's spending is heavily decentralized. It covers everything from crop insurance subsidies and rural development grants to forestry management contracts.
Financial and Telecommunications Regulators
The Treasury Department and the FCC also manage significant FY2026 obligations. The Treasury obligated $5.85B across over 8,100 awards, funding IRS modernization, debt servicing infrastructure, and financial enforcement operations.
The FCC obligated $2.83B across roughly 28,400 awards. Much of this funding flows toward broadband expansion initiatives, spectrum management, and rural connectivity programs.
Impact of Geographic Dispersion on FY2026 Federal Spending
When federal dollars cross state lines, the economic impact shifts. The corporate headquarters captures the administrative overhead and executive profits. However, the place of performance state captures the direct labor wages, local material purchases, and immediate economic stimulus.
This dynamic is especially visible in aerospace and defense technology. Highly specialized engineering firms cluster in specific states, but federal testing grounds and launch sites are fixed geographically.
Boeing FY2026 Federal Contracts
The Boeing Company provides a clear example of this geographic split. Headquartered in Texas, Boeing holds a $178.1M FY2026 obligation from NASA.
The contract funds the Commercial Crew Program (CCP) and Commercial Crew Transportation Capability (CCtCap). It covers the design, development, testing, and certification of an integrated crew transportation system for the International Space Station.
While the corporate entity is in Texas, the place of performance is Florida. This reflects the necessity of executing physical launch operations and final vehicle integration at the Kennedy Space Center.
SAIC Battlefield Systems Development
Science Applications International Corporation (SAIC) demonstrates a similar pattern in the defense IT sector. Headquartered in Virginia, SAIC secured a $389.2M FY2026 obligation from the General Services Administration.
The contract covers "Battlefield Systems Sub Task 1" and includes administrative updates and closeout actions. The actual place of performance is Alabama.
This routing of Virginia corporate expertise to Alabama project sites is common in federal IT and defense contracting. It allows agencies to leverage the dense concentration of tech talent in the Capital Region while supporting military installations and research hubs in the South.
Quick Takeaways
- Geographic separation is common: Over $5.5B in top-tier FY2026 contracts feature a corporate headquarters in one state and a project site in another.
- DHS drives construction travel: Montana-based heavy civil firms like Barnard Construction hold over $1.7B in FY2026 obligations for physical infrastructure work in Texas and California.
- VA centralizes administrative work: Wisconsin-based Optum holds over $2.3B in FY2026 obligations for healthcare reporting, all officially performed in Virginia.
- Aerospace requires specific sites: Boeing FY2026 federal contracts move $178.1M from its Texas headquarters to Florida for NASA Commercial Crew Program execution.
- Overall spending scale: The Department of Agriculture leads total agency obligations in the current dataset with $99.05B distributed across 636,916 awards in FY2026.