Virginia Leads States with $68.1B in FY2026 Federal Obligations
Federal agencies have obligated hundreds of billions in FY2026 contracts across the United States. The distribution of these funds heavily favors regions with dense contractor ecosystems and massive infrastructure projects.
Key takeaway: Virginia tops the nation with $68.1B in federal obligations for FY2026, driven by its proximity to the capital and defense sectors, while massive individual awards from the Department of Energy and Department of Homeland Security dominate the single-contract landscape.
Top States for FY2026 Federal Spending
The geographic distribution of states federal obligations FY2026 reveals a heavy concentration of capital in the Southeast and Midwest. The top 10 states combined account for hundreds of billions in guaranteed federal spending.
| State | Total FY2026 Obligations | Total Award Count |
|---|---|---|
| VA | $68.1B | 36,101 |
| IL | $64.3B | 44,995 |
| SC | $61.0B | 37,110 |
| NC | $60.7B | 39,764 |
| TN | $60.1B | 44,173 |
| AZ | $52.7B | 14,323 |
| AL | $28.3B | 32,069 |
| PR | $23.4B | 12,274 |
| OK | $22.3B | 52,520 |
| NM | $19.3B | 12,131 |
Virginia leads all states with $68.1B spread across 36,101 individual awards. Illinois follows closely with $64.3B, while South Carolina and North Carolina command $61.0B and $60.7B, respectively.
High dollar amounts do not always correlate with high award volumes. Kansas processed 56,609 awards—the highest count in the dataset—but generated a relatively modest $14.0B in total obligations. Conversely, Tennessee reached $60.1B on just 44,173 awards, lifted by several billion-dollar single contracts.
The Largest Government Contracts in 2026
Most federal contracts fall under the $1 million threshold, but the largest government contracts 2026 measure in the billions. These massive single-award obligations drastically alter state-level funding totals.
| Recipient | Awarding Agency | Amount | Industry |
|---|---|---|---|
| UCOR LLC | Department of Energy | $3.9B | 562910 |
| Fisher Sand & Gravel Co | Department of Homeland Security | $1.5B | 236220 |
| AMI Metals, Inc | Department of Homeland Security | $1.4B | 541614 |
| McKesson Corporation | Department of Veterans Affairs | $1.18B | 325412 |
| McKesson Corporation | Department of Veterans Affairs | $1.11B | 325412 |
| McKesson Corporation | Department of Veterans Affairs | $1.08B | 325412 |
| TriWest Healthcare Alliance Corp | Department of Veterans Affairs | $1.06B | 524114 |
UCOR LLC secured the highest single obligation in the dataset with a $3.9B modification for remediation services in Tennessee. The DHS issued the second-largest award, obligating $1.5B to Fisher Sand & Gravel Co for vertical border barrier construction in Arizona.
McKesson Corporation holds three of the top seven spots. The Department of Veterans Affairs issued these billion-dollar express reports to fund the Pharmaceutical Prime Vendor program for October, December, and January of FY2026.
Key Agencies Driving FY2026 Procurement
The Department of Veterans Affairs accounts for a massive share of top federal contracts by state 2026. Beyond its pharmaceutical purchases, the VA obligated $819.7M, $928.0M, and $1.06B to TriWest Healthcare Alliance Corp for direct health and medical insurance services in Arizona.
The DHS is another primary driver of FY2026 federal spending by state. Through U.S. Customs and Border Protection, the agency obligated $1.4B to AMI Metals, Inc for bulk steel and $874.1M to BCCG A Joint Venture for tiered pricing construction in Alabama.
Other DHS sub-agencies are executing massive specialized contracts. The U.S. Coast Guard obligated $520.5M to Rauma Marine Constructions OY for two Arctic Security Cutters, while U.S. Immigration and Customs Enforcement awarded $562.0M to CSI Aviation, Inc for immigration flight services in Texas.
Industries Shaping Federal Procurement by State in 2026
Federal procurement by state 2026 flows heavily into specialized commercial sectors. The data highlights several dominant NAICS codes capturing nine- and ten-figure obligations:
- Commercial Construction: 236220 — Commercial and Institutional Building Construction captured billions for border wall projects, including a $259.6M award to Spencer Construction LLC for waterborne barriers.
- Physician Services: 621111 — Offices of Physicians (Except Mental Health Specialists) generated massive awards for VA medical disability examinations, including $388.5M to Veterans Evaluation Services, Inc and $272.0M to QTC Medical Services Inc.
- Pharmaceutical Manufacturing: 325412 — Pharmaceutical Preparation Manufacturing is driven entirely by McKesson Corporation's multi-billion dollar VA delivery orders in Texas.
- Remediation: 562910 — Remediation Services secured its top spot via UCOR LLC's massive $3.9B Department of Energy contract.
Understanding Per-Capita and Regional Distribution
While Virginia and Illinois dominate the absolute totals, smaller states secure highly concentrated federal investments. New Mexico logged $19.3B across just 12,131 awards, reflecting the presence of major federal research installations and high-dollar individual contracts.
Vermont and Rhode Island represent smaller footprints, obligating $4.3B and $7.1B, respectively. U.S. territories also factor heavily into the FY2026 distribution, with Puerto Rico securing $23.4B and the Virgin Islands receiving $613.1M.
Even states with lower overall rankings host massive single-facility operations. Wisconsin captured a $260.1M VA contract awarded to OptumServe Health Services, Inc. for medical disability examinations.
Quick Takeaways for FY2026 Procurement
- Virginia leads the nation: The state secured $68.1B in federal obligations, outpacing all other regions by nearly $4 billion.
- Billion-dollar awards drive totals: Single contracts, like UCOR LLC's $3.9B remediation award, heavily skew state-level spending data in places like Tennessee.
- Healthcare and defense dominate: The VA and DHS issued the vast majority of the largest individual contracts in the FY2026 dataset.
- Volume does not equal value: States like Kansas process over 56,000 individual awards but generate a fraction of the total dollar volume seen in states with fewer, larger contracts.