For many Tier 2 defense suppliers, one prime relationship accounts for almost all of their subcontract value
Published August 4, 2026 / FY2025 Tier 2 defense supplier concentration
For many Tier 2 defense suppliers, one prime relationship accounts for almost all of their subcontract value.
We looked at FY2025 US defense suppliers receiving $1M-$10M in observed contract value, where more than half of that value came through mapped subcontracts.
FY2025 observed defense contract value cohort
of observed value came through mapped subcontracts
typical mapped subcontract value through one prime
received more than half of observed value through one prime
One customer's share for a typical subcontractor
Typical subcontractor = cohort median
For the typical subcontractor in this group, 97% of mapped subcontract value came through one prime customer.
Even after adding the supplier's direct prime obligations, that same customer still represented 88% of its observed defense contract value.
This pattern is widespread
Across the cohort, 85% received more than half of their observed defense value through a single prime.
received more than half of their observed defense value through a single prime.
What the signal shows
For many Tier 2 suppliers, customer concentration sits with the prime - not simply with an individual contract or program.
That matters because the dependency can be hidden if the supplier is viewed only through individual awards, NSNs or programs.
What the signal says
The concentration sits with the prime.
For many Tier 2 suppliers, customer concentration sits with the prime - not simply with an individual contract or program.
The pattern remains after direct awards are added.
Even after adding the supplier's direct prime obligations, that same customer still represented 88% of observed defense contract value.
The pattern is widespread.
Across the cohort, 85% received more than half of their observed defense value through a single prime.
Observed defense value here combines positive direct prime obligations with included reported subcontract value at the CAGE level for this published cohort analysis. Prime obligations and subcontract values are separate procurement layers, so this constructed measure should not be read as independent federal spending or total company revenue.
CAGE refers to the Commercial and Government Entity code used to identify supplier entities and sites. Supplier and prime are identified by CAGE.
Sources: USAspending and public prime and subcontract procurement data; Mimir Data Platform and Modeling. Figures rounded.