Industry · Federal contracting · Market structure
Where federal contracting outpaces DBE supply: industries with the widest gaps
Published May 25, 2026 · ~6 minute read
Our earlier NAICS representation analysis answered the question "which industries are over- represented in DBE certification compared to the broader small-business population?" (Answer: Utilities at 21.9x, Educational Services at 9.8x, Information at 6.5x.) That uses the US business population as the baseline.
This post answers a different question: how does the supply of DBE firms in each sector compare to federal demand? We pulled FY2024 federal contracting obligations from USAspending.gov, aggregated to NAICS 2-digit sector, and joined to the same DBE firm counts. The ratio of federal dollars to DBE firms is the metric. Sectors where federal dollars dwarf the DBE supply are the ones where the gap is widest.
Federal dollars per DBE firm, by NAICS sector
The chart below shows each NAICS sector ranked by federal contracting dollars (FY2024) per certified DBE firm. Longer bars = wider gap = more federal demand per existing supplier.
The widest-gap sectors
Finance & Insurance — $20.3M federal per DBE firm
Federal contracting in NAICS 52 totaled $47.4B in FY2024. Most of that flows through direct health and medical insurance carriers and a handful of financial-services intermediaries. Against just 2,333 certified DBE firmsin the sector, that's $20.3M of federal contracting per existing DBE firm — by far the widest gap of any sector.
The gap is real but the practical accessibility is limited. Federal health-insurance contracts are dominated by a small number of large national carriers; small DBE-eligible firms can't realistically enter that primary market. Where the gap might be exploitable is in financial advisory, brokerage, audit, and regulatory-compliance contracting — subsegments where a small certified firm can compete.
Manufacturing — $13.9M federal per DBE firm
Manufacturing took the largest share of FY2024 federal obligations: $261.5B, driven by defense industrial-base contracts (aircraft, missiles, shipbuilding, ammunition, vehicles). Against 18,828 DBE firms in NAICS 31-33, that works out to $13.9M of federal contracting per firm.
Again the gap is real but enormous prime contractors consume most of the volume. DBE participation in manufacturing typically happens at the subcontract level — specialized components, machining, fabrication, testing, services to the primes. The widest absolute opportunity sits in defense supply chain.
Professional, Scientific & Technical Services — $3.9M per firm
NAICS 54 was the second-largest federal sector at $244.2B(engineering services, R&D, computer systems design, management consulting, architecture). It also has the most DBE firms of any sector at 62,473. Even so, the per-firm federal opportunity works out to $3.9M — a bigger gap than construction, transportation, or health care. Engineering and IT services are the federal contracting workhorses, and the DBE supply pool, while large in absolute terms, hasn't scaled proportionally with the spending volume.
Construction — $1.4M per firm
The classic association of "DBE = construction" produces a per-firm federal contracting figure of $1.4M, mid-pack on the list. 37,150 DBE firms are certified in NAICS 23 against $52.4B in federal construction obligations. The DBE supply pool in construction is large enough that the per-firm federal demand is much thinner than in finance, manufacturing, or professional services. (See the methodology caveat — construction is also the sector where state-administered federal-aiddollars matter most, and those aren't in this denominator.)
Where DBE supply outpaces federal demand
At the other end of the chart, several sectors have substantial DBE certification activity against very little federal contracting volume:
- Arts, Entertainment & Recreation: 3,534 DBE firms against just $0.17B in federal contracting — $48K of federal contracting per DBE firm.
- Retail Trade: 6,425 DBE firms, $0.83B federal, $130K per firm.
- Real Estate: 7,178 firms, $1.62B federal, $226K per firm.
- Educational Services: 18,828 firms, $5.25B federal, $279K per firm.
These sectors are saturated relative to federal direct contracting — but several of them have major non-federal buyers (state and local procurement, public education, private contracts) where DBE certification is still valuable. The metric here strictly compares to federal obligations, not the full universe of contracts where DBE status matters.
Methodology
- DBE firm counts
- Same source as the NAICS representation analysis: 120,738 DBE Source companies with at least one valid 2-digit NAICS sector parsed from
certifications.naics_codes_raw. Companies with certs spanning multiple sectors are counted in each. - Federal obligations
- USAspending.gov spending_by_category/naics endpoint, time_period FY2024 (2023-10-01 to 2024-09-30). All awards, paginated to retrieve all 1,152 NAICS codes with non-zero obligations. Aggregated to NAICS 2-digit (with 31-33 Manufacturing, 44-45 Retail, 48-49 Transportation collapsed per SUSB conventions).
- The metric
- For each sector: ratio = (federal obligations in dollars) / (DBE firms in sector). Reported as "$M federal per DBE firm." Sectors with $0 federal obligations (Public Administration, Management of Companies) are excluded as undefined.
- Critical limitation: USAspending captures direct federal contracts only
- The federal DBE program is most active on state-administered federally-funded contracts — state DOT highway construction using FHWA apportioned funds, transit authority procurement using FTA funds, airport projects using FAA AIP funds. USAspending does not capture those contracts because they are issued by state DOTs and transit/airport authorities, not by the federal government directly. FY2024 FHWA federal-aid highway apportionment to states was $54.6B (per our state-level density analysis), but FHWA's direct contracting in USAspending was only $1.21B for construction (NAICS 23). The Construction sector in particular has a much wider true federal-aid universe than this metric reflects.
- Reproducibility
- The analysis script will be added to scripts/analysis alongside the previous NAICS analysis.
Frequently asked questions
Which industry has the most federal contracting per DBE firm?
Finance & Insurance, at $20.3M of FY2024 federal contracting obligations per certified DBE firm in the sector. The numbers: $47.4B in federal obligations divided across 2,333 DBE firms in the sector. The second-widest gap is Manufacturing at $13.9M per firm ($261.5B / 18,828 firms), and the third is Professional, Scientific & Technical Services at $3.9M per firm ($244.2B / 62,473 firms).
Does this mean a new DBE firm in finance would face less competition?
Not necessarily. The metric mixes two populations: DBE firms compete for allcontracts (federal, state, local, private), while the federal-obligations denominator captures only direct federal contracts. The 2,333 existing DBE firms in finance aren't all pursuing federal work — most are in commercial financial services. The metric measures the gap between federal demand volume and DBE certification supply, not the actual competitive intensity for any specific federal opportunity. Treat it as a structural indicator, not a direct guide to bid competition.
Why is Construction in the middle of the list when DBE is most associated with highway construction?
Because most federal-aid highway dollars are passed through to state DOTs, which issue construction contracts directly. Those state-issued contracts are not in USAspending — only FHWA's much smaller direct contracting is. The FHWA apportionment to states for FY2024 was $54.6 billion (per the Highway Statistics FA-4 table), but FHWA's direct construction contracting in USAspending was only $1.21B. So this analysis substantially understates the federal-aid highway construction market relevant to DBE participation.
What about state and local DBE contracts?
Not in this analysis. State DOTs administer their own DBE programs and issue billions in contracts annually, much of it federally-funded but contracted at the state level. Comprehensive state-level contracting data is fragmented across 50+ procurement systems and not aggregated in any single public dataset comparable to USAspending. The metric here covers federal direct contracting only — a real and meaningful market, but a fraction of the universe where DBE certification creates value.
What about FHWA, FTA, and FAA spending specifically?
When we filter USAspending to FHWA + FTA + FAA awards only, the total comes to just $7.3B for FY2024 — versus $54.6B in FHWA federal-aid apportionment to states. The 7x ratio reflects exactly the pass-through structure described above: most federal-aid transportation dollars are spent through state-issued contracts that USAspending doesn't track. We dropped a planned transportation-only sidebar from this analysis because the USAspending transportation numbers would understate the relevant market by an order of magnitude.
Caveats
The metric assumes federal contracting volume is a reasonable proxy for demand-side opportunity per DBE firm. That holds best for sectors where federal direct contracting is the primary channel (defense manufacturing, federal IT modernization, R&D, federal facilities management). It holds worst for sectors where the federal DBE program operates primarily through state-administered grants — construction and transportation in particular.
FY2024 represents a single fiscal year. Federal contracting volume by sector is stable in aggregate but can shift materially year-over-year in specific sectors (defense procurement cycles, infrastructure-package timing, IT modernization waves). Multi-year averaging would smooth this; we've gone with a single year for interpretability.
Companies are counted once per NAICS 2-digit sector they hold certifications in, so a firm with certs spanning multiple sectors is counted in each. Sector totals add up to more than the 120,738 distinct DBE firms.
Data snapshot: May 25, 2026. USAspending obligations: FY2024. Companion analyses: NAICS over/under-representation, DBE density by state, county-level density.