Why are an increasing number of defense contractors deciding to make their home in Northern Virginia? Well, it’s not for the easy commute. Despite BRAC causing more traffic headaches, Virginia continues to top the triad when it comes to where companies decide to make their home – Maryland, D.C. or Northern Virginia.
The availability of government contracts and business has helped both Maryland and Virginia expand as popular hot-spots for a variety of companies, including major defense contractors. And while both the Baltimore, Maryland area and Northern Virginia hold a significant number of defense contracting companies, in recent years Northern Virginia has emerged as a top spot for military contractors.
It’s not just the close proximity to the Pentagon that makes Northern Virginia a lucrative area. Virginia was also ranked by CNBC as the best state to do business and Forbes ranks it second only to Utah as the best state to do business. The state has a high availability of office space compared to Washington D.C. and the suburbs of Maryland. Plus, it has a corporate tax bracket of only six percent.
In comparison, Maryland was the 14th best state to do business in the Forbes survey and 29th in the CNBC survey. Still, this hasn’t stopped companies like Northrop Grumman from locating thousands of jobs to Maryland, many of them to support U.S. Cyber Command outside of Fort Meade, Md., and the growing cybersecurity business. Yet Virginia is still being favored by numerous defense contractors as the new mecca for business.
Virginia’s emergence as a top locale for military contractors began when the U.S. presence peaked in Iraq. In 2006, professional services contractor DynCorp, the number-nine contractor with over $2 billion in military sales in 2010, moved to Falls Church, Virginia. Two years later, Computer Sciences Corporation moved into the same neighborhood. That same year BAE Systems moved to Arlington, Virginia.
Several months ago, Northrop Grumman became the fourth big military contract to move to the same Virginia office park where General Dynamics, DynCorp and Computer Sciences are located.
