A recent study by BBVA Research highlights the concentration of defence contract allocations in Spain, revealing that the 15 largest corporations dominate the market, capturing 43% of total spending. This analysis, based on 26,000 agreements from the Council of Ministers since 2013, provides insight into the evolving landscape of public procurement in the defence sector.
Concentration of Defence Spending
The study from BBVA Research indicates a significant concentration of defence spending in Spain, with the 15 largest companies receiving 43% of the total budget allocated for defence contracts. This trend has implications for competition, as smaller firms may struggle to secure contracts in a market dominated by major players. The analysis covers 26,000 agreements made by the Council of Ministers since 2013, highlighting a shift in procurement practices that favour established corporations. The findings suggest that while large companies can deliver on extensive projects, the reliance on a few key players may limit opportunities for innovation and competition within the sector.
Impact of Recent Spending Trends
In December 2025, the Spanish government approved over 2,000 million euros in defence contracts, a record amount that will impact spending until 2035. The majority of these contracts were directed towards systems of weapons, helicopters, and aircraft, with Indra leading as the primary contractor. This surge in spending is part of a broader strategy to meet NATO’s requirement of 2% of GDP for defence expenditure. The BBVA study notes that in 2025, despite the absence of an official budget, the government managed to allocate an average of 4,750 million euros annually for new investment programmes, significantly higher than previous years. This trend indicates a commitment to enhancing military capabilities while also raising concerns about the sustainability of such spending.
Future of Defence Procurement in Spain
Looking ahead, the Spanish government is expected to present new General Budgets in September to replace the existing extension from 2023. The coalition partner Sumar has expressed concerns regarding the continuation of increased defence spending, which is projected to reach up to 5% of GDP in indirect investments. The new budgets will need to accommodate this growing expenditure while also fulfilling existing commitments for pensions and other essential services. The BBVA report suggests that the current trajectory of defence spending represents a structural change in the sector, with a shift from modernisation and maintenance towards a broader range of military investments, including cyber defence and logistics.
| Label | Value |
|---|---|
| Percentage of total defence spending by top 15 firms | 43% |
| Total defence contracts analysed | 26,000 |
| Record spending approved in December 2025 | 2,000 million euros |
| Average annual spending for new investment programmes (2025) | 4,750 million euros |
| Increase in defence spending from 2024 to 2025 | 46.5% |
| Projected increase in defence spending by 2026 | 2% of GDP |
“Maintaining this effort will require consolidating a path of sustained spending growth,” says BBVA Research.
WHY IT MATTERS
Understanding the concentration of defence contracts among major firms is crucial for stakeholders in public procurement, as it highlights the competitive landscape and potential barriers for smaller companies.
Reported from elpais.com, 2026-08-17. The Tender Wire is published by Otnox.
