Monday, May 12, 2008

Forbes Beltway Index: Methodology

Washington, D.C. - The Forbes Beltway Index tracks the market progress of the publicly held companies that figure among the 1,000 largest contractors working for the U.S. federal government.

Each Monday, we update price data for the index, in which we give equal weight to each of the component stocks, which number 202. With an equal-weighted index, all components have the same contribution to the index value. This contrasts with big indexes such as the Standard & Poor's 500, which are weighted toward companies with the largest market capitalizations.

We get our information on government contractors from Eagle Eye Publishers, a 10-person research company in Fairfax, Va. Eagle Eye caters to both commercial and government clients. Among its public sector customers is the Congress.

The U.S. government does around $430 billion in business with contractors each year. Eagle Eye's specialty is analysis of prime contracts, or those that the federal government awards directly to a company.

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