The value of prime defense contracts in Arizona fell about 12 percent in fiscal 2010 to $10.9 billion, though Raytheon saw an increase, according to figures reported through the end of 2010 by the White House Office of Management and Budget.

The drop in statewide defense contracts comes after defense spending in the state was nearly flat in 2009, at about $12.4 billion, and as the Pentagon looks to slash spending in the next few years.

Raytheon was the state's biggest defense contractor with $5.2 billion in prime contracts in the fiscal year ended Sept. 30, up from $4.8 billion in fiscal 2009, according to data posted on the White House budget agency's USAspending.gov website.

Tucson-based Raytheon Missile Systems is Southern Arizona's largest employer, with more than 12,000 local workers at the start of 2010.

The state's second-biggest defense contractor for fiscal 2010 was TriWest Healthcare Alliance, a Phoenix-based company that administers the Tricare health-care program for military service members in the region. TriWest saw its contracts shrink to $1.2 billion from $2.7 billion in the prior fiscal year.

The third-ranked contractor, Boeing Co., had $787 million in Arizona contracts, down from $954 million in fiscal 2009. Boeing also rang up $73 million in contracts from the Department of Homeland Security for border-security technology and equipment.

Honeywell International had Arizona contracts totaling $616 million, compared with $703 million in 2009, while General Dynamics Corp. won contracts worth $408 million, down from $514 million in the prior fiscal year, according to federal procurement data.

The fiscal 2010 figures may be subject to adjustment to reflect delayed reporting of some contracts.