DoD 2013 Budget

This Frost & Sullivan research service titled DoD 2013 Budget provides end-user overviews, industry challenges, types of services required, and a competitive overview of major market participants. In this research, Frost & Sullivan's expert analysts thoroughly examine the Department of Defense’s (DoD’s) 2013 budget.

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Market Overview

Replacements and Upgrades to Account for a Substantial Share of the 2013 DoD Budget

Force Structure Reduction to Lower the Required Number of Units across Military Segments

Continuing economic challenges will necessitate cuts in the defense budget till 2017. While there will be reductions in the number of personnel in every military segment, ground forces will experience the most structural changes. Fewer numbers of units denotes lower requirements for equipment, but this reduced demand for procurement is offset by the higher demand for the modernization of existing weapons. The DoD will have to focus on upgrades as many of the available aircraft, ships, tactical vehicles, command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) equipment, and weapons are at the end of their serviceable life. “Current spending is driven by the repair and replacement of worn out equipment and R&D for upgrades to systems; however, the emphasis will be on incremental upgrades to mature and proven technology,” says the analyst of this research. “The high-priority spending segments are repair/maintenance, training, logistics, and healthcare.”

An offshoot of the DoD’s budget restrictions is the increasing use of commercial off-the-shelf (COTS) technologies. Commercial technologies’ ease of integration, increased integrator margins and greater operational capabilities have popularized their use in combat vehicles, naval weapons systems, and tactical network communications networks. Meanwhile, the operational borders between DoD and other Federal agency assets and missions will continue to blur. The dominant defense firms will remain active but will be challenged by increasing foreign competition and their acquisition of mid-tier technology and service firms. Europe-based companies will look to gain an entry to the United States as their defense budgets shrink at a relatively faster rate. “Global contractors will compete for partnership and acquisition of small, innovative firms that can quickly translate commercial success into military applications and market share,” notes the analyst. “Established prime contractors are always seeking innovative technologies and services that can save them internal development and management costs and help meet contract requirements on schedule.”

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Satellite communications
• Software defined radio
• Ruggedized computers
• Analysis & reporting software tools
• Radars, EO/IR

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