U.S. DoD 2012 Budget

Frost & Sullivan, June 2011, Pages: 49

DoD Spend in 2012 to Remain Stable with Decreases in RDT&E Programs and Increases in Ground Forces Supplies, Services, and Technologies

C4ISR/EW/IO Applications to Witness Demand Upsurge

Total U.S. DoD funding through 2016 will decrease, but there will be modest increases to the base budget. The ongoing wars and nation building activities, in Iraq, Afghanistan, and Libya, and other commitments around the world consume the majority of operations and maintenance (O&M) funds. Both the major political parties are in favor of stable defense spending. The last several years of constant large-scale deployments have led to the deterioration of all types of equipment and exposed shortages in existing tables of equipment (TE). Procurement will remain stable as worn out equipment of all types needs to be replaced, repaired, and upgraded. The emphasis will be on incremental upgrades to mature and proven technology. “Mature commercial technologies have been adopted for use in many segments of the military,” notes the analyst of this research service. “Cost savings, faster fielding time, ease of upgrade, and increased capability have in many cases overcome concerns surrounding reliability, security, and integration.” Command, control, communications, computers, intelligence, surveillance and reconnaissance/electronic warfare/information operations (C4ISR/EW/IO) applications will grow through 2016. Other high priority segments are repair/maintenance, training, logistics, and healthcare.

Expect spending cuts for programs in research, development, test, & evaluation (RDT&E) that are based on immature technologies and do not have direct relevance to current ground forces operations. According the Bipartisan Debt Panel, RDT&E cuts will have the least political and operational impact. The Army and Marine Corps are both scheduled to reduce personnel as troops are phased out from Iraq and Afghanistan. Consequently, reprogramming and current equipment requirements will be negatively impacted. Cost and schedule overruns that have been a routine part of the acquisition system will come under increasing scrutiny. DoD acquisition reform efforts may delay the implementation of some large current projects.

Going forward, the dominant defense firms will remain, though with increasing foreign competition and acquisition of mid-tier technology and service firms. European-based companies will increasingly look to compete in the U.S. market, as their defense budgets shrink at a relatively fast rate. Global contractors will compete for partnerships and acquisitions of small innovative firms that can quickly translate commercial success into military applications and market share. Established prime contractors are always on the lookout for innovative technologies and services that can save them internal development and management costs and help them meet contract requirements on schedule and budget.

Technologies

The following technologies are covered in this research:

- Satellite communications

- Software defined radio

- Ruggedized computers

- Analysis & reporting software tools

- Radars, EO/IR

This Frost & Sullivan research service titled U.S. DoD 2012 Budget provides market drivers and restraints, success factors for operating in the defense market, and industry challenges. The relative attractiveness of various sectors is analyzed. The intent of this study is to indicate which segments of products and services are being prioritized by the Department of Defense (DoD) so that firms can invest in these areas of growth. In this research, Frost & Sullivan’s expert analysts thoroughly examine the following technologies: satellite communications, software defined radio, ruggedized computers, analysis and reporting software tools, radars, and electro-optical/infra-red (EO/IR).

1. Executive Summary

- 1.1 Key Findings

- 1.2 Market Engineering Measurements

- 1.3 CEO Perspective

2. 2012 Budget Overview

- 2.1 Overview

- 2.2 Scope

- 2.3 Industry Challenges

- 2.4 Market Drivers and Restraints

- 2.5 Requirements and Purchasing Trends

- 2.6 U.S. DoD Strategic Challenges

- 2.7 Seven Budget Priorities

- 2.8 Program Funding by Military Components and Segments

3. Industry Overview

- 3.1 Competitive Structure

- 3.2 DoD Competitive Overview

4. The Last Word

- 4.1 Legal Disclaimer

5. Appendix

List of Figures

- U.S. DoD 2012 Budget: Budget Forecast by Department (U.S.), 2010-2016
- U.S. DoD 2012 Budget: Budget Forecast by Title (U.S.), 2010-2016
- U.S. DoD 2012 Budget: RDT&E by Segment (U.S.), 2010-2012
- U.S. DoD 2012 Budget: RDT&E by Type (U.S.), 2010-2012
- U.S. DoD 2012 Budget: Programmed Procurement by Segment (U.S.), 2011
- U.S. DoD 2012 Budget: Programmed O&M by Activity (U.S.), 2011
- U.S. DoD 2012 Budget: Army Programmed Procurement by Segment (U.S.), 2010-2012
- U.S. DoD 2012 Budget: Navy/Marines Programmed Procurement by Segment (U.S.), 2010-2012
- U.S. DoD 2012 Budget: Air Force Programmed Procurement by Segment (U.S.), 2010-2012
- U.S. DoD 2012 Budget: Joint Programmed Procurement by Segment (U.S.), 2010-2012
- U.S. DoD 2012 Budget: Competitive Environment (U.S.), 2011-2016
- U.S. DoD 2012 Budget: Top 5 Products or Services Sold (U.S.), 2010
- U.S. DoD 2012 Budget: Top 10 Contractors (U.S.), 2010
- U.S. DoD 2012 Budget: Army Top 5 Products or Services Sold (U.S.), 2010
- U.S. DoD 2012 Budget: Army Top 10 Contractors (U.S.), 2010
- U.S. DoD 2012 Budget: Navy/Marines Top 5 Products or Services Sold (U.S.), 2010
- U.S. DoD 2012 Budget: Navy/Marines Top 10 Contractors (U.S.), 2010
- U.S. DoD 2012 Budget: Air Force Top 5 Products or Services Sold (U.S.), 2010
- U.S. DoD 2012 Budget: Air Force Top 10 Contractors (U.S.), 2010
- U.S. DoD 2012 Budget: Joint Top 5 Products or Services Sold (U.S.), 2010
- U.S. DoD 2012 Budget: Joint Top 10 Contractors (U.S.), 2011

LOC:

- U.S. DoD 2012 Budget: Official DoD Budget Topline (U.S.), 2001-2016
- U.S. DoD 2012 Budget: Official DoD Budget vs. GDP (U.S.), 2011
- U.S. DoD 2012 Budget: DoD Budget Forecasts (U.S.), 2010-2016
- U.S. DoD 2012 Budget: Total Budget by Title (U.S.), 2011
- U.S. DoD 2012 Budget: Total Budget by Department (U.S.), 2011
- U.S. DoD 2012 Budget: Total OCO Request by Title (U.S.), 2011
- U.S. DoD 2012 Budget: RDT&E Request by Department (U.S.), 2011
- U.S. DoD 2012 Budget: Procurement Request by Department (U.S.), 2011
- U.S. DoD 2012 Budget: O&M Request by Department (U.S.), 2011
- U.S. DoD 2012 Budget: Army Total Budget Request by Title (U.S.), 2011
- U.S. DoD 2012 Budget: Navy/Marines Total Budget request by Title (U.S.), 2011
- U.S. DoD 2012 Budget: Air Force Total Budget Request by Title (U.S.), 2011
- U.S. DoD 2012 Budget: Joint Total Budget Request by Title (U.S.), 2011

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