DOD's 2013 budget and the evolution of the defense industry

It’s been billed as a budget full of austerity measures, but there are a few parts of the Defense Department’s fiscal 2013 spending plan that are actually seeing a boost, including technology and cybersecurity.

As DOD prepares to implement the budget’s measures, industry needs to pay close attention to the department’s renewed focus on defending networks and data, according to officials and industry insiders.

“Cyber is now a ubiquitous requirement in all of our programs and not just in DOD. If you think about where our most treasured assets are, they’re not in the U.S. government. It’s our industrial base, which should be considered as part of the force structure,” said Brett Lambert, deputy assistant secretary of defense, manufacturing and industrial base policy. “So as a normal course of doing business and in operations, cyber is going to have to be in the forefront of our minds because the protection of that data is becoming increasingly essential by the hour, if not by the minute.”

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Lambert spoke as part of a panel at the Center for Strategic and International Studies on Feb. 15 in Washington.

The demand for cybersecurity may not be anything new to the defense industry, but with the president and DOD officials augmenting cyber funding alongside measures to cut spending nearly everywhere else, it brings new concerns to the table shared by the public and private sectors.

For one, industry must adjust for a shifting priority on cybersecurity and other IT services, and that includes a requisite shift in the workforce – and that’s not so easy to come by, according to David Berteau, director of the CSIS International Security Program.

“There’s an aspect of this that is easily masked and it’s hard to tell the impact of this budget. That is the character of the workforce itself, and particularly the ongoing problem we’re having in sustaining both the supply of – and demand for – eligible, competent science, technical, engineering and mathematics people,” Berteau said. “There’s a long-term demand and supply equation that we have in place here. Clearly this is way bigger than defense, but this is a critical question to the defense industry, because of both demographics and changing technology.”

Another challenge for industry will center on how cyber comes to be defined – and then meeting that new requirement with tailored services, the panel noted.

“There’s a floating definition of what really constitutes cyber,” said Byron Callan, director of Capital Alpha Partners, LLC. “There was a $3.5 billion item in the budget for Cyber Command, but it’s a bigger market than that. Clearly it’s going to be a trend. The hard part, from the outside, is trying to get our arms around what that market actually is. How big is it and how fast is it growing? It’s going to come down to how you define it.”

About the Author

Amber Corrin is a staff writer covering military networks for Defense Systems.

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