Despite sequestration, cybersecurity funding growing

July 14, 2013

Bucking the trend set by most other areas in the defense budget, cybersecurity is widely regarded as a growth area for the near future.

The Defense Department intends to spend $23 billion on cybersecurity over the next five years, according to news reports, and is seeking more than $4.6 billion for cybersecurity in fiscal 2014 alone — an 18 percent jump from 2013.

The requested yearly amount is even higher for fiscal 2015, at $4.7 billion, but decreases to $4.5 billion by 2018.

While the requests show the Pentagon wants to push more money into cybersecurity, the requests are actually far lower than the spending figures previously released in Office of Management and Budget reports.

Indeed, these OMB documents show spending for information technology security is more than double the Pentagon figures.

What’s a company looking to win cybersecurity business to expect?

Based on an analysis by Deltek, the discrepancy between OMB and Pentagon figures may be related to personnel costs within the overall budget or differences in the way agencies calculate IT head counts.

In the past, the Pentagon has acknowledged this issue, explaining that virtually all of its IT personnel deal with security in some form.

OMB’s budget figures also likely account for cyber-specific commands in the Pentagon.

For contractors, an important aspect of sizing this market is to take into account the mix of government and contractor personnel.

The 2012 OMB report noted that 33 percent of all executive branch agency IT security employees are contractors, a slight drop from the previous year’s report, which indicated that 36 percent were contractors.

Regardless of the precise makeup of agency staffing proportions, one thing is clear: Even in a fiscally constrained environment, the Defense Department prioritizes cybersecurity — and will put forth the money to accomplish it.

John Slye is an advisory research analyst in federal industry analysis at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.

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