ARLINGTON, Va., Oct. 29, 2004. The Government Electronics and Information Technology Association (GEIA) has released its 40th Annual DoD 10-Year Forecast, including an in-depth look at the Defense Departments Operations & Maintenance Budget (O&M).
Total O&M funding is forecast to grow from $140.6 billion in FY 2005 to $159.6 billion in FY 2015, in FY 2005 constant dollars. This amounts to a compound annual growth rate of 1.3%.
In order to focus on the portion of these funds that are "addressable" for defense firms involved with electronics, platforms and providing services to DoD, the "non-addressable" items are removed, e.g. government salaries, food, fuel and travel funds.
The addressable O&M forecast is $34 billion in FY 2006, about one-quarter of the total O&M budget, and grows to $42 billion in FY 2015 (FY2005 $).
The addressable market grows at a faster rate -- 2.1% versus total O&M at 1.3% -- because of the increasing use of technology, as well as the automation of labor functions, outsourcing, and faster growth in functions such as information services.
"Future success in the O&M Market will require contractors to think differently about their business models and partnerships," said GEIA President Dan Heinemeier.
"These will be conditioned by agility and flexibility, such as assured supply in theatre in 96 hours and IT-driven solutions, including network-centric enterprise architectures for logistics and training. Success requires a focus on the warfighter as the primary customer who needs reduced cycle times along with the integration of logistics, training and other functions into the warfighting mission."
GEIA is a trade association representing the "high-tech" industry doing business with government. Our member companies are active in serving the electronics-related and information technology-related needs of their government customers. We connect industry to government through a unique forecasting process, conducting hundreds of customer interviews in which our members directly participate. GEIA analyzes and issues reports on the federal market for IT solutions, enabling technologies, and advanced electronics products and services of all kinds. Its publications include: an annual 10-Year Defense Electronics Forecast; an annual 5-year Federal IT Forecast; and special market studies of the government market such as Services & Support, Homeland Security, Information Assurance, etc. For more information, see www.geia.org.