U.S. DoD Defense Spending

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Top-100 DoD Contractors:
Top-100 DoD Contractors FY 2014
Top-100 DoD Contractors FY 2013

Welcome to the DoD Defense Spending Section on AeroWeb. This section covers defense spending both by spending type (procure-ment, RDT&E, O&M, MILPERS and MILCON), military service, and defense program.



Sequestration Information


In early January 2013, Congress reached an agreement that averted the fiscal cliff. The deal, however, did not resolve the issue of spending cuts. As Congress failed to reach an agreement, automatic spending cuts known as sequester went into effect on March 1, 2013. The sequester entailed FY 2013 federal spending cuts in the amount of $85 billion of which $31 billion ($37 billion including previous years' cuts) was in defense. The U.S. is the largest defense market in the world and the aerospace & defense industry depends heavily upon U.S. government contracts. Major cuts in defense spending will therefore have a significant impact on the revenues and profits of most major aerospace & defense OEMs and their suppliers. On Tuesday March 26, 2013, President Obama signed into law a government funding bill that ended the 2013 budget fight and locked in $85 billion in sequestration cuts.



FY 2012


In FY 2012 (fiscal year started October 1, 2011), by Budget Authority, the DoD budget was $655.4 billion dollars - $533.1 billion Base + $122.3 billion for Overseas Contingency Operations (OCO).



FY 2013


In FY 2013 (fiscal year started October 1, 2012), by Budget Authority, the DoD budget was $585.4 billion dollars. Of this amount, $501.2 billion is Base funding + $84.2 billion for Overseas Contingency Operations (OCO). A closer look reveals a large decrease in the DoD budget of $70.0 billion or -10.7% from FY 2012 to FY 2013. This includes sequestration of funding pursuant to the Balanced Budget and Emergency Deficit Control Act.



FY 2014


Turning to the budget for FY 2014 (fiscal year started October 1, 2013), the DoD is expected to spend a total of $586.9 billion (by Budget Authority). Of this amount $501.7 billion is Base funding with the remaining $85.2 billion being for Overseas Contingency Operations (OCO). By type of spending, $99.5 billion is for procurement, $142.9 billion for Military Personel (MILPERS), $62.9 billion for RDT&E, and $8.4 billion for Military Construction (MILCON) - with Operations & Maintenance (O&M) and other costs making up the remaining $273.2 billion. A closer look reveals a DoD budget increase of $1.6 billion or +0.3% from FY 2013 to FY 2014.



FY 2015


Turning to the President's Budget for FY 2015 (fiscal year starting October 1, 2014), the DoD is expected to receive a total of $560.5 billion (by Budget Authority). Of this amount $501.9 billion is Base funding (discretionary + mandatory) while the remaining $58.6 billion are for Overseas Contingency Operations (OCO). A closer look reveals a DoD budget decrease of $26.4 billion or -4.5% from FY 2014 to FY 2015. The OCO budget provides $53.4 billion for Operation Enduring Freedom (down from $84.5 billion in FY 2014).

Change in Spending FY2013-FY2014: Total DoD O&M Procurement RDT&E MILPERS MILCON
+0.27% +1.87% +1.74% -0.64% -1.60% +4.02%
Change in Spending FY2012-FY2013: Total DoD O&M Procurement RDT&E MILPERS MILCON
-10.68% -9.91% -20.55% -8.69% -8.28% -29.02%

Total DoD Defense Spending and Procurement | FY 2008 - FY 2014    (updated May 12, 2014)

Looking at the chart above, you can see that total DoD defense spending (Base + OCO) grew from $673 billion in FY 2008 to $696 billion in FY 2010. Since FY 2010, defense spending has decreased every year until FY 2014. In FY 2013, in total, the DoD was allocated $584.4 billion net of budget cuts and sequestration. In FY 2014, the DoD budget is expected to increase slightly to $586.9 billion and then fall to $581.3 billion in FY 2015.

In FY 2014, the total OCO request is $85.2 billion compared to $84.2 billion and $122.3 billion in FY 2013 and FY 2012, respectively.

DoD spending on procurement (Base + OCO) dropped from $165.0 billion in FY 2008 to $97.8 billion in FY 2013. In FY 2014, Procurement spending will grow to $99.5 billion or +1.7%.

All figures are by Budget Authority unless otherwise specified. Source is the official FY 2015 Budget Data from the U.S. Department of Defense.

DoD Defense Spending from FY2008 to FY2013 and FY2014 - Base, Procurement and Total

DoD Spending | Military Personnel, O&M, Procurement, RDT&E, and Military Construction (MILCON)

As a result of large defense budget cuts coupled with sequestration, all types of spending decreased from FY 2012 to FY 2013. Procurement and Military Construction were hit particularly hard and dropped 20.6% and 29.0%, respectively. In FY 2014, the defense budget has stabilized for now at $586.9 billion.

As illustrated by the chart, by far the largest part of the DoD budget is for Operations & Maintenance (O&M) activities. In FY 2014, a $263.2 billion O&M budget is projected, up $4.8 billion (+1.9%) from FY 2013.

In FY 2014, a $142.9 billion Military Personnel (MILPERS) budget is projected, down $2.3 billion (-1.6%) from FY 2013. In FY 2014, a $99.5 billion Procurement budget is projected, up $1.7 billion (+1.7%) from FY 2013.

Another significant DoD expense is RDT&E (Research Development Test & Evaluation). In FY 2014, a $62.9 billion RDT&E budget is projected, down $0.4 billion (-0.6%) from FY 2013.

Another DoD expense is MILCON (short for Military Construction). In FY 2014, DoD spending on MILCON is budgeted at $8.5 billion, up $0.3 billion (+4.0%) from FY 2013.


All defense spending figures are by Budget Authority and include Overseas Contingency Operations (OCO).

DoD Defense Spending by Cost Type FY2008 to FY2014 - O&M, MILPERS, Procurement, RDT&E, MILCON

U.S. Defense Spending by Top DoD Defense Programs | FY2011 - FY2012 - FY2013 - FY2014

In Fiscal Year (FY) 2014 (October 1, 2013 - September 30, 2014), the largest DoD program is the F-35 Lightning II (Joint Strike Fighter). In total (procurement + RDT&E), the F-35 accounts for $7.54 billion ($6.06 billion procurement + $1.49 billion in RDT&E funds). In FY 2014, the DoD will purchase 29 F-35s (unchanged from 29 in FY 2013, 31 in FY 2012 and 35 in FY 2011).

The second largest program is the SSN 774 Virginia Class attack submarine with total FY 2014 spending of $6.69 billion followed by the P-8A Poseidon (737-based maritime warfare aircraft) with $3.66 billion.

Other top FY 2014 defense programs are the DDG 51 AEGIS Destroyer, the Littoral Combat Ship, C-130 Super Hercules, V-22 Osprey, EA-18G Growler, the P-8A Poseidon, AEGIS BMD incl. SM-3, and the Nimitz Class Carrier.

Note that our data may not in all instances match the numbers in the official FY 2015 DoD Major Acquisition Program Data Book, mainly due to the fact that we include spending on modifications and upgrades, support equipment and closely related RDT&E programs) - this to provide a more accurate view of how much is spent on each program/weapon system.

FY2011 FY2012 FY2013 FY2014(p)

Rank Program Name Type User $ Million $ Million $ Million $ Million

Top-10 DoD Programs and Costs

F-35 Lightning II (JSF)
SSN 774 Virginia Class Submarine
P-8A Poseidon
DDG 51 AEGIS Destroyer
Littoral Combat Ship
C-130 Hercules (all variants)
V-22 Osprey
EA-18G Growler
AEGIS BMD & SM-3
Nimitz Class (Refueling Overhauls)

Aircraft
Ship
Aircraft
Ship
Ship
Aircraft
Aircraft
Aircraft
Missile
Ship

JOINT
NAVY
NAVY
NAVY
NAVY
JOINT
JOINT
NAVY
MDA
NAVY

9,682.3
5,468.2
2,908.7
3,274.6
1,478.9
2,130.9
3,071
1,116.2
1,814
1,680.5

9,162.3
4,953.8
2,911.5
2,256.9
2,144.1
2,506.5
2,984.9
1,202.0
2,274.0
704.4

7,629.8
4,770.8
3,132.6
4,912
2,259.9
1,835.9
2,165.9
1,186.9
2,141.4
1,764.3

7,544.9
6,691.5
3,663.2
2,372.1
2,370.6
2,238.3
2,069.8
2,062.6
2,060.0
1,877.0

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DoD Defense Spending by Military Service in Detail | FY2000 - FY2014

In the following, we focus on DoD defense spending by service and cost/expense categories. There are major differences in the way the military services spend their funds. For example, the Army is relatively "low-tech" compared to the Navy and the Air Force, due to the fact that the Army spends a higher proportion of funds on Military Personnel and O&M while spending less on Procurement and RDT&E.

The Navy and Air Force spend more money on Procurement and RDT&E than the Army, even though the latter receives more funding in total. This is explained by the Navy's and Air Force's greater demand for high technology systems (aircraft, missiles, ships etc.). At the same time, the Army relies heavily on manpower to operate. In the following, the differences in spending are highlighted and discussed.

Total DoD Spending by Service | FY2000-FY2014

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DoD Total Budget by Military Service FY2000 to FY2014

The Army receives the most DoD funding followed by the Navy and the Air Force. In FY 2014, the Army will receive $167.4 billion, down from $175.6 billion or -4.7% from FY 2013.

In FY 2014, the Navy will receive $161.0 billion, down from $162.1 billion or -0.7% from FY 2013.

In FY 2014, the Air Force will to receive $151.2 billion, up from $144.3 billion or +4.8% from FY 2013.

Clearly, while the Army has experienced major budget cuts over the last four fiscal years (FY11-14), the Navy, USAF and Defense-Wide agencies (e.g. MDA, DARPA, DISA, SOCOM) have been much less impacted.

The numbers include Overseas Contingency Operations (OCO).

Procurement Spending by Service | FY2000-FY2014

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DoD Procurement Spending FY2000 to FY2014

As illustrated, the Navy is expected to receive the most DoD procurement funds in FY 2014 followed by the Air Force and the Army. In FY 2014, the Navy is projected to receive $42.2 billion, up from $40.1 billion or +5.1% from FY 2013.

In FY 2014, the Air Force will receive $34.2 billion, up from $33.0 billion or +3.8% from FY 2013.

In FY 2014, the Army will receive $17.7 billion, down from $18.8 billion or -5.9% from FY 2013.

Clearly, the Army is procuring much fewer vehicles, aircraft, and other products and services compared to the peak in FY 2008 (FY08-FY14: -73.6%).

The numbers include Overseas Contingency Operations (OCO).

RDT&E Spending by Service | FY2000-FY2014

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DoD RDT&E Spending FY2000 to FY2014

The Air Force will receive the most DoD RDT&E (Research Development Test & Evaluation) funds in FY 2014 followed by Defense-Wide activities (e.g. MDA and DARPA programs), the Navy and the Army. For FY 2014, the Air Force is projected to receive $23.5 billion, up from $22.8 billion or +3.4% from FY 2013.

In FY 2014, the Navy will receive $14.9 billion, down from $15.2 billion or -1.7% from FY 2013.

In FY 2014, the Army will receive $7.1 billion, down from $7.9 billion or -10.3% from FY 2013.

Clearly, the Air Force is the "high-tech" branch of the military.

The numbers include Overseas Contingency Operations (OCO).

O&M, Operations & Maintenance | FY2000-FY2014

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DoD O&M Spending FY2000 to FY2014

As illustrated, the Army will receive the most DoD O&M (Operations & Maintenance) funds in FY 2014 followed by Defense-Wide agencies, the Navy, and the Air Force. In FY 2014, the Army will receive $78.2 billion, down from $79.2 billion or
-1.2% from FY 2013.

In FY 2014, the Navy will receive $55.2 billion, down from $57.7 billion or -4.3% from FY 2013.

In FY 2014, the Air Force will receive $55.8 billion, up from $52.1 billion or +7.2% from FY 2013.

The defense spending figures include Overseas Contingency Operations (OCO).

Military Personnel Expenses | FY2000-FY2014

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DoD MILPERS Spending FY2000 to FY2014

As illustrated, the Army will receive the most DoD Military Personnel (MILPERS) funds in FY 2014 followed by the Navy, the Air Force, and Defense-Wide agencies.

In FY 2014, the Army will receive $62.0 billion down from $65.0 billion or -4.5% from FY 2013.

In FY 2014, the Navy will receive $46.1 billion down from $46.2 billion or -0.1% from FY 2013.

In FY 2014, the Air Force will receive $35.9 billion down from $35.6 billion or -0.7% from FY 2013.


Clearly, the Army relies heavily on manpower.

The numbers include Overseas Contingency Operations (OCO).

MILCON, Military Construction Costs | FY2000-FY2014

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DoD MILCON Spending FY2000 to FY2014

As illustrated, Defense-Wide construction is expected to receive the most DoD funds for MILCON (Military Construction) in FY 2014 followed by the Navy, the Army, and the Air Force.

In FY 2014, the Army will receive $1.7 billion, down from $2.7 billion or -36.9% from FY 2013.

In FY 2014, the Navy will receive $1.8 billion, up from $1.7 billion or +4.5% from FY 2013.

In FY 2014, the Air Force will receive $1.3 billion, up from $0.5 billion or +186.3% from FY 2013.

Army MILCON has been hit hard and is down 85.8% from the peak in FY 2009.


The numbers include Overseas Contingency Operations (OCO).


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