October 17, 2024

The current DoD IT focus is on modernizing and improving countermeasures against adversaries — especially in cyber capabilities. This is driving investment in offensive and defensive cyber capabilities, as well as the development of a cyber resilient information architecture.  

In this commentary, we’ll look at IT budgeting in the DoD overall, as well as some key defense IT initiatives. 

DoD FY25 IT budget: Focus on IT and cyberspace 

The Information Technology/Cyberspace Activities (IT/CA) FY25 budget estimate of $64.1 billion represents roughly 7.5 percent of the Department’s resources. Over half of that budget ($33.4 billion) is dedicated to operations and maintenance funding. The next two largest IT funding areas are allocated to research, development, testing ($10.4 billion) and evaluation and procurement ($9.1billion). 

The single largest non-national security mission area is the enterprise information environment, which is receiving $27.2 billion in FY25. The cyberspace budget has increased by $1 billion from FY24.  

EDI spending down, PDI up 

The DoD’s emphasis on deterrence is in the Pacific and European theaters. Two key initiatives in this regard are the European Defense Initiative (EDI) and Pacific Deterrence Initiative (PDI). 

EDI: In Europe, the Army is investing in a new physical defensive infrastructure and expanding upon existing information systems. Besides these areas, EDI’s overall budget is decreasing, with more resources shifting to the Pacific theater. FY25 funding for EDI is at $2.9 billion, down from $3.6 billion in FY24. 

The majority of EDI funding is dedicated to physical infrastructure, but IT requirements remain in the form of information system implementation. EDI priorities include increasing presence, supporting exercises and training, improving infrastructure, and building partner capacity. 

Outside of branch budgeting, the DoD will spend some $12 million on intelligence enhancements to provide timely indications and warnings (I&W) and exercise planning. This initiative also funds intelligence sharing of immediate and midrange I&W, all-source analysis, and open-source information supporting U.S. and NATO operations, exercises, and training.   

PDI: While European spending is decreasing, PDI is up from $9 billion in FY24 to some $9.8 billion in FY25. The Air Force and Navy are leading improvement of missile deployment capabilities, new training methods, and cyber operations.   

PDI priorities include modernized and strengthened presence in the Pacific, along with improved logistics, maintenance capabilities, and prepositioning of equipment, munitions, fuel, and materiel.  

Infrastructure improvements will enhance responsiveness and resiliency of U.S. forces, with a commitment to building defense and security capabilities, capacity and cooperation of allies and partners.  

AI budgeting: Spotlight on DLA 

The DoD is adopting AI tools to improve efficiency and maintain a competitive edge in the technology race with adversaries. Among the key players in AI is the Defense Logistics Agency (DLA), with an IT budget of $1.76 billion. Most of this budget is flowing through DLA’s Research and Development program, with a focus on AI tool adoption and improved enterprise resource management. 

AI tool adoption. DLA’s AI tool adoption is divided into several categories, including tech data modernization (budgeted at $8.7 million) and predictive analytics ($3.9 million).  

Funding for tech data modernization is split between two programs: Military Unique Sustainment Technology (MUST) and Defense Logistics Information Research (DLIR). 

DLIR is focused on supporting DLA’s technical data management transformation efforts, and on completing digital twin projects to identify bottlenecks and root causes in DLA processes. 

Funding for predictive analytics will continue to develop more artificial intelligence/machine learning (AI/ML) models for supply chain risk management and supply chain security. Further efforts will also be aimed at integrating blockchain for some of DLA’s business processes, and the use of digital twins (i.e., modeling and simulation) to improve various business processes. 

Enterprise resource management. In terms of enterprise resource management, focus is spread between the DAI financial system (budgeted at $31 million) and smart warehouse modernization ($6.2 million). 

The mission of the DAI financial system is to deliver an auditable, CFO Act-compliant business environment for defense customer organizations, supporting the DoD goal of standardizing financial management practices, improving financial decision support, and supporting audit readiness.  

Smart warehouse modernization will test cybersecure smart-warehouse technologies to transform and modernize distribution and disposition operations. Funding here supports working with industry in researching 5G networks and technologies, sensor Internet of Things (IoT), blockchain, quantum computing, and AI/ML.  

This commentary looked at overall DoD IT investment at an agency level. Over the course of the next several commentaries, we’ll look at IT budgeting for each branch of service under the DoD. 

This article is adapted from a commentary appearing in Washington Technology. For the full article, click here.