MA

Running a “Back-of-Envelope” Calculation of Defense Component FY 2022 Cyber Budgets

Published: September 09, 2021

Federal Market AnalysisUSAFARMYBudgetCybersecurityDEFENSENAVY

As the Pentagon releases less and less data on their cyber budgets there is a way to roughly estimate what money the DoD components want for FY 2022.

Cybersecurity and related cyber operations has been a growing priority across the federal government for years, especially at the Department of Defense (DoD). A day rarely passes where we do not see in the trade media an account of what the DoD or one of its branches are doing to meet their cyber challenges, often with the help of contracted product and service providers.

This constant drumbeat stands in stark contrast to the level of budget detail that the DoD has been providing over the last several years. Increasingly with each budget cycle, the DoD has been drawing the veil ever-wider over its IT and cyberspace budgets, with the result being less visibility and transparency into the department and component spending plans. This is the case with the current FY 2022 DoD Information Technology (IT) and Cyberspace Activities (CA) Budget Request released this summer (i.e. later than usual, even for a new administration.)

In several previous budgets, the DoD has provided both total DoD IT/CA budget projections broken out by functional area (cybersecurity, cyberspace operations and R&D) and total budget projections for the defense agencies and each of the component military departments (MILDEPS). Usually, these projections would go out a few additional years beyond the budget request year (BY), which was very helpful in understanding what the DoD was planning for the future.

However, for this FY 2022 budget cycle, the DoD provided only total DoD IT/CA functional area budgets for the coming budget year, FY 2022, and no CA information for the components, resulting in a reduced ability to sense where DoD is going with their CA budget beyond the next fiscal year and no visibility into the MILDEPS.

That said, we can do a side-by-side comparison of what they planned to budget in FY 2022 in last year’s FY 2021 budget request alongside what they have actually requested, now that the FY 2022 BY is upon us. The result is a $102M increase (from $9.846B to $9.948B) in their estimated FY 2021 budget that ends in a few weeks, and a $263M increase (from $10.108B to $10.371B) in their planned FY 2022 budget over what they had planned in last year’s budget. (See chart below.)

To be most beneficial though, we really need to see how those dollars are allotted across the components. To do that I looked at last year’s FY 2021 CA budget component break-outs and ran some very loose “back of envelope” calculations to see what came out. Since DoD provided component CA planned budgets for FY 2022 in last year’s budget, I simply calculated the relative proportions of each component vis-à-vis the total CA budget and applied those proportions to the updated (higher) FY 2022 total CA budget request. The results of my loose projections for FY 2022 may be compared to last year’s budget figures for FY 2021 and FY 2022. (See chart below.)

If the relative proportions of each DoD component in the FY 2021 CA budget remained static for the FY 2022 budget then we can see how that $263M in total CA budget growth mentioned above is allotted among the components, specifically $94M Defense-wide, $74M at the Air Force, $51M at the Army, and $45 at the Navy.

I recognized that it is pretty unlikely that the relative budget proportions of each DoD component would remain perfectly static from one BY to another. Further, this approach would not account for major programmatic or organizational shifts within the DoD’s cyber operations landscape. However, reading through the DoD’s cyber budget priorities and comparing year-to-year changes in the broad functional areas of cybersecurity, cyberspace operations and R&D in the FY 2022 budget, it appears that only cyber-related R&D spending might see some budget softening in the coming fiscal year.

It that were the case, then we might expect that some of the funding increases projected above might shift away from research-focused agencies such as the Defense Advanced Research Projects Agency (DARPA) and the Air Force Research Laboratory (AFRL), therefore moderating the Defense-wide and Air Force increases and amplifying growth at the Army and Navy.

Looking at potential top-line FY 2022 amounts for each component is helpful from a scale and direction perspective, but another approach to identify cyber spending at the investment level. For an example, see my colleague’s look at Army spending on cybersecurity and warfare in the FY 2022 budget. (Spoiler alert: not all cyber funding is identifiable at the investment level.)