2023 Trends for Defense Contractors
Introduction
The goods and services provided by defense contractors are essential to ensuring the efficacy of the nation’s military. For nearly two decades, the U.S. Defense Department budget has hovered between 3-5% of the GDP. However, to stay relevant, defense contractors must understand trends in defense spending to provide practical goods and services to the military and get a piece of this billion-dollar industry. Below, we’ll discuss some trends to be aware of for the 2023 calendar year.
Updating outdated IT systems
As the U.S. continues to develop plans to deter near-peer adversaries, its current IT systems must continue to evolve. There are plenty of examples of how the U.S. military is making do with outdated technology, from the aging fleet of aircraft in the Air Force to the use of floppy disks in some antiquated computing systems. However, many senior officials understand some near-peer rivals outdo the current pace of technology implementation within the DoD.
Updating these systems will be costly, but it is necessary to maintain a competitive edge in the long run. Of course, there will always be challenges when upgrading from legacy systems. If possible, defense contractors should seek to explain how their solutions will avoid common pitfalls.
Sustainability
We’ve recently discussed marketing energy efficiency to the DoD, and that is undoubtedly part of the push toward sustainability, but it isn’t the whole picture. The DoD’s 2022 Sustainability Plan outlines how the force’s needs are to be met while recognizing the impacts of climate change on installations, equipment, and servicemembers.
In this strategy, the Defense Department aligns resilient and sustainable needs with overarching defense strategy and objectives that help maintain a competitive advantage. The push for sustainability understands that resources are limited, and public expectation is that the government uses taxpayer dollars wisely. By leveraging the purchasing power of the DoD, it hopes to increase the sustainability of the supply chain and achieve net-zero emissions from procurement by 2050.
Some priority actions outlined in the plan include:
- 100% Carbon Pollution-Free Electricity
- 100% Zero-Emission Vehicle Fleet Acquisition
- Net-Zero Emissions Buildings, Campuses, and Installations
- Reducing Waste and Pollution
Small Business Support
The defense industry is built on the backbone of small business support. The Office of Small Business Support oversees and distributes approximately $140 billion in contracts annually to small businesses. Its mission is to “maximize opportunities for small businesses to contribute to national security by providing combat power for troops and economic power for the nation.” In short: this organization is in place to help advocate for your businesses to win.
The DoD recently released its Small Business Strategy, outlining how the department plans to “promote a robust small business base by focusing on reducing barriers to entry, increasing set-aside competitions, and leveraging programs to grow the base.” The DoD recognizes the importance of small business to the U.S. economy and has increasingly been looking to tap into this resource to maintain its competitive edge.
Defense contractors need to stay ahead of the curve to succeed.
Just as the DoD does, defense contractors should take cues from ongoing operations and planning guidance provided to make effective decisions. Having a deeper understanding of the needs of the military can help small businesses stay ahead and shine as the solution to whatever challenge the DoD is facing. By consistently performing in this way, companies can position themselves as leaders in their industry and continue to grow.
Conclusion
We know that your business can help solve the military’s current issues. However, you may be unsure how to put your best foot forward and win the government contract – that’s where we come in.
Contact us to schedule a demo and see how we can help!