Winners in the FY21 Defense Budget Request

By Toné Mason, Senior DOD Analyst

The President is requesting $705.4B in DOD funding for FY21, which is a modest 0.1% increase from FY20. The biggest winner by far is U.S. Space Force, but there are still plenty of opportunities across DOD and the services for IT vendors.

Announced in FY20, funding for Space Force in FY21 is largely focused on providing funding for the establishment of the organization as a whole. More details regarding metrics and objectives are anticipated to be further developed over the next few years. From what we know at this time, automation, infrastructure, cyber and data analytics are anticipated to be key areas of interest for them.

Here’s a summary of DOD budget highlights for FY21.

Department of Defense

The FY21 budget would provide DOD RDT&E with the largest budget in the Department’s history, where they are seeing major emphasis on the development of emerging technologies including:

  • Microelectronics/5G ($1.5B requested)
  • Autonomy ($1.7B requested)
  • Artificial Intelligence ($800M requested)

Throughout DOD, IT Modernization continues to be a key theme. One notable example is military health, where more than $800M would go towards the Defense Health Agency’s combined effort with the Department of Veterans Affairs to modernize healthcare records management for veterans and active military.

Air Force

Space Force has moderately impacted the Air Force’s budget, with a 5% increase over FY20. The Air Force remains focused on improving their financial management processes and operations through the joint Defense Enterprise Accounting and Management System (DEAMS) and the Air Force Integrated Personnel and Pay System. Collaboration and creating operational efficiencies are key areas of focus for Air Force IT.


The Army has the largest IT Budget of all the armed forces. Army IT funding is largely being directed towards cloud migration pilots, enterprise-as-a-service initiatives and network consolidation efforts.

With key IT programs such as the General Fund Enterprise Business System (GFEBS) and the Global Combat Support System – Army (GCSS-A), the standardization of information, reduction in legacy systems and interoperability is where the Army is headed.


Navy funding for FY21 is focused on improving legacy platforms and investments in new technologies, including predictive analytics, hybrid cloud and cyber operations. Key initiatives that industry should keep an eye on include:

  • Consolidation and standardization of acquisition, financial management and logistical operations processes
  • Consolidation of overlapping functionality and data in maritime scenarios

All in all, the Navy is focused on cleaning up their data and realizing savings by reducing duplication.

Marine Corps

IT investments for the Marine Corps align with the Navy’s, with a key focus on the improvement of logistical and cyber operations. The top programs seeing an increase in funding for FY21 include:

  • The Enterprise Logistics Support Systems (ELS2) ($12.9M increase requested)
  • The Global Combat Support System – Marine Corps (GCSS-MC) ($8M increase requested)

Data management, cloud migration and artificial intelligence are anticipated to be key technologies.

It is unknown how COVID-19 will affect the final FY21 DOD budget or how it will impact IT spending. However, logistics operations, financial management and cyber operations are key technology themes that will persist.


If you’re interested in delving in agency priorities and budgets, please reach out to immixGroup’s Market Intelligence team to help support your efforts.

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About Toné Mason
Toné Mason is a Senior Analyst on immixGroup's Market Intelligence organization. She has a B.A. in Government and International Politics from George Mason University. Prior to joining, Toné was a Business Development Intelligence Analyst at Chenega Corporation and previously a Research Analyst at Deltek working on their GovWin product.

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