Defense contractors are adapting to shrinking defense budgets by shifting their focus from weapons production to information technology contracts. As the Cold War and War on Terror wind down, the U.S. Department of Defense budget is expected to continue decreasing, negatively impacting states home to major defense contractors that previously relied heavily on weapons contracts. However, many contractors are now pursuing contracts for cybersecurity and IT products rather than traditional weapons, reflecting the Defense Department's changing priorities in the 21st century.

1. The Reinvention of Defense Contractors in an Era of Shrinking Budgets
With the Cold War long over, the War on Terror winding down, and a budget crisis looming
over Capitol Hill, it is not surprising to learn that decreases in spending by the U.S. Department
of Defense are likely to continue and worsen in coming years. States that house companies that
once relied on contracts from the Department of Defense for much of their income, including
California, Virginia, Texas, Florida, New York, and Maryland, will feel the budget cuts most
drastically.
Rather than giving up hope, however, many defense contractors are shifting their focus in order
to remain relevant in a changing world. Whereas the majority of defense contracts used to
involve the production of weapons and other defense equipment, many of today’s contracts are
for information technology products. This new trend reflects the shift from “traditional” security
and defense measures, or those that played out in the air, on the land, and at sea, toward
cybersecurity and defense, top priorities for the Department of Defense in the 21st century.
About Christina Kauffman: In her work as a Capture Manager with Lockheed Martin’s
Enterprise IT Solutions, Christina Kauffman has witnessed firsthand the adaptations that defense
contractors have had to make in recent years in order to remain relevant. Prior to joining
Lockheed Martin in 2007, Kauffman served with the U.S. Army Corps of Engineers.