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Defense Employment and Purchases Projection System (DEPPS) Background
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DEPPS projects annual DoD demand - both direct and indirect - for defense purchases and skilled
labor by industry and by state. Projections of direct defense purchases can be derived from DoD planning documents.
Direct defense expenditures are those that the Department of Defense (DoD) itself
makes. These include purchases of goods and services, as well as military and civilian pay.
Indirect (or defense-related) expenditures, by contrast, represent purchases-generated throughout
the economy--of items used to produce goods bought by DoD. That is, indirect expenditures reflect
the costs of materials, tools, and parts that prime contractors buy from suppliers in order to
perform work for which DoD has contracted. Those sales, in turn, trigger subsequent rounds of transactions,
as subcontractors purchase goods and services from their major suppliers and those firms place orders with
companies at lower tiers of the production chain. The term "indirect defense purchases" applies to this
sequence of purchases--goods and services from subcontractors and lower-tier suppliers and is reflected in
the figure below. These indirect defense purchases are at least as important to industry planners and DoD
analysts as direct defense purchases. Consequently, DEPPS combines contract award data, budget data,
Commerce department data, and an economy-wide input-output model to compute total defense purchases implied
by DoD direct purchases - captures indirect purchases as well.
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