As federal authorities centralize and strengthen cybersecurity, niche opportunities continue to develop for small businesses.

Federal funding for cybersecurity is growing, with Deltek forecasting an increase from $9 billion in fiscal 2011 to $14 billion by fiscal 2016. In one example, the Homeland Security Department is preparing a major contract for continuous automated monitoring of networks and systems.

Agencies including the International Revenue Service and the Commerce Department’s National Cybersecurity Center of Excellence have created set-aside contracts for cyber-savvy small businesses. The Office of the Secretary of Defense last month issued a Request for Information from small vendors for cyber-related consulting for Microsoft products, among other services.

“The main opportunity for small businesses is to add innovation,” Donna Dodson, chief of the national cybersecurity center, told Set-Aside Alert. “As we identify the need for new technologies, there will be a pipeline.”

The smaller federal cyber contracts generally are won by security specialists, often in academia, especially those with unique capabilities such as patching against new types of malware, said Michael Weir, senior systems analyst with Quanterion Solutions Inc., which has a contract with a Defense Technical Information Center Information Analysis Center.

“These won’t be big awards,” Weir said. “You have to look for niche opportunities.”

Even so, there may be shrinkage. The 10 DOD analysis centers, which have set-asides for small firms, are consolidating to six contracts.