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Federal agencies will continue to spend heavily on information technology over the next five years, but the pace and direction of spending will be complicated by shifting priorities, congressional constraints and a presidential election.
The bottom line is that the overall rate of IT spending will be above US$98 billion each year for next six federal fiscal years, according to a forecast Deltek released last month during the company’s Federal MarketView Forecast conference.
The funding level applies to what Deltek calls the “addressable” IT contract market, comprised of 58 federal agencies including intelligence units, the U.S. Postal Service and the judiciary.
The federal IT budget as calculated by the Office of Management and Budget covers just 26 agencies, mainly cabinet departments. The OMB figure for IT investments has hovered around $80 billion for several years.
Federal IT spending will reach $99.8 billion in fiscal 2016, then drop and level off to $98.0 billion in 2017, $98.1 billion in 2018, $98.0 billion in 2019, $98.2 billion in 2020 and $98.4 billion in 2021, the Deltek forecast shows.
However, the relatively flat level “hides the major disruptions taking place in agency technology priorities,” said Kevin Plexico, vice president for research at Deltek.
“Cost saving initiatives are the primary driver for most major investments,” going forward, he noted.
Read more: Changes in Federal IT Spending Require Nimble Contracting
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