Budgets cuts and the continuation of sequestration means that federal IT will lag behind for the next several years, according to Washington-based nonprofit TechAmerica’s annual forecast.
 |
| Total Federal IT Market Forecast For FY14-19. Graph: TechAmerica. |
The Vision Federal Market Forecast charts a drop of $16 billion in the total federal IT budget since its high of $86 billion in 2009 (constant dollars). TechAmerica predicts the only increases in federal spending on IT in the next five years will be due to inflation.
The Department of Defense will also be subject to the IT crunch. Declining Overseas Contingency Operations (OCO) funds will create a shortfall in Operations and Maintenance (O&M) funds, which may impact IT. As DoD continues to accept outsized cuts in discretionary spending compared to other federal agencies, IT budgets will be further pressured to compete with other operational costs such as real estate, said TechAmerica spokesman Robert Haas.
“One interviewee suggested that there’s no more money under the couch cushions,” Haas said, and the budget cuts could have a greater impact in FY14 than anticipated. Any savings that agencies can manage go to meeting sequestration cuts versus investing in new projects.
IT budget growth resulting only from inflation will stagnate agencies’ purchasing power.
“They’re not gaining much in terms of purchasing power in terms of today’s dollars, so the challenge is that they’re going to have to become more efficient,” Haas said.
Contractors will face the same difficulties in maintaining long-term contracts, as the budget is not increasing in real dollars. Contractors could also face lower profits as “low price, technically acceptable” becomes the new norm.
“The challenge for IT contractors is what that means for their multiyear contracts and how they price their labor over that time frame,” Haas said.
DoD has been attempting to streamline its IT infrastructure with the Joint Information Environment (JIE), but it needs further definition to be useful. Haas said it “offers a lot of opportunities” but is “more like a framework.”
TechAmerica also noted a significant change in tone from the hundreds of federal workers interviewed for the yearly assessment. It uses these interviews to form its predictions.
“There was a resignation that we’re going to be doing less with less,” Haas said. “Last year I think everyone believed that the sequestration would be resolved.”
What has improved IT infrastructure in the commercial sector has not been fully translatable to the public sector, including DoD.
“Security is slowing the movement to cloud and mobile technologies,” Haas said, as agencies express concern over where data is stored in a cloud- and mobile-heavy environment.
Despite the negative implications of the report, Haas said there is room for opportunity in leveraging big data to drive decision making; creating security platforms that can perform across multiples types of devices; and using the Internet for training where in-person courses become too expensive.