recommended reading

Why are Government Contractors Cutting Their Cybersecurity Budgets?

Government contractors reduced their spending on cybersecurity in the past year, despite several high-profile data breaches, a new survey shows.

About 52 percent of businesses reported a slight decrease in cyber spending in the past year. About 17 percent said their cyber spending increased dramatically, while 31 percent said it increased slightly, according to a new survey from contracting analysis firm Deltek.

"We're surprised that over half of the companies . . . had experienced decreased spending in cybersecurity," Deltek Vice President Kevin Plexico said during a call discussing the results. "Our best guess is that the ones that are decreasing are probably not the ones that have had breaches."

Still, about 46 percent of respondents said they had experienced some type of physical or virtual breach, according to Deltek. About 33 percent said they experienced denial-of-service attacks, 33 percent cited data breaches and 13 percent pointed to physical breaches. 

Large contractors are also cutting their overall IT budgets, Deltek found. About 60 percent of large firms -- generating $100 million to more than $1 billion in annual revenue -- decreased their IT budgets last year. Sixty-six percent of small firms, generating less than $20 million, saw an increase in IT budgets. 

That divergence between small and large firms will probably even out through 2016, the report said, because large companies said they expected a slight increase in IT spending, while smaller companies expected a decrease. 

During the call, Plexico said he was "a bit surprised" at decreasing IT budgets, because "normally, when you see companies growing . . . you sort of expect that IT budgets are going to grow along side that."

But respondents reported feeling pressure to "effectively decrease cost so that overhead cost could be recaptured in profit," he said. 

When asked about their biggest IT challenges, budget pressure and IT security were among the most frequently cited, according to Deltek.

Government contractors are diversifying beyond federal business, the report said. About 62 percent of contractors' business came from federal customers last year, the survey found. The previous year, about 427 firms reported 84 percent of their business came from federal customers. 

"Firms made it clear that they are not standing still waiting for the business environment to improve," Deltek's report said. "Companies are expanding their operations outside of federal contracting in search of higher-growth markets."

(Image via

Threatwatch Alert

Network intrusion

Florida’s Concealed Carry Permit Holders Names Exposed

See threatwatch report


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.


When you download a report, your information may be shared with the underwriters of that document.