Proposed Budget Deal Offers Stability for Federal IT

The budget deal struck late Tuesday by House and Senate negotiators should offer some predictability for government information technology shops if it wins approval but won’t make it any easier to hire top IT talent into government, analysts said on Wednesday.

The deal includes $63 million to roll back part of the automatic spending cuts known as sequestration.

About two-thirds of the $80 billion the government spends annually on IT goes to operations and maintenance for ongoing projects, which was largely untouched by sequestration and related budget uncertainties. Some of the sequester relief could go to the roughly one-third of IT spending devoted to new initiatives, including White House priorities aimed at long term IT savings, such as consolidating federal data centers and moving more federal computing to the cloud, analysts said.

The deal could also make planning easier for agency chief information officers and federal technology contractors, said Tim Young, a principal in Deloitte Consulting’s technology practice and former deputy administrator for e-government and IT at the White House Office of Management and Budget.

“This will enable the government and firms supporting the government to be strategic rather than tactical or operational in planning program support,” he said. “They won’t have to plan in one-month stretches.”

The character of new initiatives is likely to vary from agency to agency, Young said, but will largely focus on cybersecurity and programs that promise to reduce federal IT spending in the long term.

IDC Government Insights Research Director Shawn McCarthy cautioned, though, that agencies’ hesitancy to launch new programs during the past few years was likely driven as much by the need to study and understand a new technological paradigm including mobile technology and cloud computing as by budget uncertainty.

“I won’t say sequestration has had zero impact, but it doesn’t tend to affect IT as much as it affects other procurement efforts,” he said.

The budget deal will also require new federal employees to pay 1.3 percent more toward their pensions and offers no relief for federal pay freezes.

That will likely make it harder to hire top tech talent into government, Young said. It may be offset, though, by a growing sense that government can be flexible and innovative driven by projects like the White House’s Presidential Innovation Fellows program, he said.

“My view is that compensation alone motivates very few people, whether you work in the private or the public sector,” Young said. “A lot of people in the first half of their careers come to government because they want to have an impact on a societal level and no private sector organization yields an opportunity on that level.”

The overall weak economy should also make federal hiring easier in the short term, McCarthy said.

For existing federal employees, Young said, the budget deal should be uniformly positive news.

“The last year or so of sequester and furloughs and rhetoric from Congress about not supporting the federal workforce probably led to the lowest morale I’ve seen in my lifetime in the federal workforce,” he said. “This deal, if enacted, I think, will help morale.”

(Image via Maksim Kabakou/Shutterstock.com)