How to Approach Declining Federal IT Spending


Contractors should be prepared, Deltek says.

More efficient federal information technology systems will require fewer dollars, according to a new report from Deltek that predicts agency IT spending will fall from $101 billion to $94 billion in five years.

Deltek factors in IT spending that often is left out of the overarching budget numbers, such as technology for the judicial and legislative branches and the intelligence community, as well as IT embedded in large defense systems.

Today’s technology offerings and policies promise savings down the road, including data center optimization, strategic sourcing, shared services and cloud computing, Deltek said.

“This transition to a leaner federal government — and the ability to sustain it — requires technologies that facilitate the consolidation, integration and standardization necessary to develop uniform IT platforms known as Common Operating Environments,” Deltek said.

The one-enterprise perspective will shrink budgets in the long term, Deltek predicted. Still, agencies will need cybersecurity and data analytics technology to support their mission priorities, the report said. The Defense Department in particular will need intelligence, surveillance and reconnaissance and health IT, Deltek noted.

Smaller budgets are the new normal and will remain that way, even if sequestration ends. “Agency leaders want more control of where cuts happen,” said John Slye, Deltek analyst. “This means redefining priorities and acquisition strategies to fit within new budget realities.”

Contractors must have strategies in place to identify growth opportunities and to protect their market share.

(Image via JohnKwan/