Fiscal years 2015 and 2016 will deliver a significant boost to federal civilian agency IT spending, says IDC. According to the report, the federal civilian agencies’ IT budget for the coming fiscal year will be $49.0 billion, which is an increase of 1.9% over the recently updated FY2015 IT budget. But when compared to the original FY2015 budget, the increase is actually 12.4% higher than the initial plan.
Shawn McCarthy, research director, IDC Government Insights notes, “When the federal information technology budget for FY2015 was first approved last year, spending for civilian agencies was set at just under $43.6 billion. Now it appears that spending will jump to nearly $48.1 billion by the end of this summer, which represents an increase of 10.3% for FY2015.”
Additional findings from the report include:
- The main driver for the increase is the Department of Health and Human Services (HHS). IT spending at HHS went from an $8.6 billion originally to $12.6 billion, an increase of 45%. (Proposed spending for FY2016 should drop back to $11.3 billion.)
- Some agencies will actually spend less in FY2015 than originally proposed, with the Treasury Department spending $3.8 billion rather than $4.0 billion. Some of that money has been deferred to FY2016, when Treasury’s IT spending will jump to $4.5 billion, led by large new investments in Mainframes and Servers Services and Support (MSSS) for the Internal Revenue Service.
- Current IT programs with the highest budgets are mostly healthcare related, including the CMS Medicaid Management Information System ($5.7 billion) and the VA’s Medical IT Support efforts ($1.3 billion).
According to IDC, in a recovering economy, federal government spending of all types, including information technology, tends to see a boost. This should continue through fiscal year 2016. The government is increasingly looking to IT service providers and systems integrators to deliver not only turnkey or cloud-based solutions but also to help make recommendations on where costs can be trimmed, says IDC. The research giant recommends vendors should not only work to partner with large systems integrators as a sales channel for their solutions, but should also be ready to pitch cost-saving ideas to integrators who can pass these ideas along to the government.
[Image courtesy: Lockheed Martin]