GovWin
OMB FY 2017 Budget Guidance – Agencies Told to Cut More

While the FY 2016 federal budget appropriations bills are working their way through Congress, the Office of Management and Budget (OMB) is looking to FY 2017 and has again directed agencies to submit lower discretionary budgets.

Following their normal budget process and timelines, federal agencies are beginning to prepare their FY 2017 budgets, which will not be submitted to Congress until February 2016 to take effect that October, more than 16 months from now.  As is customary for this time of year, OMB issued a memo with specific budget preparation guidance for FY 2017 to outline any new or specific parameters that agencies are to follow.

Discretionary Budget Requirements

Key provisions in OMB’s guidance to agencies for their FY 2017 budget submission include:

  • A five percent reduction below the agency’s net discretionary total for FY 20 17 as stated in the FY 2016 Budget (unless otherwise directed by OMB)
    • The 5 percent reduction is to apply equally to defense and non-defense programs. Agencies that are split between the two may not reduce one area more than 5 percent to offset the other area.
  • Requirement to sufficiently fund ongoing Presidential priorities
  • Inclusion of a separate section that identifies recommendations on how they will continue efforts to increase effectiveness and reduce fragmentation, overlap, and duplication
  • Identifying additional investments in programs that support their missions, especially programs with strong evidence of effectiveness. However, the agency’s total net discretionary for FY 2017 may not exceed the FY 2017 total provided in the FY 2016 budget request. Agencies should separately identify and rank these investments by priority.

As in previous years, agencies are to exclude the following:

  • Shifting costs to other parts of the Federal budget
  • Reclassifying existing discretionary spending to mandatory
  • Reductions to mandatory spending to be enacted in appropriations bills
  • Across-the-board reductions
  • Enacting new user fees to offset existing spending, (although agencies may submit these separately as alternative ways to achieve the guidance level.)

Other Parameters

In addition to the directives above, agencies are instructed to continue to support the President's Management Agenda (PMA) focused on agency effectiveness and efficiency as well as government-funded data and research efforts and workforce improvements. In support of the PMA, OMB wants agencies to focus on

  • Implementing CAP goals
  • Using data-driven management reviews (e.g. FedStat)
  • Supporting Agency Digital Service Teams
  • Reducing their real property footprint
  • Reducing improper payments
  • Enhancing shared services
  • Implementing the DATA Act and FITARA.

Further, OMB wants agencies to prioritize institutionalizing the use of data and evidence to drive better decision-making and achieve greater impact at their agencies.

While there are no surprises or major changes in how OMB is directing agencies to develop their budgets over recent years, it seems that the number and complexity of requirements continues to grow.

State and Local AEC Snapshots: Los Angeles County, California

The nation’s largest local government, Los Angeles County, Calif., recently released its proposed $26.9 billion, 2015-2016 budget. The plan includes a slight increase from the 2014-15 recommended budget of $26.1 billion (the final adopted budget was $27.1 billion). The chart below provides a breakdown of the six major funding groups listed in the budget, with health services, public protection and public assistance each accounting for about 30 percent of the overall budget. The proposed plan is now in the hands of the Board of Supervisors, which will work on revisions before a final budget is adopted by the start of the fiscal year.

The county’s highest expenditures fall to criminal justice systems and jail facilities, child welfare systems, and health care systems. The proposed budget provides funding for 106,807 full-time equivalent positions – an increase of 1,304 from the 2014-2015 budget.

A total of $99.2 million is allocated for criminal justice improvements, including inmate health, suicide prevention, and curbing excessive use of force. Also, 542 positions have been added to reduce caseloads and improve the child welfare system. Along with having the biggest increase in employees, the child protection group has $66.9 million budgeted for its programs. Further, the county set aside $22 million and 350 new health care positions to support Affordable Care Act efforts enacted in 2014.

The proposed budget also includes $726.3 million for 229 capital projects that are under development, design, and/or construction. Although there was a $109.8 million decrease from the 2014-15 adopted budget, this is due to 42 projects being completed last year. High-dollar projects include $36.5 million for a new parking structure at the Martin Luther King Jr. Ambulatory Care Center, and $33.6 million for new outpatient facilities at the Rancho Los Amigos Medical Center.

The chart below provides a snapshot of orders filled by the top 10 companies during the 2013-2014 timeframe. This information is helpful for vendors looking to win business in the same areas of expertise.

You can learn more about Los Angeles County in GovWin IQ’s government snapshot tool, which combines government data with Deltek’s expert analysis and forecasting tools. Our government snapshots provide vendors with key information on spending, population, agency contacts, employment, bids, and more so that they can make informed business decisions in their target markets. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

State budget overview: Critical information on priorities and funding for vendors

As spring progresses, news from most states is centered on legislative actions (some controversial) passed before the annual sine die adjournment of the state legislature. With that backdrop, many state legislatures will approve budgets for the coming fiscal year or biennium. Beyond the headlines about the growth of government and funding cuts to pet projects, or the spin promulgated by lawmakers’ press releases and governor budget addresses, vendors can find essential information on state priorities.

A state’s budget and how it passed into law is important information for a vendor to have when deciding in which states or localities to compete for business. For most states, the budget process follows the same approval path by the full legislature and the governor’s signature. The first step in this process generally comes from the state agencies themselves. In most cases, these agencies report to the governor as part of the executive branch. The agencies conduct their own planning and budgeting process and submit a request to the governor’s budget team or office. The governor and his or her team then decide which priorities and funding to include and compile a document of the governor’s recommendations for submittal to the state legislature.

At Deltek, we spend quite a bit of time compiling and analyzing the state governors’ recommended budgets. The budgets, along with other compiled data,  are contained in Deltek’s State Government Profiles. The profiles provide essential and in-depth reference and research on state budgets, procurement, and organizational details to assist contractors in building important state buyer relationships and quickly ramping up new government sales professionals.

A governor’s proposed budget is by no means the final budget that makes it out of a state legislature, though it provides valuable insight about the executive priorities and the fiscal condition of the state. These documents also provide us with historical expenditure data, which allows for a more in-depth analysis of budget trends and fiscal realities. 

Following the governor’s lead, the state legislature begins work on their own version of the budget. Sometimes they use the governor’s recommendations as a starting point, but this is not always the case in adversarial political environments. Both houses of the legislature (for every state but Nebraska) weigh in on the budget as it goes through the normal process of committee and floor votes, and then conference committees work to reconcile any differences. The legislature submits the budget to the governor and he or she decides to approve it or not.  

For vendors, both the governor’s proposed budget and the final version are important documents. They can help to understand both the priorities of an administration and the reality of the political system and/or fiscal climate. Of course, they also offer insight into exactly where state funding is flowing and which departments will be looking for vendor support. 

In the coming months, look for the compilation of state budget data, including IT line items and detailed Deltek analysis of this data. In addition, vendors in the architecture, engineering and construction (AEC) space should watch for more budget data specific to state investment in AEC as outlined in state capital budgets.

You can learn more about state budgets in Deltek’s State Government Profiles. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial

 

State and Local AEC Snapshots: Harris County, Texas

Harris County is the largest county in the state of Texas and the third-largest county in the United States. With a rising population exceeding 4 million residents, the county’s expenditures are rapidly increasing at a Deltek-estimated rate of 7.1 percent.

Harris County is also home to the largest medical complex in the world, the Texas Medical Center (TMC). As the county expenditure charts below illustrate, the county spends the most money on hospitals, and construction is a major component. For example, the University of Texas M.D. Anderson Cancer Center was estimated to spend $198 million on hospital expansions in 2014. The total size of the TMC is currently 45.8 million square feet and is estimated to reach 59 million square feet in the near future, according to the Greater Houston Partnership. 

Another category that pulls in high dollars is toll highways. The Texas Department of Transportation (TxDOT) recently awarded the SH 288 Toll Lanes Project in Harris County to Blueridge Transportation Group, which will be tasked with the development, design, construction, finance, operation and maintenance of tolled lanes, general purpose lanes, and associated facilities along a 10-mile stretch of SH 288 – from US 59 to the Harris County line at Clear Creek in Harris County.

 

Additionally, the Aggie Highway project involves work within Harris County and Montgomery County to provide a direct route from College Station to Houston. Harris County began constructing their portion of the toll way in 2013, and work is expected to be completed in 2015.

 

With both the population and spending on the rise, Harris County will also see an increase in construction and/or transit projects over the next several years. Architecture, engineering, and construction (AEC) firms should pay particular attention to the rapidly growing hospital and toll markets, and also take note that the county has set aside $145 million in the FY 2015-16 budget for infrastructure and systems projects.

 

 

You can learn more about Harris County in GovWin IQ’s government snapshot tool, which combines government data with Deltek’s expert analysis and forecasting tools. Our government snapshots provide vendors with key information on spending, population, agency contacts, employment, bids, and more so that they can make informed business decisions in their target markets. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

 

Capital improvement plans 101 and the benefits of GovWin IQ Lead Alerts

A capital improvement plan (CIP) is a useful document that state, local and federal governments use to organize and prioritize projects. CIPs tend to forecast one, five, 10, or even 20 years in the future, and are a vital organizational step in the procurement process. They allow an entity to set department-specific goals, rank projects by priority, allocate funds, and organize business plans.

On the procurement side, capital improvement plans allow vendors to track a project through its life cycle and get a better sense of when to expect a solicitation. Due to the nature of CIPs, the procurement forecast provides ample time for vendors to prepare for an upcoming bid, and sales reps to build a strong business pipeline. 

How does a capital improvement plan come to fruition?  

 

1. Requirements are determined - An entity identifies a need and determines requirements for a project. Once a plausible plan is outlined to fulfill that need, the project is submitted for review and approval.

2. Projects are approved - Higher authorities (city council, a mayor, a governor, etc.) will review projects submitted for CIP consideration and deny or approve items based on importance and available resources. This step often correlates with creating a budget.

3. Funding streams are identified – Once a project is approved, funding streams are identified. Budgets allocated to CIP projects can stem from multiple streams including general funds, special funds, bonds, etc. Funding sources often depend on the type and size of a project. It’s also important to note that, once funding has been secured, a project timeline may not mimic the funding timeline. Depending on what is being purchased, a payment plan may need to be outlined and adjusted. Some projects will start with a bulk payment, whereas others will rely on annual payments.

4. Timelines are established – Once funding is identified, timelines are established for project execution. This provides the entity and vendors with an estimated guide for when each step of the project should occur.

5. Projects are published in a CIP - At this point, projects have been approved and funding has been secured (or in the process of being secured, depending on the legislative season). Now, projects are formally published in a capital improvement plan and set in motion. Vendors can track a project’s progress as the CIP is updated (often annually). 

What happened to my project?

Sometimes a project can be forecasted far in advance, but is never executed. This happens when higher-priority or unexpected projects arise and take precedence on timelines and funding. When this occurs, less urgent projects are often pushed back a year or two. If a project is put on the back burner, entities will sometimes try and fulfill the need in another manner, such as combining it with another project or eliminating a formal procurement process. This is why it is important to keep an eye on CIPs and compare projects year to year. As an entity grows and changes, so does its needs, and a CIP will reflect that.

What other information can I get from a CIP?

Capital improvement plans offer much more than a list of projects an entity is interested in pursuing. Budget details and dollar amounts for specific projects are typically outlined in a CIP, and organizational charts, department heads, and contact details can also be included with each project. Some CIPs even include funding sources per project. In these cases, various contributors to capital funding (i.e. taxes, revenues, grants, etc.) will be listed. Further, capital improvement plans can also include historical data of expenditures and how entities typically allocate their budget.

Where can I find a CIP?

Capital improvement plans are mostly found on government entity websites, usually under finance, budget, public works, or planning department sections. It’s important to note that CIPs are often part of an annual budget document and not clearly posted as a separate document; therefore, it’s worth reviewing budget files to see whether a capital improvement list is included. Also, if an entity does not post CIP or budget documents online, it never hurts to reach out to someone in the finance department to see if one can be sent directly.

Isn’t there an easier way to locate these documents? (Yes! GovWin IQ Lead Alerts)

Think of GovWin IQ Lead Alerts as the first hint of a project – that initial heads up from a CIP that lets vendors know what an agency’s needs are how their products or services might align with those needs. Now, reading through a CIP or budget document is no easy task; they are often in excess of a hundred pages and quite time consuming to digest. Naturally, contractors aren’t able to devote hours a day to researching and reading through these forms; they are focused on winning business and face-to-face interaction with potential clients. Again, this is where GovWin IQ has you covered.

Our analysts are scouring government websites and reviewing state and local capital improvement plans on a daily basis to identify new projects across all vertical market and provide updates on past CIP initiatives.

State and local leads coverage includes:

  • 50 states
  • 366 metropolitan statistical areas (Nearly 3,000 cities and counties)
  • Special districts, public universities, and independent school districts

What projects details are included in a Lead Alert?

  • Project value: Funding identified by government agency
  • Lead year(s): The year or range of years a project is budgeted
  • Associated documents: The source from which the lead was generated (budget, CIP, article, etc.)
  • Key contact(s): Primary and secondary contacts associated with a project
  • Project ID: Government-specified project number or code
  • Related GovWin IQ content: Tracked Opportunities, Bid Notifications and Lead Alerts
  • Primary and secondary offerings
  • Vertical classification

GovWin IQ members can access leads simply by filtering on Lead Alerts when generating opportunity searches. An icon with an L will distinguish leads from tracked opportunities and bid notifications.

It is recommended that you set up a save search to receive new leads daily or weekly. Please see your member advisor if you have any questions or would like assistance in navigating searches. 

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

Next Step: FY 2016 Budget to Be Hashed Out in Conference

The House and Senate both passed versions of a FY 2016 budget last week prior to their two week recess.   The next step is to iron out their differences in conference and develop a budget resolution, which is supposed to be passed by April 15th, but rarely meets that deadline.  

Both the House and Senate versions of the budget are markedly more conservative than the budget request put forth by the president in February.    The president’s budget provides an additional $37B for domestic discretionary investment above Budget Control Act spending levels in FY 2016, and $178B more than current law over 10 years.  The House and Senate versions maintain current cuts to domestic programs under the Budget Control Act.  The House version proposes cutting non-defense discretionary spending by an additional $759 billion over 10 years, while the Senate version proposes $236B in cuts over the same time period.

 

Both House and Senate proposals would provide $96B in total war funding in FY 2016, through the Overseas Contingency Operations fund. The Senate budget cuts $5.1T in spending over the next decade, while the House budget cuts $5.5T over the same time period.

 

The president’s budget request invests $478B over six years to create jobs in surface transportation repairs and includes $146B in FY 2016 for expansion of R&D tax credit to grow manufacturing and create jobs.  Neither the House nor Senate proposals contain new funding for job creation.

 

The president’s budget shows  a deficit of $474B in FY 2016, but plans to achieve $1.8T in total deficit reduction over 10 years by increasing both spending and revenues.  The Senate budget proposal runs a deficit of $343B next fiscal year and decreases spending $5.1T over 10 years.  This proposal balances the budget in 10 years by cutting spending. The House version decreases spending by $5.5T over 10 years, balancing the budget in less than 10 years.

 

The president’s budget exceeds sequestration caps for defense and non-defense spending in FY 2016 by over $70B. It proposes eliminating sequestration and spending $371B above sequester levels over 10 years.  The House proposal adds $90B in war funding to prevent sequestration from affecting the military budget and proposes cutting non-defense discretionary spending by $759B below sequester levels over 10 years.  The Senate proposal also adds to war funding in order to prevent sequestration from affecting the military budget and proposes cutting non-defense discretionary spending by $236B below sequester levels over 10 years.  The president has indicated that he will not sign a budget bill that does not cancel sequestration cuts.

 

With the vast differences between the White House budget and those proposed by Congress, it’s likely to be a long budget and appropriations process to get to something that the president will sign.

 

 

FY 2016 Budget Analysis Points to Increase in Contractor-Addressable Federal Spending

Deltek's new report, FY 2016 Federal Budget Request:  Challenges and Opportunities, indicates growth in federal contractor-addressable spending from $638 billion in FY 2015 to $660 billion in FY 2016.  

The FY 2016 $1.2 trillion discretionary budget request provides new, higher discretionary caps designed to replace sequestration limits set in the Budget Control Act. If passed as-is this budget proposal would offer some reversal of previous spending restrictions and infuse additional funds for both defense and civilian agencies.  As a result, the budget reflects FY 2015-2016 increases for nearly every major agency.

The budget request reintroduces the administration’s strategic priorities which include infrastructure, national defense, education, research and development, homeland security, public health (including veteran care), cybersecurity and cross-government customer services.

The largest projected increase is seen in the area of equipment with a planned increase of 24% from FY 2015 to FY 2016, from $32B to $49B for contractor-addressable spending.  The equipment category encompasses purchases of durable assets that normally may be expected to have a period of service of a year or more after being put into use such as transportation equipment; machinery; construction equipment; furniture and fixtures; tools and implements, instruments and apparatus; and information technology hardware.  This category excludes aerospace and defense equipment.

The aerospace and defense (A&D) market segment is expected to grow 5.8% over FY 2015 to $137B in contractor-addressable spending in FY 2016.  The A&D segment includes full-scale development, production, and modifications of durable assets related to the aerospace and defense industries.  The slight growth of A&D forecast for FY 2016 in the Navy and Air Force reflects a shift in U.S. defense strategy away from U.S. ground forces and toward naval and air power.  Growth among civilian agencies is highest at Homeland Security/CBP, Justice/FBI, Commerce/NOAA, and NASA.

Deltek’s analysis shows a nearly 3% increase from FY 2015 to FY 2016 in the contractor addressable portion of the federal information technology budget, growing from $101B to $104B.  The IT budget shows a continued shift of dollars from Development, Modernization, and Enhancement (DME) to Operations & Maintenance (O&M).  The budget also proposes $450M for initiatives such as Cross-Agency Priority (CAP) goals (e.g. shared services, strategic sourcing), funding for U.S. Digital Service teams at 25 agencies, and PortfolioStat.  It also includes $14B for cybersecurity, including Continuous Diagnostics and Mitigation (CDM) and CyberStat program expansion. 

Although intact passage of the FY 2016 budget request is unlikely, it gives a glimpse at administrative and agency priorities which will remain in place even if requested funding levels are not attained during the appropriations process.  Click here for more information on Deltek’s FY 2016 Federal Budget Request:  Challenges and Opportunities report.

 

DISA FY 2016 IT Budget Snapshot

Last week’s post took a look at Defense Working Capital Fund dollars that the Defense Information Systems Agency (DISA) anticipates Defense customers will spend with it in Fiscal Year 2016. This week’s post examines the formal portions of the information technology budget that DISA anticipates it will have in FY 2016, including funding it has requested for operations and maintenance, procurement, and research, development, modernization, and enhancement. The programs on which DISA forecasts spending the most under each category in FY 2016 will also be examined.

For its total IT budget in FY 2016, DISA has requested $3 billion.  This funding breaks out as follows:

Not surprisingly, the highest number of forecast dollars can be found in DISA’s Revolving and Management Funds account.  This account is where Defense Working Capital Fund spending is located, which is why it was the focus of last week’s post.  This week’s focus is on spending in the other three categories, beginning with operations and maintenance.

Breaking down O&M, we can see that not all of the programs receiving O&M funding are “programs,” per se. The White House Communications Agency (WHCA), for example, is part of the DISA organization.  The Defense Information Systems Network (DISN) is where much work related to Joint Information Environment is taking place, primarily, but not exclusively, under the GIG Services Management –Operations (GSM-O) and GIG Services Management – Engineering, Transition, and Implementation (GSM-ETI) contracts.  Spending on DoD mobility programs comes in at the far right of the spectrum, with $23 million in spending anticipated.

Moving to procurement, we see that new dollars for tech refreshment and other acquisitions are going into the DISN, SATCOM, and other transport-network related programs.  DISN investments focus primarily on the procurement of network switching (MPLS) and optical network equipment related to engineering the JIE.

DISA anticipates spending $0 on DoD mobility procurement in FY 2016.

This brings us to RDT&E funding, of which DISA has requested very little. There are no surprises here. The Joint Interoperability Test Command (JITC) receives most of the funding in this category. Some funding here goes to the DoD Mobility program for “tech insertion and the deployment of two Device Mobile Classified Capability (DMCC) gateways OCONUS which will include Top Secret (TS) and Secret capabilities in the Pacific and Southwest Asia.” Funding for the DISN will focus on the purchasing and testing of “optical and IP routers, switches, and Communications Security equipment” related to the upgrading of DISA’s optical network.

In conclusion, this snapshot of the FY 2016 DISA budget shows that engineering the DISN to provide the backbone for the Joint Information Environment will remain DISA’s highest priority in FY 2016, with funding spread out in all categories of IT spending – O&M, Procurement, and RDT&E.  DISA’s FY 2016 spending will remain heavy on communications and network equipment, with DISA personnel and service contractors already in place providing the support required to install and configure the equipment for the agency.

 

Obama’s proposed budget will benefit high-dollar transit projects

President Obama recently released his proposed budget for transportation infrastructure upgrades. The six-year, $478 billion infrastructure plan would provide funding for public works projects across the country. If the budget passes, it will increase funding for transit by 75 percent as well as create numerous construction jobs.
 
About half of the proposed budget will be funded by a new one-time tax imposed on American companies that have earnings overseas. The government estimates $238 billion would be raised from this tax – about half the proposed budget. The rest of the budget would be funded by federal tax on gasoline and other revenue sources. While there is bi-partisan agreement for transportation upgrades across the country, the proposed tax may face opposition in the Republican-led Congress.
 
Architecture, engineering, and construction companies would greatly benefit from the increase in projects should this tax go through, as $5 billion per year is set aside for fixing aging bridges and roads. The biggest boost in funding was seen in transit, with $123 billion over six years. This funding will benefit state and local entities looking to update rail, subway, and other transit elements.
 
For example, the state of California was allocated $1 billion in the proposed budget for transportation and construction projects; $800 million will be set aside for transit projects. This will greatly benefit transit projects in progress throughout the state, including Los Angeles’ Purple Line, expanding the Bay Area Rapid Transit system, and San Diego’s light rail project.
 
The boost in funding for transportation and construction will provide ample opportunities for companies to bid on high-dollar projects. Once entities are granted federal funding, vendors should keep an eye on these projects that will likely result in multi-year contracts. Also, most of these projects have multiple components and agencies may release solicitations in phases, resulting in more opportunities to bid and win contracts.
 
You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

A Look at DISA’s FY 2016 Information Technology Budget

The Defense Information Systems Agency (DISA) is playing an increasingly important role in Defense IT, a role that is expected to grow with maturation of the Joint Information Environment (JIE).  Funding for DISA’s programs garners a lot of attention, therefore, as vendors seek to understand where contract dollars in the agency’s IT budget may be going and which Defense organizations are buying DISA’s services.  Today’s post takes a look at the broad outlines of DISA’s proposed budget for the upcoming fiscal year and breaks down some salient points vendors need to know.

DISA’s IT Budget in Context

Where does DISA’s IT budget fit into the broader Department of Defense IT budget request for FY 2016?  The chart below shows the Defense-Wide IT budget for fiscal years 2014 through 2016 alongside DISA’s IT budget for those same years.


As a reminder, the big drop in DISA’s FY 2015 IT budget was caused by a change in the way the DoD CIO calculates the Defense Working Capital Fund.  For FY 2015, funding is now identified in the ‘senders’ accounts (i.e., Defense customers) rather than the investment owner's (i.e., DISA’s) account. 

The FY 2015 calculation change aside, DISA’s proposed IT budget for FY 2016 shows a continuing decline despite the fact that most of the DoD is relying more on the agency for its services.  Overall, DISA’s IT budget is expected to decline from an estimated $3.19B in FY 2015 to $3B in FY 2016, a drop of $190M, or just under 6%.

New Orders from Defense Customers – Computing Services

Moving to the specific services that DISA provides, the chart below shows the orders for DISA’s computing services that Defense customers have placed (or are expected to place, as the case may be) from FY 2014 to FY 2016.


The computing services DISA supplies include Core Data Center services, DoD Enterprise Email, DoD Enterprise Portal Service, GIG Content Delivery Service, and the agency’s milCloud infrastructure service.  The data for these services reveals a few interesting trends.

First, both the Army and Air Force continue to use DISA-provided computing services more than the Navy.  DISA, however, expects orders from Air Force customers to drop in FY 2016, while those from Army customers will grow.  The implications of this are clear for Defense contractors – in FY 2016 the Army will spend less money on contracted efforts for computing services outside of DISA.  Conversely, the Air Force may be a better place to search for specific opportunities in this area.

Second, Defense-Wide appropriations are expected to nearly double, suggesting that the Defense Agencies are continuing to embrace the enterprise services provided by DISA under the JIE concept.

Third, Navy new orders are expected to decline slightly, from $44M in FY 2015 to $42M in 2016.  The Navy’s ongoing flat/declining use of DISA services continues to suggest the service will spend its computing services contract dollars with its big CANES and NGEN prime contractors.  The Marine Corps’ new orders are expected to grow slightly, up from $28M in FY 2015 to $33M in FY 2016.

New Orders from Defense Customers – Telecom/Enterprise Acquisition Services

Turning now to transport and enterprise acquisition services, which DISA reports in combination, the new order trends are similar to those in computing services.


Nearly all parts of DoD are expected to spend more with DISA in FY 2016 than they did in FY 2015.  Only the Navy ($571M in FY 2015 dropping to $569M in FY 2016) and Marines ($111M in FY 2015 dropping to $110M in FY 2016) show declines.  Dropping Navy/USMC spending is consistent with statements by officials from both services that they will continue to rely more heavily on their own networks rather than DISA’s for transport and communications services.

In conclusion, in FY 2016 DISA will continue to play the central role in the DoD’s new Joint Information Environment, with spending on its services by the MILDEPS dependent on the level of each department’s involvement in standing up the JIE.  Spending by the Army, Air Force, and Defense Agencies will continue to be the strongest, while spending by the Navy and Marine Corps continues to lag.

 

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