GovWin
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.

 

Funding port authorities could create spending chain reaction

On January 29, the American Association of Port Authorities (AAPA) held an event in Tampa Bay, Fla., on shifting international trade routes. One major topic of discussion was the need for more federal funding for the nation’s ports. The infrastructure at ports is reliant on funding to assist with improvements including security, equipment and general components such as roads and entrance facilities.

While the majority of port traffic is goods imported into the United States, exports rely on a long line of infrastructure to move goods to those ports. Approximately 78 percent of all U.S.-made good are shipped via container. If port authorities receive more funding from the federal level, spending will inevitably increase at the local level. Farms, local factories and other consumer industries rely on ports to ship goods overseas, and if the infrastructure at ports around the country were capable of handling more goods and offering quicker shipping, industry may look to increase production.

This chain reaction is a two-way street. Improvements to ports would be felt throughout the architecture, engineering and construction (AEC) industry, as local roads, bridges and other infrastructure will need to be capable of handling large trucks carrying shipping containers. Certain regions have roads designed for trucks, such as the New Jersey Turnpike, which provides access to the third largest port in the U.S. (Port of New York and New Jersey/Port Newark). In the other direction, transportation infrastructure across the country (not just in areas near one of the 149 major U.S. ports) is in dire need of improvements. If state transportation departments can move forward with improvements via federal funds, there will be greater access and safer routes to ports.

Keep an eye out for future analysis on specific port authorities and construction spending as Deltek continues to expand reporting on the state and local AEC market. The graph below highlights construction expenditures within the Port Authority of New York and New Jersey (PANYNJ). While general construction topped $1.1 billion in 2014, spending has remained generally flat within the PANYNJ. Federal funding could provide the much-needed AEC boost to the nation’s ports.

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.

 

FY 2016 Budget Request – Information Technology Highlights

Information Technology (IT) budgets are UP for fiscal year (FY) 2016 nearly across the board for major federal departments. The Obama Administration released its FY 2016 Budget request Monday morning, and around 6 p.m. the Office of Management and Budget (OMB) posted details on the Information Technology budget proposal, revealing a return to year-over-year budget increases for both the Defense and Civilian top-line numbers and net increases for most Executive Branch departments and agencies.

In a previous entry we looked at the overall FY 2016 discretionary budget highlights across the top agencies. Here, we will focus on IT.

According to the IT budget request for FY 2016, the overall IT budget for Executive Branch departments and agencies comes in at $86.3B, up 2.3% from the FY 2015 enacted level and 5.5% higher than the $81.7B spent in FY 2014. However, factoring out grants to state and local governments, the total IT budget for FY 2016 comes in at just over $79B, an increase of 4% from FY 2015, which was effectively flat from FY 2014. (See table below.)


 

AGENCY HIGHLIGHTS

In addition to the many budget increases for the next fiscal year, many agencies are also allocating greater funds to Development, Modernization, Enhancement (DME) efforts over Operations and Maintenance (O&M). These and other funding observations are included in the following agency highlights.

Department of Defense

The DoD is allocated a total of $37.3B in IT funds for FY 2016, a 3% increase over the FY 2015 enacted level of $36.3B. The total funds are split between classified and non-classified areas, $6.6B and $30.7B respectively. If enacted, this would mean a 2% increase in classified DOD IT and a 9% increase in non-classified DOD IT.

OMB released only top-line IT budget numbers for DoD and promised detailed updates in early March. This is fairly common practice each budget cycle, but shrouds DoD IT spending longer than any other department. Until then, we pursued what IT-related spending information could be gleaned from other DoD budget documentation.


Air Force

  • $1.8B in Procurement funds for Electronics and Telecom Equipment, an increase of more than $400M (30%) over FY 2015
  • $2.6B in Space Procurement funding, which budget materials note that FY 2016 marks the first year that such procurement are broken out.
  • $2.4B in Science and Technology RDT&E funds, an increase of $96M from FY 2015
  • $287M in Procurement funds for the Strategic Command And Control program, up from $140M (+105%) in FY 2015
  • $103.7M for AFNET, up 15% from the $90.5M level in FY 2015
  • $31.4M in Procurement funds for “General Information Technology,” down from $43M in FY 2015.
  • $9.6M for Integrated Strategic Planning & Analysis Network (ISPAN), an increase of $500K (6%) from the FY 2015 level

Army

  • $3.5B in Procurement funding for Communications and Electronics Equipment
  • $783M in O&M funding for upgrades to the Warfighter Information Network-Tactical (WIN-T)
  • $260M in Procurement funding for the Distributed Common Ground System-Army
  • $152.2M in Procurement funding for Automated Data Processing Equipment
  • $103M in Procurement funding for the Installation Information Infrastructure Modernization (IMOD) Program
  • $72.2M in Procurement funding for the Communications Security Program
  • $43.5M in Research, Development, Test, and Evaluation funding related to WIN-T for developing Network Operations software to meet the Army Network Convergence goals
  • $22M in Procurement funding for the Unified Command Suite

Navy

  • $17.9B in R&D funding, up nearly 12% from the FY 2015 level of $16.0B
  • $55M in R&D for Cyber (ORT/TFCA only), up from $3M in FY 2015
  • $2.4B in Navy Procurement funds for Communications and Electronics Equipment, up $158M (7%) from FY 2015
  • $279M in Procurement funds for CANES, down from $336M in FY 2015
  • $31.8M For the Distributed Common Ground System-Navy (DCGS-N), up from $23.7M in FY 2015
  • $135.7M for the Information Systems Security Program (ISSP), a 26% increase over the FY 2015 level of $108M
  • $740M in Marine Corps Procurement funds for Communications and Electronics Equipment, including $67M to support NGEN. The total is up from $570M in FY 2015

Defense-Wide

  • $12.3B in funding for the Science and Technology program for future technologies
  • $7.4B in funding for C4I systems
  • $7.1B for space-based systems
  • $800M for the MQ-9 Reaper Unmanned Aircraft System
  • $84.4M in Procurement funding for equipment for the Joint Information Environment, a 539% increase over the $13.3M invested in FY 2015
  • $57.7M in Research, Development, Test, and Evaluation funding for SOF Advanced Technology Development
  • $11.7M in Research, Development, Test, and Evaluation funding for Insider Threat detection

Agriculture

The USDA’s FY 2016 budget request for IT is $1.95B, 1.56% higher than the estimated level of $1.92B in Fiscal Year 2015.

Funding highlights include: 

  • $431M in the USDA’s Working Capital Fund, with money in this account used to finance central services in the USDA, including automated data processing systems for payroll, personnel, and related services; telecommunications services; and information technology systems
  • $66.3M in funding for information technology related to Farm Service Agency IT programs, including work related to the Modernize and Innovate the Delivery of Agricultural Systems (MIDAS) program
  • $29.5M in DME funding for the Natural Resources Conservation Service’s Conservation Delivery Streamline Initiative (CDSI)
  • $29M in DME funding for the Office of the Chief Information Officer’s Optimized Computing Environment (OCE)
  • $28M for the USDA’s cyber security requirements and programs
  • $7.6M to fund a USDA Digital Services team that will focus on transforming the department's digital services in line with the White House’s Smarter IT Delivery initiative
  • $4.25M for information technology infrastructure at the Animal Plant and Health Inspection Service
  • $3M to implement the Digital Accountability and Transparency Act, including changes in business processes, work force, and/or information technology assets
  • $1M for the Common Computing Environment, a shared information technology platform for the Farm Service Agency, the Natural Resources Conservation Service, and Rural Development

Commerce

The president’s budget request provides $2333.2M in funding for the Commerce Department’s information technology, an 8% increase over FY 2015 enacted levels. 62% of FY 2016 funds are dedicated to operations and maintenance, a 3% increase over the FY 2015 enacted levels. Funding to support development, modernization, and enhancement efforts totals over $880M for FY 2016, rising above the amount enacted in FY 2015 by 38%.

Funding highlights include:

  • The top ten investments by requested funding for FY 2016 combine to make up just over 57% of Commerce’s entire IT budget.
  • Includes $339.7M in new investments for FY 2016.
  • Funding for upgrades is set to receive $5.2M for FY 2016, level with the enacted amounts for FY 2015.
  • Mission delivery and management support efforts request an additional $84M, bringing the total for FY 2016 to $1,415.5M and marking a 9% increase over the enacted level from FY 2015.
  • Commerce aims to provide $798.3M in funding for infrastructure, office automation, and telecommunications, an increase of 8% over levels from FY 2015.
  • Increasing 27% over the enacted level for FY 2015, Commerce has identified $116.2M for efforts related to enterprise architecture, capital planning, and CIO functions.

Energy

The president’s budget request provides $1,469.1M in funding for the Energy Department’s information technology, a 1% drop from FY 2015 enacted levels. 92% of FY 2016 funds are dedicated to operations and maintenance, a 1% increase over the FY 2015 enacted levels. Funding to support development, modernization, and enhancement efforts decline below the amount enacted in FY 2015 by $25.M, marking a drop of 18%.

Funding highlights include:

  • With details for over 700 investments for FY 2016, the top ten investments by requested funding combine to make up around 11% of Energy’s IT budget.
  • Includes $72.7M in new investments for FY 2016.
  • Consolidation activities are set to receive $43.6M.
  • Funding for upgrades is set to receive $3.5M for FY 2016, level with the enacted amounts for FY 2015.
  • Energy is targeting $663.8M in funds for mission delivery and management support, marking a drop of 2% from FY 2015.
  • Maintaining the enacted funding level from FY 2015, Energy aims to provide $747.6M for infrastructure, office automation, and telecommunications.
  • Increasing 7% over the level for FY 2015, Energy is looking to provide $73.5M for efforts related to enterprise architecture, capital planning, and CIO functions.

Health and Human Services

The president’s budget request provides $11.4B in total IT funding to HHS, a 10% decrease over FY 2015 enacted levels. Grants account for $6.4B of the total IT budget.  HHS’ proposed IT budget without grants totals $4.9B which is a 2% decrease over FY 2015.

Funding highlights include (excludes grants):

  • DME accounts for $1.1B or 22% of the total IT budget, a 14% decrease from FY 2015 enacted levels
  • 545 total investments of which the top 10 represent 37% of the total IT budget at $1.8B
  • $149M slated for cloud investments, a 5.5% decrease from FY 2015
  • Notable changes in agency IT budgets include CMS $2.3B down 3%, NIH $781M down 2.4%, FDA $584 up 1%, and CDC $324M down 6.5%
  • Notable program changes include CMS IT Infrastructure – Ongoing down $95M, CMS Federally Facilitated Marketplace (FFM)down $60M, and CMS Beneficiary e-Services up $22M

Homeland Security

The budget request provides $6.2B for IT investments at DHS for FY 2016, a 4% increase over the FY 2015 enacted level of $5.9B.

Funding highlights include:

  • DME accounts for $1.0B or 16% of the total IT budget, a $76M increase from FY 2015 enacted levels
  • $150.3M in DME funds for USCIS Transformation, which makes up 83% of the total FY 2016 funding of $180.9M
  • $463.9M for the National Cybersecurity & Protection System (NCPS), including $95.8M in DME funds, 21% of the total
  • $102.7M for the Continuous Diagnostics & Mitigation (CDM) program, of which $91.4, or 89%, are DME funds
  • $88.5M in DME funds for the CBP Non-Intrusive Inspection (NII) Systems Program, which represents 42% of the overall $209.3M for the year
  • $80.3M in funds for the NPPD Next Generation Networks Priority Services (NGN-PS), 100% of which is DME

Interior

The president’s budget request provides $1,098.5M in funding for the Department of the Interior’s information technology, a drop of less than one percent from FY 2015 enacted levels. 92% of FY 2016 funds provide operations and maintenance, a 2% increase over the FY 2015 enacted levels to $1014.2M. At less than $85M for FY 2016, support for development, modernization, and enhancement efforts drops 20% below the amount enacted in FY 2015.

Funding highlights include:

  • The top five investments by requested funding for FY 2016 combine to make up over 61% of Interior’s entire IT budget.
  • New investments receive $5.6M for FY 2016.
  • Requesting $402.1M for mission delivery and management support efforts, Interior looks to slightly raise the funding for these investments bumping the total up by 1% over the FY 2015 levels.
  • Interior’s request of $657.6M for investments targeting infrastructure, office automation, and telecommunications marks a 1% decrease from FY 2015 enacted levels.
  • Dropping 13% from the level enacted for FY 2015, Interior has identified $38.3M for investments related to enterprise architecture, capital planning, and CIO functions.

NASA

The president’s budget request provides $1,390.4M in funding for NASA’s information technology, a 2% decrease from FY 2015 enacted levels. 95% of FY 2016 funds are dedicated to operations and maintenance, maintaining the FY 2015 enacted levels at $1,323.1M. Funding to support development, modernization, and enhancement efforts takes a hit for FY 2016, dropping 27% below the amount enacted in FY 2015 to $67.3M.

Funding highlights include:

  • The top five investments by requested funding for FY 2016 combine to make up nearly 59% of NASA’s entire IT budget.
  • NASA is looking to maintain its spending for mission delivery and management support, requesting $942.8M for FY2016.
  • $445.2M for Infrastructure, office automation, and telecommunications, a 2% drop from FY 2015 levels.
  • Maintaining the funding level enacted for FY 2015, FY 2016 would see $2.5M for efforts related to enterprise architecture, capital planning, and CIO functions.

Justice

The president’s budget request provides $2732.3M in funding for the Justice Department’s information technology, a 4% increase over FY 2015 enacted levels. Topping $2,250M for FY 2016, 83% of these funds are dedicated to operations and maintenance, marking a 5% increase over the FY 2015 enacted levels. At $476.1M for FY 2016, funding to support development, modernization, and enhancement efforts stay fairly level with the amount enacted in FY 2015, dropping by only 1%.

Funding highlights include:

  • The top ten investments by requested funding for FY 2016 combine to make up nearly 37% of Justice’s entire IT budget.
  • Includes $110.6M in new investments for FY 2016.
  • $478.6M is requested for system upgrades, an increase of around $5.5M over enacted levels for FY 2015.
  • Consolidation activities are set to receive $237.3M.
  • Dropping by 2% from the enacted FY 2015 levels, the request for mission delivery and management support activities totals $1,138.0M for FY 2016.
  • Justice aims to provide $1,413.8M in FY 2016 for infrastructure, office automation, and telecommunications, marking an increase of 10% from the level enacted for FY 2015.
  • Rising 23% above the FY 2015 level, Justice has identified $152.2M for efforts related to enterprise architecture, capital planning, and CIO functions.

Social Security Administration

SSA sees a 7% budget increase for FY 2016, growing to $1.7B from $1.6B in FY 2015.

Funding highlights include

  • At SSA DME accounts $705M or 42% of the total FY 2016 IT budget
  • $278.4M is allocated for Non-Major Infrastructure IT investments, of which 275.5M (99%) is DME
  • $55.0M in DME funds for the Disability Case Processing System (DCPS)      , which accounts for 92% of the total $60M budget
  • $68.5M slated for Non-Major IT Security Initiatives, 62% of which ($42.7M) is new development funds
  • $29.1M in new DME funding for the Intelligent Disability program, which makes up 84% of the $34.8M total

State

The State department receives $1.6B in IT funds for FY 2016, up 15% with an increase of $218M from FY 2015.

Funding highlights include

  • $140.4M of total agency DME funds account for 9% of the total FY 2016 IT budget and increases $3M from FY 2015
  • $28.5M for Consular Systems Modernization, of which $18.8M (66%) is DME funds
  • $13.3 in funding for the Architecture Services program, 100%        of which is DME
  • $11.0M in DME funding for Bureau IT Support, which accounts for 5% of the overall $230.3M allocated for FY 2016
  • $10.9M for DME efforts around the Global Foreign Affairs Compensation System (GFACS), or 35% of the total $30.8M in funds
  • $43.3M in total funding for the Integrated Personnel Management System (IPMS), $10.1M (23%) of which is DME
  • $31.6M in total funding for the Earnings Redesign initiative, $27.6M (88%) of which is DME

Transportation

The DOT’s FY 2016 budget request for IT is $3.3B, 6.4% higher than the estimated level of $3.1B in Fiscal Year 2015.

Funding highlights include:

  • $245M in DME funding for the FAA’s Terminal Automation Modernization and Replacement Program (TAMR-P)
  • $238M in DME funding for the FAA’s Data Communications NextGen Support (DataComm) program
  • $215M for the FAA’s Automatic Dependent Surveillance-Broadcast (ADS-B) system
  • $200M for the FAA’s Facilities & Equipment account to finance major capital investments in FAA power systems, air route traffic control centers, air traffic control towers, terminal radar approach control facilities, and navigation and landing equipment
  • $3M to implement the Digital Accountability and Transparency Act, including changes in business processes, work force, and/or information technology assets
  • $60M for NextGen operations planning activities at the FAA
  • $42.6M in funding through September 30, 2018 for information management related to Motor Carrier Safety Operations and Programs
  • $20M for FMCSA’s commercial vehicle information systems and networks deployment program and Information Technology Deployment (ITD) program
  • $9M to fund a DOT Digital Services team that will focus on transforming the department's digital services in line with the White House’s Smarter IT Delivery initiative
  • $8M for cyber security initiatives, including necessary upgrades to the DOT’s wide area network and information technology infrastructure
  • $4M for operation and maintenance of the FTA’s National Transit Database

Treasury

The president’s budget request provides $4.5B in total IT funding to Treasury, a 19% increase over FY 2015 enacted levels.    

Funding highlights include:

  • DME accounts for $933M or 21% of the total IT budget, a 4% increase from FY 2015 enacted levels
  • 280 total investments of which the top 10 represent 56% of the total IT budget at $2.5B
  • $330M slated for cloud investments, a 9.6% increase from FY 2015
  • Notable changes in agency IT budgets include IRS $3.2B up 30%, Fiscal Service $697 down 1%, and Departmental Offices $255M down 5%
  • Notable program changes include IRS Main Frames and Servers Services and Support (MSSS) up $219M, IRS Enterprise Services - PAC 9U up $204M, and IRS Applications Development Program Support (ADPS) up $60M

Veterans Affairs

The president’s budget request provides $4.4B in total IT funding to VA, a 5% increase over FY 2015 enacted levels.

Funding highlights include:

  • DME accounts for $639M or 15% of the total IT budget, a 11% decrease from FY 2015 enacted levels
  • 31 total investments of which the top 10 represent 92% of the total IT budget at $4B
  • $49M slated for cloud investments, a 32% decrease from FY 2015
  • Notable program changes include Benefits 21st Century Paperless Delivery of Veterans Benefits up $116M, Medical 21st Century Development Core down $81M, and Interagency 21st Century One Vet up $75M

We will be publishing our complete analysis of the FY 2016 budget request – including IT investments and initiatives – in the weeks to come.

Fellow GovWin Federal Industry Analysis (FIA) analysts Kyra Fussell, Deniece Peterson, Angela Petty and Alex Rossino contributed to this entry.

 

FY 2016 President’s Budget Request – GovWin FIA’s First Take

The White House released its FY 2016 Budget request today, perhaps the earliest annual budget release of the Obama Administration thus far. Several of my fellow GovWin Federal Industry Analysis (FIA) colleagues and I wasted no time in delving into this budget so that we could provide you with our first impressions of what we found noteworthy.

Similar to each presidential budget, the FY 2016 President’s Budget Request provides a blueprint for the administration’s policy and legislative agenda for the coming fiscal year and beyond. We reviewed the largest federal departments’ discretionary budgets to get a sense of direction and priorities for FY 2016, which begins October 1, 2015. Below is a summary table followed by key funding details and initiatives arranged by department.


Defense

DoD’s discretionary base budget request is up nearly 8% over FY 2015. The $534.3B in discretionary funding is $38.2B more than the FY 2015 enacted level.

Funding highlights include:

  • $126.53B for the Army (an increase of $7.B from the FY 2015 enacted level)
  • $161.0B for the Navy (an increase of $11.8B from the FY 2015 enacted level)
  • $152.9B for the Air Force (an increase of $16B from the FY 2015 enacted level)
  • $94.0B for Defense-Wide operations (an increase of $3.4B from the FY 2015 enacted level)
  • $51B in Oversees Contingency Operations (OCO) funding across all DoD (a decrease of $13.4B from the FY 2015 enacted level)
  • $209.9B for DoD operations and maintenance funding (an increase of $14.5B from the FY 2015 enacted level)
  • $107.7B for DoD procurement funding (an increase of $14.1B from the FY 2015 enacted level)
  • $69.8B in DoD RDT&E funding (an increase of $6.3B from the FY 2015 enacted level)
  • Invests $12.3B in DoD’s Science and Technology (S&T) Program, including $5.5B in Advanced Technology Development
  • Provides $7.4B for C4I systems
  • Includes $7.1B for DoD Space Investment Programs
  • Funds construction of the Joint Operations Center for U.S. Cyber Command at Fort Meade, Maryland
  • Funds ongoing investments in the DoD’s Joint Information Environment
  • Modestly increases the budget of the Defense Advanced Research Projects Agency from $2.9B to 3B
  • Allocates $32.3B for the Defense Health Program
  • Allocates $109.4M for communications upgrades at the new U.S. Strategic Air Command headquarters building

Agriculture

The president’s budget request includes $23.5B in discretionary appropriations for the Department of Agriculture, 1.25% below the enacted level of $23.8B in Fiscal Year 2015.

Funding highlights include:

  • $1B in financial assistance to rural businesses
  • $2.2B in community facility loans for rural areas
  • $6.4B for direct and guaranteed farm ownership and operating loans
  • $450M for competitive, peer-reviewed research for fundamental and applied agricultural sciences
  • $200M in funding for Watershed and Flood Preventions Operations
  • $206M to invest in the backlog of priority facility construction and renovation for the Agricultural Research Service
  • $60M to modernize the Headquarters South Building
  • $7.6M for a digital services team to improve the efficiency and effectiveness of USDA IT systems

Commerce

The president’s budget request provides $9.8B in base discretionary funding to Commerce, an 11% increase over FY 2015 enacted levels. These funds are intended to promote growth through trade, invest, and innovation as well as a data-driven economy.

Funding highlights include:

  • Provides funding to National Institute of Standards and Technology in support of advance in areas like cybersecurity and advanced manufacturing. Efforts to work with industry are called out in particular, such as implementing the Cybersecurity Framework of standards and best practices. Funding will also sustain work on initiatives like cybersecurity automation and the National Strategy for Trusted Identities in Cyberspace (NSTIC).
  • $1.5B to Census to support research, development, and implementation of the 2020 Census. The Census Bureau will also include planned increase for the Economic Census and advance initiatives to make data and resources publicly accessible.
  • Continues strong funding for National Oceanic and Atmospheric Administration, including $2B for next generation weather satellites, including $380M for the Polar Follow-On satellites. $147M in funding is also provided for the construction of an ocean survey vessel.
  • $1.1B for National Weather Service includes increases in funding for critical infrastructure.
  • Includes $3M to establish an in-house Idea Lab to pursue innovative approaches to achieve the agency’s strategic goals and objectives.
  • Requests $6M to build a digital services team for Department of Commerce dedicated to improving IT systems and services.
  • $497M for the International Trade Administration includes $20M to expand SelectUSA efforts to grow business investment in the United States.
  • Auctions 500MHz of federal spectrum, aiming to reduce the deficit by $40B over the next decade and provide greater commercial access to spectrum.

Energy

The president’s budget request provides $29.9B in base discretionary funding to Energy, a 10% increase over FY 2015 enacted levels. These funds are intended to support nuclear security, clean energy, environmental cleanup, climate change response, as well as science and innovation.

Funding highlights include:

  • $5B in funding supports transformational research and development for critical technology areas such as nuclear safety, grid modernization, solar and renewable energy, and energy efficiency.
  • $5.3B to support scientific research, especially in the physical sciences.
  • $12.6B for National Nuclear Security Administration, an 11% increase over FY 2015 enacted levels.
  • $5.8B for critical nuclear legacy cleanup responsibilities.
  • Expands efficiency initiatives introduced in FY 2015 to advance key priorities and improve project integration.

Health and Human Services

The president’s budget request provides $79.9B in base discretionary budget authority to HHS, a 0.3% decrease over FY 2015 enacted levels. 

Funding highlights include:

  • Supports the Affordable Care Act and operation of the Health Insurance Marketplace.
  • Provides $4.2B to serve 28.6 million patients at more than 9,000 health center sites in medically underserved communities. $2.7B of this amount is new mandatory funding.
  • Funds reform of health care delivery by finding better ways to deliver care, pay providers, and distribute information.
  • Promotes innovative medical research to maintain the nation’s leadership in the life sciences including research into Alzheimer’s disease.
  • Advances product development efforts to support procurement of next-generation medical countermeasures against chemical, biological, radiological, and nuclear threats with a $522M investment.
  • Accelerates progress in scientific and public health efforts to detect, prevent, and control illness and death related to antibiotic-resistant infections with funding of $993M.
  • Proposes targeted reforms to Medicare and Medicaid which are projected to save more than $400B over the next decade.
  • Provides the Indian Health Service with $5.1B, an increase of $461M over FY 2015 enacted levels, to expand health care services and construct clinics and sanitation facilities.
  • Includes $1.6B to bolster food safety activities.    
  • Promotes continued efforts to cut waste, fraud and abuse in Medicare and Medicaid including removing social security numbers from Medicare beneficiary ID cards.

Homeland Security **

DHS would receive $41.2B in base discretionary funding in the president’s budget request, a 7.9% increase over the FY 2015 $38.2B budget request level. DHS is currently operating under continuing resolution (CR) at the FY 2014 enacted budget level of $39.8B. This CR expires on 2/27 by which time Congress is expected to pass appropriations to cover the remainder of FY 2015.

Funding highlights include:

  • $3.7B for Aviation Security and Screening at the Transportation Security Administration (TSA) sustain aviation security and effectively align passenger screening resources based on risk. These risk-based security initiatives maximize security capabilities and expedite the screening process for low-risk travelers.
  • $132.3M for the Customs and Border Protection (CBP) Trusted Traveler Programs (TTP) to provide expedited travel for pre-approved, low-risk travelers through dedicated lanes and kiosks.
  • $101M for Radiological and Nuclear Detection Equipment for detecting and interdicting illicit radioactive or nuclear materials by the Domestic Nuclear Detection Office and other DHS components.
  • $85.3M for the CBP Non-Intrusive Inspection (NII) program for passive radiation scanning and X-ray/gamma-ray imaging of cargo and conveyances
  • $373.5M is provided to maintain necessary border security infrastructure and technology to improve CBP’s ability to detect and interdict illegal activity
  • $480M for network security, including the EINSTEIN3 Accelerated program to detect and prevent malicious traffic
  • $102.6M for the Continuous Diagnostics and Mitigation (CDM) program for hardware, software, and services that strengthen the operational network security
  • $1B to replace aging Coast Guard cutters, aircraft, electronic systems and shore infrastructure
  • An increase of $86.7M to enhance U.S. Secret Service capacity to protect senior leaders

Justice

The president’s budget request provides $28.7B in base discretionary funding to Justice, a 5% increase over FY 2015 enacted levels. These funds are intended to support core law enforcement needs, safe and secure prisons, and other Federal, State, Tribal and local programs.

Funding highlights include:

  • Strengthening investment in cybersecurity through over $200M in IT upgrades and tools to detect and deter cyber-attacks. Funds also support plans for a Federal Cyber Campus to co-locate critical civilian cybersecurity agencies.
  • Provides $97M to expand training and oversight for local law enforcement, increase the use of body worn cameras, and provide additional opportunities for reform through technical assistance and training.
  • $482M in funds to address the back log of immigration cases at the Executive Office of Immigration Review. These funds will support hiring judges and legal representation as well as expanding the Legal Orientation Program.
  • Efforts to combat violent extremism include $4M for research, $6M for model development, $2M for technical assistance, and $3M for projects to enhance collaboration between law enforcement, communities, and other stakeholders.
  • Credits applied to Justice’s discretionary budget authority for FY 2016 include $13.5B from the Crime Victims Fund (CVF) and $304M from the Assets Forfeiture Fund (AFF). Both of these figures are up from the FY 2015 enacted levels. The CVF is up 39% over FY 2015, while AFF is up 58% for the same period.

Transportation

The president’s budget request includes $14.3B in discretionary appropriations for the Department of Transportation, 3.5% less than the $13.8B enacted in Fiscal Year 2015.

Funding highlights include:

  • Creates a new Office of Safety Oversight to coordinate and improve safety efforts across all modes of transportation
  • Provides $956M in discretionary funding for modernization of the Next Generation Air Transportation System
  • Provides $478B in mandatory and discretionary funding over six years for a surface transportation reauthorization proposal, including:
    • $1.25B per year for the TIGER Grant program
    • $18B over six years for the President’s National Export Initiative
    • $23B for transit and passenger rail programs and $144B over six years to expand transit capital investment grants
    • $6B over six years to provide credit assistance for nationally or regionally significant transportation projects through the Transportation Infrastructure Finance and Innovation Act Program
  • Provides $29.4B in mandatory and discretionary funding over six years for a Critical Immediate Safety Investments Program to provide targeted infrastructure investments
  • Provides nearly $6B in mandatory and discretionary funding over six years for the National Highway Traffic Safety Administration
  • Invests $935M in mandatory and discretionary funding over six years for vehicle safety and innovation, including vehicle automation and vehicle-to-vehicle technologies

Treasury

The president’s budget request provides $12.8B in base discretionary budget authority to Treasury, a 4.9% increase over FY 2015 enacted levels.   

Funding highlights include:

  • Includes $2.9B for Treasury’s international assistance programs to promote economic growth, poverty reduction, action on climate change, and security through Multilateral Development Bank (MDB) investments in developing and emerging economies.
  • Funds increases in transparency and accountability in federal financial management and implements the Digital Transparency Act of 2014 (DATA Act). 
  • Proposes funding to transform Treasury’s digital services with the greatest impact to taxpayers and businesses so they are easier to use and more cost-effective to build and maintain.
  • Provides IRS with $12.3B in base discretionary resources, an increase of $1.3B from FY 2015, to restore taxpayer services to acceptable levels.  Funds are also provided to continue major IT projects, which aim to protect taxpayer information, modernize antiquated systems, continue development of a state-of-the-art online taxpayer experience. 

Veterans Affairs

The president’s budget request provides $70.2B in base discretionary budget authority to VA, a 7.8% increase over FY 2015 enacted levels. VA also received $15B in the Veteran Access, Choice, and Accountability Act of 2014.

Funding highlights include:

  • Continues the largest department-wide transformation in VA’s history through MyVA, an effort to reorient the department around the needs of veterans.
  • Improves veterans’ access to medical care by investing $60B.
  • Supports improvements in veterans’ mental health care, telehealth care, life-saving treatment for Hepatitis C, specialized care for women veterans, long-term care, and benefits for veterans’ caregivers.
  • Provides $1.4B for programs aimed at ending veteran homelessness in 2015.
  • Strengthens veterans benefit programs by proposing an increase of $85M to hire 770 new staff to improve timeliness of non-rating claims, reduce the inventory of veterans’ appeals, strengthen the fiduciary program and further enhance disability claims processing accuracy and efficiency through centralized mail and the national work queue.

FY 2016 Federal Information Technology Budget Request

As of publishing time, the Office of Management and Budget (OMB) had not yet published IT budget specifics, but topline numbers show a 2.5% increase for FY 2016. This puts the total IT request (including state and local grants and classified defense spending) at $86.4 billion compared to the FY 2015 estimate of $83.4B.

The administration’s priorities fall in line with many of the initiatives discussed in the FY 2015 request along with those launched by OMB and the Office of Federal Procurement Policy (OFPP).  Focus areas include:

  • $450 million to drive forward progress on cross-agency management priorities such as the U.S. Digital Service (USDS), PortfolioStat, Freeze the Footprint, and Open Data.
  • Providing funding to 25 agencies for the development of their own agency digital services teams.
  • Piloting new initiatives in IT acquisition that will increase digital acquisition capability within agencies, train agency personnel in digital IT acquisitions, and test innovative contracting models.
  • Increasing the use of Shared Services
  • Funding that will allow agencies to make progress in implementing the DATA Act and increase Federal spending transparency
  • Continue development of the government’s Category Management initiative to include:
    • Proposing legislation making it easier for vendors to bid on modestly-sized procurements and bringing more new companies into the Federal marketplace.
    • broadening the range of purchases that can be accomplished with minimal complexity and Government-unique requirements by requesting authority to raise the simplified acquisition threshold from $150,000 to $500,000.
    • Seeking new pilot authority to make it easier for agencies to set aside work for new small businesses and other firms with cutting edge/creative solutions that have limited experience selling to the federal government

Stay tuned to FIA as we will be publishing our complete analysis of the FY 2016 budget request in the coming weeks, where we will go into greater detail on the key initiatives, IT investments and contractor implications that will shape the federal IT marketplace for FY 2016.

Fellow GovWin Federal Industry Analysis (FIA) analysts Kyra Fussell, Deniece Peterson, Angela Petty and Alex Rossino contributed to this entry.

 

DHS Would Get a $400 Million Boost for the Rest of FY 2015 Under House Bill

While most federal departments received their final fiscal year (FY) 2015 appropriations in mid-December, the Department of Homeland Security (DHS) was put in a funding holding pattern by the last Congress. Now, the new 114th Congress is in session and the U.S. House of Representatives has moved forward on a funding bill for the department.

In December, Congress passed an FY 2015 omnibus that funded all federal departments through the rest of the fiscal year, ending on September 30, except for DHS, which was funded with a continuing resolution (CR) until February 27, 2015. 

Now, with the DHS CR set to expire in a few weeks, the House has approved a FY 2015 Homeland Security Appropriations bill which would fund DHS through September, provided the Senate can move forward on a comparable version and the two chambers can reconcile a final bill to send to the president by the deadline.

The House bill, H.R. 240, provides a total of $39.7 billion in discretionary funding, which is an increase of $400 million (+1%) over the FY 2014 enacted level of $39.3 billion, which itself was a billion dollars more than White House requested in the FY 2015 budget. If enacted, the $37.7 billion would constitute more than a 3.5% increase over what the president requested for this fiscal year.

The bill and the accompanying Explanatory Statement provide details into agency funding and some specific IT investments areas.

  • Office of the Chief Information Officer (OCIO) – $288.1 million, of which $189.1 million is multi-year money available through FY 2016. The $288.1 million is $31 million over the FY 2014 enacted level. An additional $1 million is provided for the DHS Data Framework initiative and an additional $500 thousand is provided for cyber remediation tools.
  • Cybersecurity – The bill includes a total of $753.2 million for cybersecurity operations in the National Programs and Protection Directorate (NPPD). An additional $164.5 million is provided for NPPD Communications and $271 million for infrastructure protection programs, for an aggregate total of $1.19 billion. Cybersecurity workforce funding of $25.9 million is provided for Global Cybersecurity Management, of which at least $15.8 million is for cybersecurity education.
  • Science and Technology – $1.1 billion, $116.3 million below the FY 2014 enacted level, but $32.1 million above the president’s request. This includes $973.9 million for Research, Development, Acquisition, and Operations.
  • Customs and Border Protection (CBP) – $10.7 billion, an increase of $118.7 million above the FY 2014 enacted level. Of this, a total of $808.2 million is provided for Automation Modernization efforts for TECS, Automated Commercial Environment (ACE), International Trade Data System (ITDS) and others. The bill slates $382.5 million for Border Security Fencing, Infrastructure, and Technology (BSFIT).
  • Immigration and Customs Enforcement (ICE) – $5.96 billion, an increase of $689.4 million over the FY 2014 enacted level. IT funding includes $3.5 million to support enhancements to the PATRIOT system for visa vetting
  • Transportation Security Administration (TSA) – $4.8 billion, a decrease of $94.3 million below the FY 2014 enacted level. Technology provisions include $334 million for Explosives Detection Systems (EDS) Procurement and Installation, of which $83.9 million is discretionary funds. The bill also includes $449 million for Transportation Security Support IT and $295 million for Screening Technology Maintenance.
  • Coast Guard – $10 billion, $159 million below the FY 2014 level but $439.5 million above the president’s request, including $2.5 million to restore cuts to USCG information technology programs.
  • Citizenship and Immigration Services (CIS) – $124.4 million in discretionary appropriations is provided for the E- Verify program.
  • Federal Emergency Management Agency (FEMA) – $934.4 million for Salaries and Expenses, down $12.6 million from the FY 2014 enacted level. The bill allows for $7 billion for disaster relief and $2.5 billion in first responder grants, including $1.5 billion for state and local grants; $680 million for Assistance to Firefighter Grants, and $350 million for Emergency Management Performance Grants.
  • Secret Service – $1.7 billion, an increase of $80.5 million above the fiscal year 2014 enacted level. This includes $21.5 million to begin preparation and training for presidential candidate nominee protection for the 2016 presidential election, including for protective vehicles and communications technology. It also includes $45,6 million for investments in Information Integration and Technology Transformation programs.

As anticipated, the House bill restricts the use of funds for controversial White House immigration measures. The House Appropriations Committee Report that accompanies the bill includes an amendment stipulating that no funds, resources, or fees provided to DHS may be used to implement the immigration policy changes that the president initiated last fall.

The ball is now in the hands of the Senate Appropriations Committee (SAC), which has just solidified and announced committee chairs after the leadership change resulting from last November’s election. The Homeland Security subcommittee will need to quickly move their bill forward from the last committee action last summer if they hope to make the February 17 deadline, so the clock is ticking.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about 
GovWin FIA. Follow me on Twitter @GovWinSlye.

 

Defense-Wide Appropriations in the 2015 Omnibus and an FY 2016 Look Ahead

Despite the fact that many folks are focused on the upcoming release of the President’s Budget Request for Fiscal Year 2016, there is value in continuing to delve into the Defense-Wide portion of the recently passed Omnibus budget for 2015. Eight months remain in FY 2015, a span of time over which a great deal can change, and in which a lot of money will be spent. This said, I’ll try to whet appetites for the coming fiscal year, by offering a few expectations for the Defense-Wide portion of the FY 2016 budget.

A High-Level Look at FY 2015

Deltek’s high-level look at the FY 2015 Omnibus revealed that total funding for DoD is set at $553.9 billion ($490.2 billion in base budget, $63.7 billion for Overseas Contingency Operations (OCO)). Of the base budget, funding for Defense-Wide programs equals $52.4 billion.  This total represents a slight drop from the funding received in FY 2014, but an increase from the funding levels requested in the President’s Budget for FY 2015. Digging into the funding by area in the base budget reveals relative stability in the three largest parts of the base budget – operations and maintenance, procurement, and Research, Development, Testing, and Evaluation.

Operations & Maintenance

Taking a step back now to O&M funding for FY 2015, one thing that caught my eye is a dramatic reduction in funding for acquisition workforce development from $213 million to $83 million.  The DoD is in the throes of reforming its IT acquisition practices, including an attempt to carry out smaller procurements consistent with an agile acquisition approach.  Having properly trained personnel is critical to the success of this endeavor.  So, cutting funding for workforce development implies that either Congress believes the DoD’s acquisition workforce is sufficiently trained for the demands placed upon it, or that the pace of Defense technology procurement will be dropping to the point that the current acquisition workforce will be able to handle it.  Does anyone in industry believe that either of these scenarios is realistic?

Most of the other items under O&M also suffered reductions.  Here are a few of the most significant:

  • Joint Chiefs of Staff - $440 million vs. $462 million requested
  • Special Operations Command - $4.55 billion vs. $4.76 billion requested. Almost $25 million of this cut comes to the budgets of prominent SOC IT programs, including $9 million less for C4IAS, $9.1 million less for HQ C4 SITEC, $4 million less for the SOF deployable nodes program, and $2.5 million less for SOF tactical communications.
  • Washington Headquarters Services - $592.5 million vs. $611 million requested
  • All non-Military Intelligence Programs, non-cyber IT programs had their funding cut by $46 million

There are also a couple of additions:

  • Defense Logistics Agency - $385.4 million vs. $381.5 million requested, including the addition of $12 million for DLA’s Procurement Technical Assistance program.
  • $10 million for insider threat detection enhancements.

Procurement

There aren’t many changes in procurement funding at the Defense Agencies as practically all are fully funded.  The one item worth noting is a $23.4 million investment in major IT equipment at the National Security Agency. The NSA had originally requested $3.4 million and was given an additional $20 million.

Research, Development, Test, and Evaluation

Moving now to RDT&E, there are a number of funding changes to list.  First, let’s examine the notable reductions:

  • Information and Communications Technology - $324.4 million vs. $334.4 million requested
  • Electronics Technology - $169.2 million vs. $179.2 million requested
  • SOF Technology Development - $36.7 million vs. $39.7 million requested
  • C3 Systems - $239.3 million vs. $243.3 million requested
  • Sensor Technology - $302.8 million vs. $312.8 million requested

Balancing these are a number of notable funding increases:

  • Defense Research Sciences - $332 million vs. $312 million requested
  • Combatting Terrorism Technology Support - $94.7 million vs. $69.7 million requested
  • Defense Rapid Innovation Program - $225 million for a brand new program
  • Network Centric Warfare Technology - $380.4 million vs. $367 requested
  • Defense Technology Analysis - $22.1 million vs. $12.1 requested

Lastly, funding for the Defense Health Agency contains a couple items of note.

  • First, funding for Base Operations and Communications received $1.83 billion vs. $1.7 billion requested. This funding includes $50 million apiece for Facilities Sustainment, Restoration, and Modernization of Air Force, Army, and Navy medical facilities. The DHA is undergoing a major IT infrastructure consolidation effort and much of this funding will go to continuing that work.
  • Second, the Integrated Electronic Health Program received $9.2 million, the amount requested in the President’s Budget, to continue the procurement process.
What to Expect for FY 2016

Given the stability in these portions of the budget over the last two years, what should industry expect for FY 2016?  Basically, more of the same.  When the Budget Control Act was passed in 2011 it set spending caps that bottomed out in FYs 2014 and 2015, respectively.  FY 2016 was projected to be the year when budget caps began creeping up once again.  By all indications, this expectation remains intact.  Both the White House and the Joint Chiefs of Staff have expressed expectations that the DoD’s base budget request will be as much as $60 billion higher in FY 2016 than it was in FY 2015.  Even if this total is an overestimate, chances seem good that Congress will approve a base Defense budget higher than the $490.2 billion approved for FY 2015.  In this case, the Defense-Wide portion of the DoD’s base budget can be expected to come in at levels consistent with recent years – so, around $52 billion total for O&M, Procurement, and RDT&E.

 

Army FY 2015 Omnibus Funding: Highlights and Observations

Just before the holidays Congress passed the “Consolidated and Further Continuing Appropriations Act for Fiscal Year 2015.”  Shortly thereafter, Federal Industry Analysis posted a quick analysis of the Defense portion of the bill that highlighted some of the legislation’s high-level funding plusses and minuses.  This post dives a little deeper into the Army portion of the FY 2015 Omnibus bill to unearth some additional details and outline some of Army’s IT spending priorities over what remains of the fiscal year.

Top Level Numbers

Recapping the Army top-level budget numbers from the earlier blog, we can see that the Service’s budget didn’t take as hard a hit as may have been expected.

 

Operations and Maintenance Funding

Receiving $1.2 billion less for Operations and Maintenance will hurt programs in progress.  This includes IT programs, the funding for which was cut by $71.7 million compared to the Army’s FY 2015 request in the President’s Budget.  A $5 million reduction in the non-Cyber IT programs run by the Army National Guard is also called out specifically in the bill.  Similarly, the budget for Army Service-Wide Communications will receive a haircut, dropping from a requested $1.62 billion to $1.61 billion.  The $100 million cut is made in the budget of the Integrated Personnel and Pay – Army (IPPS-A) program thanks to what Congress deemed an “excessive” amount requested compared to the actual requirement for IPPS-A.

The news in O&M is not all bad, however, as the Army’s Facilities, Sustainment, Restoration, and Modernization Budget receives a $400 million increase from $2 billion to $2.4 billion.  Some work centered on the installation of cyber-physical systems for energy management at Army facilities is likely to be funded from this budget line.

Procurement Funding

The addition of $400 million to the Army’s procurement budget will provide a boost for vendors chasing new business.  Most of the largest Army programs in procurement will be funded 100% in FY 2015, so anticipate that the next 3 fiscal quarters will be busy as Army contracting shops rush to push out acquisitions in a “shortened” year.  As the following list shows, however, the picture is not rosy for every program.

  • Aerial Common Sensor Program – $130 million vs. $185 million requested
  • Network and Mission Plan – $105.4 million vs. $114.2 million requested
  • WIN-T Ground Forces Tactical Network – $664 million vs. $763 million requested
  • Defense Enterprise Wideband SatCom Systems – $3.5 million vs. $5.4 million requested
  • IPPS-A – $17 million vs. $33 million requested
  • Joint Battle Command – Platform (JBC-P) – $88 million vs. $98 million requested
  • Total Communications and Electronics Equipment – $2.83 billion vs. $3.24 billion requested

Research, Development, Test, & Evaluation Funding

Lastly, RDT&E funding will be up slightly.  This is good news for some initiatives and programs, including the following:

  • Basic Research – $460 million vs. $424 million requested. This will benefit vendors who maintain research facilities and are part of research consortia.
  • Sensors and Electronic Survivability – $46.3 million vs. $33.5 million requested. The increase includes $7.7 million for cyber security training funding and $5 million for Force Protection Radar Development
  • Advanced Weapons Technology – $38.5 million vs. $28.5 million requested
  • High Performance Computing Modernization Program - $221.6 million vs. $181.2 million requested. FIA has been forecasting that HPC is an area where increased investment would be made.

And the not so good news for other programs:

  • Advanced Field Artillery Tactical Data System – $1.3 million vs. $22.4 requested.  The reduction of $21 is due in part to Increment II program delays.
  • Army Integrated Military Human Resources System – $68.5 million vs. $138.5 million requested
  • Technology Maturation Initiatives – $44.5 million vs. $74.7 million requested
  • Combined Arms Tactical Trainer (CATT) Core – $34.7 million vs. $42.4 million requested
  • Brigade Analysis, Integration, and Evaluation – $85.3 million vs. $105.3 million requested
  • Army Integrated Military Human Resources System (A-IMHRS) – $68.5 million vs. $138.5 million requested

 

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