Deltek Federal IT Market Forecast Projects Spending Trends from 2016 to 2021

Published: July 06, 2016

Information Technology

Deltek predicts the federal information technology market will remain flat over the next few years as agencies look to lower costs, increase efficiencies and juggle priorities.

Although the Bipartisan Budget Act of 2015 provided a small funding infusion, agencies continue to face budget pressures, numerous technology and management mandates, and an impending administration change. Agencies are challenged by the need to meet near-term demands while planning a long-term strategy, modernize IT environments and streamline contracting and management processes, all within an often ambiguous environment.

Deltek forecasts federal spending on contractor-supplied information technology products and services will decline slightly from $99.8 billion in FY 2016 to $98.3 billion in FY 2021 at a compound annual growth rate (CAGR) of -0.3%. (See chart below.)

Key themes emerging from Deltek's research include:

  • Priority Areas Unchanged – Growth opportunities remain in key strategic areas such as: cloud computing, data center optimization, cybersecurity, big data and infrastructure modernization.
  • Election Impact –The new administration may reset some IT policy, but policies will likely carry the same themes under different branding.
  • Contract Streamlining – Consolidating contracting onto fewer contracts will heighten competition.
  • Legacy System Modernization – The IT Modernization Fund could bring significant opportunities to contractors, provided that agencies can drive the tangible cost savings required to reimburse the fund.

Deltek's Federal Information Technology Market, 2016-2021 takes a 5-year strategic view of the trends, drivers and inhibitors impacting federal information technology procurement. The scope of analysis includes traditional IT as well as embedded IT spending within non-IT programs. The report explores market drivers, strategic programs, key initiatives and forecasts federal information technology spending over the next five years. The report provides growth projections for vendor-supplied products and services as well as identifies the unique issues driving individual market segments and agencies.