Deltek’s Federal IT Market Forecast Projects Spending Trends from 2017 to 2022

Although the funding caps imposed by sequestration are likely to be postponed again, political discord and rising federal debt levels continue to drive budget sensitivity within Congress, forcing agencies to do more with less. The FY 2018 budget request – the first proposed budget by the Trump Administration - indicates a willingness to increase funding for the Department of Defense at the expense of some civilian agencies.

The Trump Administration’s IT management agenda continues to emerge, with a focus on mandates that drive innovation and modernization while also pressuring agencies for cost reductions and operational reform. Agency missions continue to grow in scope and complexity, laying the groundwork for continued investment in transformative technologies such as cloud computing, advanced analytics and cybersecurity.

Given these influences, Deltek forecasts federal information technology spending over the next five years will grow modestly from $99.5 billion in FY 2017 to $104.9 billion in FY 2022 at a compound annual growth rate (CAGR) of 1.1%.  (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.
• New Administration – The new administration has begun to reset some IT policy, but primary priorities carry the same themes under different branding.
• Agency Reorganization and Reform – The Trump Administration’s executive order directing enterprise-wide assessment of operational processes and workforce balance will likely uncover both opportunities and challenges for contractors.
• Legacy System Modernization – A centralized IT working capital fund via the creation of a Technology Modernization Fund or the passage of the Modernizing Government Technology (MGT) Act would speed modernization efforts significantly, however agencies must drive tangible cost savings to ensure the ongoing viability of the fund.

Deltek's Federal Information Technology Market, 2017-2022 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.