FY 2020 Federal Budget Assessment – Insights and Implications

Back in early March when the Office of Management and Budget (OMB) released many of the details of its fiscal year (FY) 2020 budget request the GovWin IQ Federal Market Analysis team provided our initial observations of the proposed budget.

Now that we have the remaining budget artifacts released from several remaining departments and agencies as well as the Department of Defense (DOD) – many of which were not released publicly until very recently – we have a much more complete picture of agency plans and priorities.

In our full FY 2020 budget assessment we examine the proposed program investments and policy directives within the Trump Administration’s $1.3T discretionary budget request, which includes $718.3B in Defense and $594.5B in Civilian discretionary budgets and the $87.1B Information Technology budget.

In its third budget request, the Trump Administration proposes adhering to the original Defense and Non-Defense discretionary budget caps laid out in the Budget Control Act (BCA). Rather than look to Congress to pass yet another bipartisan bill setting new discretionary caps, the Administration proposes doubling Overseas Contingency Operations (OCO) funding – which is exempt from sequestration – to effectively raise overall Defense spending without violating BCA caps.

The FY 2020 budget supports key policies, programs and agency reforms consistent with Administration priorities, such as national defense and force readiness, border security, public safety, veteran care and addressing the opioid epidemic.

Key Findings Include:

• The FY 2020 budget requests a significant increase in DOD funding at the expense of civilian agency budgets. It also proposes shifting billions in DOD base funding to Overseas Contingency Operations (OCO) accounts, which are exempt from sequestration.
• Priorities remain consistent: national defense readiness, border security, IT modernization, cybersecurity, R&D, and healthcare.
• Requested funding for Defense prototyping is up more than 20%, suggesting that the use of Other Transaction Authority (OTA) for commercial acquisitions will continue growing in FY 2020.
• The Trump Administration is requesting a relatively flat IT budget, with spending boosts planned in key areas, including Census 2020, VA electronic health records and claims processing, FAA modernization, and cybersecurity.
• Federal investment in AI is advancing rapidly, with significant budget increases proposed within both civilian and Defense agencies.
• IT investment transparency has been significantly limited by OMB, which continues transitioning agencies to the Technology Business Management (TBM) Framework.

Agency Information Technology Budgets

As a mission enabler, the Administration continues to emphasize IT modernization and investments in key technologies, presenting potential opportunities in cloud computing, artificial intelligence, automation and cybersecurity.

The total FY 2020 IT budget request is $87.1B, down from $88.0B in FY 2019. This total is spread between roughly $36.1 in Defense and $50.1B in Civilian IT. (See table below.)

For a deeper dive into the details of the FY 2020 budget, check out the full report: Insights and Implications: FY 2020 Federal Budget Request.

Get a free report summary of Insights and Opportunities: FY 2020 Federal Budget Request.