Federal Cloud Procurement Trends

Published: August 21, 2019

Federal Market AnalysisUSDACloud ComputingContracting TrendsDEFENSEInformation TechnologyDOJVA

Agencies are using GSA’s IT Schedule 70 and Government-Wide Acquisition Contracts to procure cloud services.

Procurement via IT Schedule 70 Continues to Dominate the Market

Although the methods used by federal customers to procure cloud goods and services seem to fluctuate every few years, there is one method that always remains near the top of preferred agency methods – GSA’s IT Schedule 70.

Thanks in part to the offerings available on Schedule 70 via Special Item Number (SIN) 132-40, agencies continue to lean on GSA’s flagship technology contracting vehicle for cloud procurement. From fiscal 2016 to 2018, in fact, agencies spent $1.62B on contracts for cloud services via Schedule 70. Three years of impressive growth comprise this total, from $310M spent in FY 2016 to $748M spent in FY 2018.

Concerning SIN 132-40 specifically, spending under the SIN increased especially from FY 2017 to FY 2018, accounting for 24% of the total that passed through Schedule 70 in the latter year.

The expansion of SIN 132-40 in 2019 to include cloud-related professional services promises to drive even greater use of Schedule 70 in the years to come.

Preferred Defense Cloud Procurement Methods, FY 2016-2018

When measured by the number of awards made between FY 2016 and 2018 it is clear that IT Schedule 70 is the top cloud procurement method at the Department of Defense as well. Defense Agencies in particular use Schedule 70, spending $180M through it on cloud requirements from FY 2016 to 2018. Air Force spent $43M over that same period while Navy spent $26M. Army spent only around $7M.

 Preferred Civilian Sector Cloud Procurement Methods, FY 2016-2018

The picture on the Civilian side of the market changes a bit, with agencies preferring Government-Wide Acquisition Contracts (GWACs) over Schedule 70.

The Civilian agencies using GWACs the most (as measured by spending) include Veterans Affairs ($452M), the Department of Justice ($157M), and the Department of Agriculture ($117M). Of the vehicles that are the most popular, HHS’ Chief Information Officer–Solutions and Partners 3 (CIO-SP3) large business comes in first, with a three year total of $397M, led by the VA ($251M). GSA’s Alliant Large Business GWAC came in next with $339M total spent by Civilian agencies from FY 2016 to 2018. Justice used Alliant LB the most, putting $142M through the vehicle over that three year span. Lastly, Civilian agencies used NASA’s Solutions for Enterprise-Wide Procurement V (SEWP V) GWAC, spending $324M from FY 2016 to 2018, led by VA, which put $150M through it altogether.

Final Thoughts

The dominance of GSA’s IT Schedule 70 and several of the government’s largest GWACs probably comes as no surprise to many, but contractors are advised to look for potential changes in the future. Category management initiatives and Best-in-Class (BIC) contracting promise to shake things up by focusing funding in specific directions, including Schedule 70 and the Alliant 2 GWAC, but also including other vehicles. Neither CIO-SP3 nor SEWP V are listed as a BICs so the potential exists for cloud spending in the future to fall away from those vehicles vs. others.