MA

Army Business System Investment in Fiscal 2020

Published: January 15, 2020

Federal Market AnalysisARMYBudgetBusiness SystemsDEFENSEInformation Technology

Business systems continue to attract funding.

Despite receiving tens of billions in investment annually, defense business systems remain the red-headed stepchild of federal information technology. Usually ignored as outmoded legacy tech in favor of new topics like advanced analytics, cloud computing, and, especially, artificial intelligence, defense business systems still do much of the heavy lifting in DOD’s IT environment, processing military pay, tracking logistics, and handling numerous other tasks. Recent news, however, about the U.S. Army extending its General Fund Enterprise Business System (GFEBS) to the Defense Health Agency and U.S. Navy, after years spent migrating to the cloud, show that defense business IT remains a vital part of DOD’s technology environment. With that in mind, here is what the U.S. Army has reported it intends to budget for business systems in fiscal year 2020.

Total Spending

Three years ago, the DOD limited reporting on its IT spending to investments it categorized as Non-National Security Systems (NSS). As a result, roughly half of the investments for which it previously reported data disappeared from public view. The numbers shown below are for Army’s non-NSS investments from fiscal year 2018 through 2020.

Remarkably stable from year-to-year, Army’s business systems investment averages $3.3B annually, with fluctuations based on funding directed to one system or another as it goes through modernization and/or upgrade phases. Keep in mind that the Army includes some telecommunications and data center investments in its business systems totals, so the total numbers shown come from its request released in early FY 2019, not the final funding legislation signed by the president in December 2019.  That legislation did not provide sufficient detail to allow the development of a new budget summary for FY 2020’s business systems.

Top Programs, FY 2018-2020

Of the Army’s top 5 programs, in terms of annually requested budgets, the Integrated Personnel and Pay System–Army, Global Combat Support System–Army, and General Fund Enterprise Business System continue to attract higher funding, although exactly how much is not known because the funding legislation passed by Congress and signed into law in December 2019 did not include an approved budget for Operations and Maintenance.

As for “new” money, represented by Research, Development, Test, and Enhancement (RDT&E) and Procurement budgets, the legislation did include figures for those areas. These totals are as follows:

Integrated Personnel and Pay – Army

  • FY 2020 RDT&E - $102M
  • FY 2020 Procurement - $14M

Global Combat Support System – Army

  • FY 2020 RDT&E - $60M
  • FY 2020 Procurement - $8.8M

General Fund Enterprise Business System

  • FY 2020 RDT&E - $42.8
  • FY 2020 Procurement - $15M

The DOD did not provide specific funding totals for investments under the Major Command Automation Systems and Distributed Learning System lines shown in the chart, but if the originally requested funding totals hold then both programs will receive an additional $3M and $1M for FY 2020, respectively.

Final Thoughts

Talk concerning the modernization of Army’s business systems to reduce costs seems to be exactly that. Systems like GFEBS may be moving to new environments in order to improve security, but there is no evidence to date that migrating to a cloud platform is doing anything to reduce the department’s costs. A few years may be necessary to see if any cost efficiencies gained. For now, what appears to be happening is a shift in budget dollars from the industry partners that used to maintain large business systems in legacy environments to the new partners running the DOD’s cloud environments. If there are no significant cost reductions in the long run, as reflected in declining budgets, then one of the basic premises for moving systems to cloud environments may turn out to be debatable.