COVID-19 Related Federal IT Spending, Pt. 2
Published: April 29, 2020
Federal agencies spent on IT hardware, software, and cloud services in response to the COVID-19 pandemic.
- Federal agencies have spent more on IT products, including hardware and software, than they have on IT services.
- Spending on IT hardware has remained stable over 2 months while spending on software grew much faster in April 2020 compared to March 2020.
- Agencies spent the most on Health IT-related hardware and computing devices related to telework requirements.
- Spending on analysis support services and cloud services led agency spending in the IT Services category.
Last week I posted an overview of information technology spending related to novel coronavirus (COVID-19) response that U.S. federal agencies had made since the outbreak of the epidemic in early March. As a reminder for those who did not read the earlier post, the data pertaining to COVID-19 is identified by the National Interest Action value “COVID-19 2020” that agency contracting shops use in the Federal Procurement Data System-Next Generation. This week’s post digs deeper into the data, offering a look at how COVID-19 related federal IT spending is spread across the hardware and software segments, followed by a summary of the spending by technology area.
COVID-19 Related IT Spending on Goods and Services
Taking a look first at the data separated into IT goods (i.e., commodity IT products) and IT services, we see that in March and over 3 weeks of April 2020 (this data set was pulled on April 23, 2020), federal agencies spent a total of $569M on IT goods and $504M on IT services.
The agencies that spent the most on IT goods include Veterans Affairs ($422M), Health and Human Services ($100M), and Homeland Security ($13M). Those that spent the most on IT services include the Small Business Administration ($387M), Veterans Affairs ($39M), and Commerce ($36M).
COVID-19 Related IT Spending on Hardware and Software
Splitting the data into IT hardware and software, two spending pictures emerge. The first shows that agencies spent significantly more on IT hardware in March 2020 when ramping-up for workforces suddenly required to stay home and for the needs of medical facilities requiring Health IT-related equipment. IT hardware spending then grew only slightly through three weeks in April 2020 while spending on software exploded to roughly ten times the amount obligated in the previous month.
The agencies spending the most on IT hardware over both March and April were Veterans Affairs ($109M), Health and Human Services ($72M), and Homeland Security ($13M). Concerning software spending, the agencies that spent the most included Veterans Affairs ($313M), Health and Human Services ($28M), and the Treasury ($7M).
COVID-19 Related IT Spending by Hardware Type
The chart below shows the spending data for IT hardware divided by type, as best could be defined given the requirement descriptions provided.
This data shows that agencies like VA and HHS responded by ordering significant quantities of Health IT equipment, such as Alaris Infusion Pumps and Carescape Monitors. Spending on this and other Health IT-related equipment ramped up from $3.4M in March to $74M in April.
Agencies also spent big on laptops, iPads, and other portable computing devices for employees forced to work from home. Unlike the Health IT equipment, however, this telework-related spending rose rapidly to $59M in March before falling to $17.4M in April, suggesting that the initial burst of telework-related IT hardware spending had already begun to play itself out within weeks after the lockdowns began. Spending on network and communications-related hardware, meanwhile, charted an opposite pattern, reaching $11.4M in March before rising to $18M in April. This pattern suggests it took agencies a few weeks to understand the level of need for equipment related to teleworking capability.
COVID-19 Related IT Spending by Software Type
Turning to software, the picture is a little fuzzier because of the lack of detail provided in the requirements descriptions. The overall trend in the “Unidentified” category is nevertheless up, from $3.4M spent in March to $286M in April.
Software purchases related to cyber security followed a different pattern, starting strong at $34.6M in March, but falling to $8.4M in April, hinting that agencies felt they had done enough to address vulnerabilities created when a larger percentage of the work force began working from home.
COVID-19 Related IT Spending by Technology Service Area
As for IT spending divided by technology service area, the chart below reveals that agencies spent the most so far on analysis services; not all of which were related to health care. As discussed in my previous blog post, the SBA spent hundreds of millions on data analysis support related to small business relief. Spending on analysis support services also began slowly, totaling $59M in March before rising to $304M in April.
Concerning IT Services in general, this number includes services identified either in the requirement as being IT related or by the Product Service Code. IT Services spending related to telework at Commerce, for example, makes up $33M of the total $78M shown. Spending on cloud computing, on the other hand, is identifiable primarily by the requirement, including virtual desktop infrastructure, Amazon Web Services hosting, and a variety of other solutions delivered on a Software-as-a-Service basis. Of the agencies that spent the most on these types of solutions, HHS led the way with $$23.5M, followed by VA ($19.4M), SBA ($10.4M), Treasury ($3.4M), and Interior ($2.6M).
A final important observation to note is that total spending on cloud-based solutions hit $35.3M in March, but fell to $29.2M in April.