U.S. Department of Transportation COVID-19 Spending Analysis

Published: June 03, 2020

Federal Market AnalysisCoronavirus (COVID-19) PandemicSpending TrendsDOT

The DOT transitioned easily to remote operations, limiting spending on IT.

Key Takeaways

  • DOT’s pre-crisis transition to the cloud enabled the department to quickly and painlessly adopt telework.
  • Spending on information technology in response to the pandemic was minimal.
  • During the shutdown large businesses have continued to earn more than small businesses.

The COVID-19 pandemic hit U.S. transportation systems hard, causing entire industries to cease operations. Tens of thousands of transport-related workers found themselves temporarily without employment as airlines, bus services, and trucking companies ground to a halt. The Department of Transportation (DOT) responded by making billions of dollars in loans available through $36B in funding provided by the CARES Act.

Unlike other federal agencies, however, contract spending at the DOT did not follow suit. Totaling just under $6.9M as of June 1, DOT’s contract spending is currently 18th among the top 20 largest federal agencies. Even the Peace Corps, not known for its organizational size, spent $3.7M, or almost half as much as the DOT.

One reason contract spending did not jump for goods and services such as information technology is because the department had already started down the path to telework years ago. As Ryan Cote, the DOT’s Chief Information Officer, stated in May, the DOT’s networks could handle 40% of the workforce teleworking at the start of the crisis. Then, once most of the DOT’s employees went home, “the department only had to scale up its current environment by signing new licenses and increasing capacity.”

So, if the DOT did not need to spend on teleworking, what did it spend on as the crisis deepened in April and May?

Examining the data by Product Service Code shows that the majority of DOT’s COVID-19 related spending went for custodial services to clean and sanitize department facilities. Much smaller totals, including only $53K for IT System Configuration, went to fulfill other requirements, and even then some of that spending went for various housekeeping services. Simply put and based on recorded spending, DOT responded to COVID-19 by having everyone but the cleaners shut the lights, lock the doors, and head home to telework.

As for contract spending by business size, most of the department’s obligations, totaling $5.5M, went to large businesses.

Spending with small businesses, meanwhile, totaled $1.3M, which flowed through both set-aside contracts and sole source efforts.

Summing up, due to the nature of its mission, the DOT and its component agencies did not need to spend much on contracted services once operations shut down. Work could be accomplished via telework and the department was more prepared than others for that eventuality, which resulted in lower IT spending, too.