VA Federal IT Spending Projected to Grow over the Next Five Years

Published: June 29, 2016

Forecasts and SpendingVA

Deltek’s new federal IT forecast, slated for release this week, predicts that spending by the Department of Veterans Affairs on contracted IT goods and services will climb from $4.1 billion in FY 2016 to $4.5 billion in FY 2021 reflecting a 3.7% compound annual growth rate (CAGR).

Deltek’s forecast projects flat spending on hardware, but increased spending on software, IT services, and communications and network services over the forecast period.

VA continues to receive scrutiny from Congress, as well as the public, due to past medical scheduling scandals, pervasive claims backlogs, and increasing cybersecurity threats. However, the department has made strides in overcoming these issues and is pushing itself forward to become a world-class veteran care organization. Information technology is a critical enabler for improving and increasing VA services to the nation’s veterans.

VA’s CIO, LaVerne Council, took over in July 2015 and has been decisive and fast moving in order to make the greatest impact possible and lay the foundation for continual IT innovation to live beyond her short tenure as CIO.

Under Council’s guidance, VA’s IT organization laid out a new mission and vision:  

  • Mission - Collaborate with business partners to create the best experience for all veterans.  
  • Vision - Become a world-class organization that provides a seamless, unified veteran experience through the delivery of state-of-the-art technology.

Deltek expects IT spending to increase slightly in order to accomplish the goals and objectives necessary to fulfill VA’s mission. Cybersecurity, cloud and big data technologies are essential to VA’s IT advancement, veteran service delivery, and efficiency achievement.

VA is aggressively deploying tablets to improve veteran care, but because these are at a lower price point than desktops or laptops, the trend causes a decline in hardware spending. Additionally, VA is seeking an Enterprise Cloud Services Broker (ECSB) to lead data center consolidation and overall reduction of VA owned and managed data center footprint through vendor managed cloud services which will cause an increase in IT services spending, but a decline in hardware spending.

VA is reevaluating its long term commitment to VistA. The direction for the scheduling system solution hinges on the decision regarding whether or not to keep VistA. Investment in a COTS system would cause an increase in software spending by VA.

During a recent hearing, the Senate Veterans Affairs Committee expressed its impatience with VA’s IT modernization efforts.  But VA Undersecretary for Health, Dr. David Shulkin, was quick to outline the progress that has been made over the past two years. VA is on track to close 100% of the VA inspector general’s IT recommendations by the end of 2017, according to Shulkin.  When asked about health record interoperability he stated that VA has a health information exchange that shares records with more than 700 hospitals, and thousands of clinics and providers.  Shulkin did state that VA has a long way to go, but stressed that real progress is being made.

Both presumptive presidential candidates support VA and plan to back the agency with additional funding if elected, providing further evidence that VA is likely to have robust coffers for future IT spending.