IT Priorities Snapshot: Department of Energy

Published: June 03, 2015

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The various budgets and plans federal agencies prepare to outline strategic priorities help to highlight opportunity areas for contractors. These agency documents include business cases from agencies’ FY 2016 budget requests, which provide insight into where government is relying on contractors as well as critical capabilities they are looking to develop.

As previously noted with the Department of Commerce and Department of Justice, exploring agency priorities often focuses on investments with high total dollar value. This can be useful starting point for discussions around contracting opportunities, but it overlook assumptions about what portion of spending will be used to acquire goods and services from government contractors. By eliminating the funding dedicated to supporting government staff, spending levels offer a better view of the planned role for contractors.

At the Department of Energy, the top ten investments by total requested IT spending overlaps with the set of programs yielding the highest values of contractor addressability. When viewed based on contractor addressability, the order is shuffled a bit, but the investments on the lists are largely the same. These ten investments combined account for over $153 million in contractor addressable spending. As a whole, technology investments at the Department of Energy rely heavily on contractor goods and services, averaging 97.2% contractor addressability.

Another area of targeted for contractor spending is associated with technology development, modernization, and enhancement (DME). In recent years, however, agencies have increasingly used operational spending to fund upgrades and ongoing requirements. This shift makes the DME category less reliable as a means to gauge future opportunities. This approach encounters an additional challenge at the Department of Energy, which lacks the concentrated spending that may be found in other agency budgets. Nonetheless, digging into the top five investments by anticipated DME spending, several significant investments become apparent. Not a single investment from the top DME programs cracks the ranks for contractor addressability or overall spending, highlighting the utility of viewing budget and strategy data through different lenses. Efforts for development include activities around application and data hosting, high performance computing equipment buys, and information security.

The Energy Department’s IT budget includes planned spending for over 750 investments in FY2016, spreading the total request of $1.49 billion fairly thinly compared to some other agencies. For example, the National Aeronautics and Space Administration requested a total of $1.39 billion in funding for IT funding in FY 2016. By contrast, NASA’s spending will be distributed across fewer than 70 investments. At the Department of Energy, the top ten investments by requested funding combine to account for only 11% of the IT budget. Compared to estimates of the previous year’s spending, the department expects to maintain its investment in infrastructure maintenance, consolidation, and modernization while slightly increasing funding for enterprise architectures, capital planning, and CIO functions. Despite consolidation initiatives, the department’s federated laboratory environment is likely to continue produce dispersed technology spending and a high degree of reliance on industry to maintain and advance capabilities.