Deltek’s Federal IT Market Forecast Projects Spending Trends from 2019 to 2024

Federal IT is in the midst of a broad transformation effort driven by a combination of White House policies, technological advances and legislative initiatives.

The Trump Administration’s presidential management agenda calls for modernizing agency IT environments through the adoption of cloud-based shared services, leveraging data as an enterprise asset, improving citizen services and streamlining IT acquisitions.

Cloud computing, the incorporation of advanced analytics and artificial intelligence into cybersecurity processes, and the outsourcing of agency networks are key areas of growth in the federal IT space.

Under scrutiny by Congress and the Office of Management and Budget (OMB) agencies will be under pressure in the coming years to increase efficiency, eliminate waste and adopt emerging technologies that promise to improve service-delivery.

Given these influences, Deltek forecasts federal spending on contractor-supplied information technology (IT) products and services will grow from $110.1 billion in FY 2019 to $116 billion in FY 2024 at a compound annual growth rate (CAGR) of 2.2%. (See chart below.)

Key themes emerging from Deltek's research include:

• Budget Uncertainty. Congress and the White House continue to negotiate the terms of a budget deal to stave off sequestration for FY 2020 and potentially FY 2021, but the pace is slow.
• Flat Budgets for IT. The federal IT budget remains relatively flat, driven by cost cutting initiatives balanced by investments in modernization and emerging technologies.
• New Paths to the Cloud. Agencies are leveraging solutions that will allow them to migrate to the cloud without a new Trusted Internet Connections (TIC) policy, removing a previous roadblock to faster cloud adoption.
• Cybersecurity. Threats are driving shifts in priorities and strategies: cloud computing, shared services, infrastructure modernization, advanced analytics, and artificial intelligence at nearly every agency.
• Securing Contractor Environments. New security policies focus on increasing contractors’ responsibility for safeguarding federal data, including pending FAR addition regarding Controlled Unclassified Information (CUI), DOD’s upcoming Cybersecurity Maturity Model Certification (CMMC) program and the supply chain security executive order and legislation.
• Category Management. GSA and OMB’s initiative is streamlining IT contract spending and making contract positioning critical.
• Potential New Administration. A change of administration could be on the horizon in late 2020, impacting budget priorities, leadership stability, strategic direction and program implementation progress.

Deltek's Federal Information Technology Market, 2019-2024 takes a 5-year strategic view of the trends, drivers and inhibitors impacting federal information technology procurement. The scope of analysis includes traditional IT as well as embedded IT spending within non-IT programs. The report explores market drivers, strategic programs, key initiatives and forecasts federal information technology spending over the next five years. The report provides growth projections for vendor-supplied products and services as well as identifies the unique issues driving individual market segments and agencies.

Get a free report summary of Federal Information Technology Market, FY 2019-2024.