FY 2025 President’s Budget Request – GovWin FMA’s First Take

Yesterday, the Office of Management and Budget (OMB) released the Biden Administration’s fiscal year (FY) 2025 Budget Request. The administration’s budget proposal includes $1.63T in top-line discretionary budget requests for the federal department and agencies, plus the administration’s policy and budget priorities for the next fiscal year and beyond.

The GovWin Federal Market Analysis (FIA) team has dug into the available budget detail so that we could provide you with our first impressions of what we found noteworthy for the largest departments and agencies, especially concentrating on spending priorities that may lead to potential contractor opportunities or impacts in FY 2025, which will begin October 1, 2024. Below is a summary graphic followed by key funding details and initiatives arranged by department.

Air Force

The president’s budget request provides $262.6B in total discretionary funding for the Department of the Air Force (USAF), a 6.2% increase over the Continuing Resolution (CR) for FY 2024, as amended.

Funding highlights include:

• Requests $2.0B for Cyberspace Activities ($1.3B O&M, $753M RDT&E, 1.0M Procurement), 9.5% more than the amended CR level for FY 2024.
• Provides $872M under O&M for weapon systems sustainment (WSS) for USAF aircraft, ground, and cyber weapon systems. The U.S. Space Force (USSF) requests an additional $1.4B for WSS, including $42M to improve real-time cyber defenses.
• Includes Operations and Maintenance (O&M) funding of $81.8B, 7.8% above the FY 2024 amended CR level.
• Provides $59.5B for Procurement, 2.0% above the FY 2024 amended CR level.
• Allocates $67.8B for Research, Development, Test and Evaluation (RDT&E), 10.2% above the FY 2024 amended CR level.

Navy

The president’s budget requests $257.6B for the Department of the Navy, a 5.9% increase over the CR for FY 2024, as amended.

Funding highlights include:

• Requests $879M for Cyberspace Activities ($850M O&M, $21.4M Procurement, $7.6M RDT&E), 12.3% more than the amended CR level for FY 2024.
• Includes $87.6B for Operations and Maintenance (O&M), 9.4% more than the FY 2024 amended CR level.
• Provides $77.1B for Procurement, 6.5% above the FY 2024 amended CR level.
• Allocates $25.7B for Research, Development, Test and Evaluation (RDT&E), 1.1% below the FY 2024 amended CR level.
• Requests $3.7B for Information Warfare capabilities, including $1.5B for enterprise networks, $1.1B for cybersecurity and $1.0B for electronic warfare systems.

Army

The president’s budget requests $185.8B for the Department of the Army, an increase of 0.3% over the amended CR level for FY 2024.

Funding highlights include:

• Requests $1.2B for Cyberspace Activities ($1.1B O&M, $155M RDT&E), 15.1% less than the amended CR level for FY 2024.
• Includes $72B for Operations and Maintenance (O&M), 1.3% more than the amended CR level for FY 2024.
• Provides $25.2B for Procurement, 2.4% more than the amended CR level for FY 2024.
• Allocates $14B for Research, Development, Test and Evaluation (RDT&E), 18.1% less than the amended CR level for FY 2024.

Defense Agencies

The president’s budget requests $143.7B for Defense Agencies (Defense-Wide), an increase of 1.6% over the amended CR level for FY 2024.

Funding highlights include:

• Requests $3.6B for Cyberspace Activities ($2.5B O&M; $72.5M Procurement; $984M RDT&E), 2.85% more than the amended CR level for FY 2024.
• Includes $97B for Operations and Maintenance (O&M), 4.3% more than the amended CR level for FY 2024.
• Provides $5.8B for Procurement (PROC), 32.1% less than the amended CR level for FY 2024.
• Allocates $35.6B for Research, Development, Test and Evaluation (RDT&E), 1.7% less than the amended CR level for FY 2024.

Health and Human Services

The president’s budget request includes $130.7B in base discretionary budget funding for HHS, a 2% decrease from the FY 2024 annualized CR level.

Funding highlights include:

• Requests $9.9B for department-wide Information Technology (IT) of which $1.1B is for cybersecurity.
• Increases NIH discretionary budget authority to $46.4B, and includes funds to bolster cutting-edge analytics, artificial intelligence, and machine learning to leverage data for advanced medical and scientific research.
• Provides CDC with $8.6B in discretionary authority, with $6.1B of the total allocated to modernize laboratory capacities, strengthen public health data systems, enhance disease surveillance, and support vaccine and medical countermeasure efforts.
• Requests $8.0B for IHS, including $435M to modernize IHS’ Electronic Health Record.
• Allocates $744M for CMS information technology systems and operations, including funds to sustain cyber capabilities and continue modernization of Medicare payment systems.

Veterans Affairs

The president’s budget request includes $129.3B in base discretionary budget funding for VA, a 6% decrease from the FY 2024 annualized CR level. The request also includes an additional $4.4B for Medical Care Collections, $304M for the Recurring Expenses Transformational Fund, and $131.4B in advance discretionary budget authority for VA medical care programs in FY 2026.

Funding highlights include:

• Requests $8.8B for department-wide Information Technology (IT) of which $952M is for cybersecurity.
• Allocates $4.4B to the Veterans Benefits Administration (VBA) to continue providing veterans, their dependents, and survivors a variety of benefits. Funds include $4.0B for VBA General Operating Expenses, a $136M increase above FY 2024 levels.
• Provides $6.2B to VA’s Office of Information Technology to continue IT system modernization for optimized benefits delivery and improved accessibility of medical care services.
• Invests $2.8B for the construction and expansion of critical medical infrastructure and facilities, including $2.1B for major construction, and $380M for minor construction.
• Includes $894M for the VA Electronic Health Record (EHR), a 52% decrease from the FY 2024 budget request in response to the EHR Modernization Reset announced in April 2023 which defers future EHR deployments.

Housing and Urban Development

The president’s request provides $72.6B in discretionary funding for the Department of Housing and Urban Development, an increase of 0.7% over the annualized CR level for FY 2024.

Funding highlights include:

• Requests $539M for Information Technology, of which $99M is for cybersecurity.
• Allocates $4.1B for Homelessness Assistance Grants.
• Provides $407M to support energy efficiency, resilience and climate mitigation work in HUD-assisted and financed developments.
• Includes $241M for the Housing Choice Voucher Program, accommodating more than 20,000 new vouchers.

State and USAID

The president’s budget provides $64.4B in total discretionary funding for the Department of State, the U.S. Agency for International Development (USAID) and related international assistance programs, a 1.6% increase from the FY 2024 annualized CR level.

Funding highlights include:

• Requests $3.3B for State Department and $383M for USAID for Information Technology (IT) of which $569M and $83M is for cybersecurity, respectively.
• Proposes $482M for support for Ukraine (in addition to the current National Security Supplemental Request), including $250M for economic and development assistance to support reforms, $95M in security-sector/military assistance, and $71M for health programs.
• Allots $999M across Europe, Eurasia, and Central Asia to counter Russian and Chinese influence by building the resilience of allies and partners, advancing democratic reforms, countering disinformation, and bolstering energy and cyber security.
• Supplies $257M to strengthen U.S. East Asia and Pacific regional frameworks to enhance cyber and digital connectivity to build resilience to transnational threats, bolster regional security through maritime law enforcement support, and promote economic prosperity.
• Allocates $7.6B to support key partners in the Middle East and North Africa, including Israel, Jordan, and Egypt, and provide assistance to the Palestinian people in the West Bank and Gaza.
• Provides $1B to support the implementation of the Root Causes Strategy in Central America.

Homeland Security

The president’s budget requests $62.2B in total discretionary budget for DHS, 2.0% above the FY 2024 annualized CR level. In addition, the budget includes $22.7B for the Disaster Relief Fund (DRF) and proposes $4.7B for a Southwest Border Contingency Fund (SWBCF) to provide surge resources along the Southwest border.

Funding highlights include:

• Requests $11.1B for department-wide Information Technology (IT) of which $3.1B is for cybersecurity.
• Provides the Cybersecurity and Infrastructure Security Agency (CISA) with $470M for the Continuous Diagnostics and Mitigation (CDM) program; $394M for the Joint Collaborative Environment (JCE) for the continued build of the Cyber Analytics and Data System (CADS); and $116M to implement provisions in the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA).
• Allocates $5.0M to open an Artificial Intelligence (AI) Office in the DHS Office of the Chief Information Officer to advance the responsible use of across DHS.
• Supplies $127M for Customs and Border Protection (CBP) for border security technology and assets between ports of entry and $86M for air and marine operational support.
• Allots $90M for Transportation Security Administration’s Checkpoint Property Screening System (CPSS) program to address capability gaps to detect new and evolving threats reliably and efficiently.

Energy

The president’s budget request provides $51.4B in base discretionary funding for DOE, a 7% increase over the FY 2024 annualized CR level.

Funding highlights include:

• Requests $5.5B for department-wide Information Technology (IT) of which $971M is for cybersecurity.
• Funds the National Nuclear Security Administration (NNSA) with $25.0B, with $19.9B for Weapons Activities to address new threats in nuclear nonproliferation and counterterrorism.
• Commits $8.6B to the Office of Science and includes $1.9B to advance critical and emerging technologies such as AI/ML and quantum information sciences.
• Provides the Office of Cybersecurity, Energy Security, and Emergency Response (CESER) with $461M to address physical and cyber threats to U.S. energy infrastructure.
• Allocates $3.1B for the Office of Energy Efficiency and Renewable Energy, with $507M for the Advanced Materials and Manufacturing Technologies and Industrial Efficiency & Decarbonization Offices, $501M targeted toward Vehicle Technologies, and $318M for Solar Energy.
• Includes $56M to establish new testing facilities at national labs including $12M to complete the world’s first microreactor testbed, the NRIC DOME, at the Idaho National Laboratory.

Justice

The president’s budget request includes $37.8B in base discretionary budget funding for DOJ, a 1% increase above the FY 2024 annualized CR level.

Funding highlights include:

• Requests $4.4B for department-wide Information Technology (IT) of which $1.2B is for cybersecurity.
• Delineates DOJ’s discretionary budget among five categories: 56% for law enforcement and U.S. Attorney’s Office (USAO), $28% for prisons and detention, 10% for state and local grants, 3% for litigation, and 3% for immigration/administration/technology/other.
• Expands funding for DOJ law enforcement with a $17.7B request, including $2.8B for USAO, $2B for ATF, and $1.9B for USMS.
• Allots $11.3B to the FBI, with an increase of $85M to restore national security and law enforcement positions across FBI headquarters programs, an increase of $18M to enhance foreign adversary intelligence collection, an increase of $8M to strengthen the National Instant Criminal Background Check System, and an increase of $7M to bolster cyber capacities.
• Provides $202M, a 47% increase over FY 2024 Annualized CR levels, to the Justice Information Sharing Technology (JIST), which includes $52M for cybersecurity posture enhancements, $10M for the National Law Enforcement Accountability Database, and $3M for AI implementation.

Agriculture

The president’s request provides $29.2B in discretionary funding for the Department of Agriculture, an increase of 7.4% over the FY 2024 annualized CR level.

Funding highlights include:

• Requests $2.9B for Information Technology, of which $233M is for cybersecurity.
• Includes $10.8B for the U.S. Forest Service, $1.2B of which is for Forest Service Operations (FSO). The 2025 FSO Budget prioritizes IT investments (amounts and programs not specified) for the Wildfire Crisis Strategy.
• Contains $10.5B for the Natural Resources Conservation Service, including $1.9B for the Environmental Quality Incentives Program and $985M for Conservation Operations.
• Allocates $1.8B for the Agricultural Research Service, adding $13M for operational support at the National Bio- and Agro-Defense Facility.

Transportation

The president’s request provides $25.4B in discretionary funding for the Department of Transportation, 11.5% less than the FY 2024 annualized CR level.

Funding highlights include:

• Requests $4.4B for Information Technology, of which $472M is for cybersecurity.
• Provides $72.3B (inc. mandatory spending) for the Federal Highway Administration, $9.45B of which is for the Highway Infrastructure Program.
• Contains $22.45B for the Federal Aviation Administration, including $3.6B to sustain the National Airspace System.
• Allocates $16.4B for the Federal Railroad Administration, $250M of which is dedicated to the Consolidated Rail Infrastructure and Safety Improvements program.

National Aeronautics and Space Administration

The president’s budget request provides $25.4B in base discretionary budget authority for NASA, equivalent to the FY 2024 annualized CR level.

Funding highlights include:

• Requests $2.2B for department-wide Information Technology (IT) of which $185M is for cybersecurity.
• Allocates $7.5B for Deep Space Exploration Systems, including $2.4B for the Space Launch System.
• Provides $4.4B for Space Operations, including $1.3B to continue support for International Space Station operations through its 2030 retirement.
• Funds Space Technology at $1.2B, including $495M for Technology Demonstrations, $341M for Technology Maturation, and $242M for the Small Business Innovative Research and Technology Transfer program.
• Requests $3.0B for Safety, Security, and Mission Services to meet workforce, infrastructure, information technology, and business operations requirements.
  • Provides $629M for Information Technology programs to modernize IT capabilities, strengthen the agency’s cybersecurity posture, and artificial intelligence risk management.

Treasury

The president’s budget request includes $14.4B in base discretionary budget funding for Treasury, a 1% increase from FY 2024 annualized CR level.

Funding highlights include:

• Requests $9.1B for department-wide Information Technology (IT) of which $1.2B is for cybersecurity.
• Maintains IRS activities at FY 2024 levels with $12.3B, with proposals to restore full Inflation Reduction Act investments and new funding for long-term maintenance on service enhancements.
  • Includes $4.4B for the newly titled Technology and Operations Support account under IRS, which encompasses the development, security, and maintenance of IRS information systems.
• Provides $396M to the Bureau of the Fiscal Services (BFS), a $24M increase above FY 2024. FY 2025 funding includes enhancing the security posture of financial systems by transitioning all mainframe applications to the cloud.
• Allocates $150M to the Cybersecurity Enhancement Account (CEA), the centralized fund for the design, development and evolution of enterprise cyber capabilities and services.
  • Includes additional program funding for security logging (+$29M), zero trust architecture (+$13M), enterprise cloud (+$10M), BFS cloud adoption (+$6M) and universal encryption (+$1M), among others.

Federal Civilian Information Technology (IT) Budget

The FY 2025 IT budget for Civilian departments and agencies provided by OMB lists total investments at $75.1B. The largest Civilian departments are listed below. OMB is in the process of posting detailed and updated IT Portfolio data to the IT Dashboard.

More Analysis Coming Soon

The budget observations highlighted above are our initial takeaways from the budget documents released by OMB, the Department of Defense (DOD) and the various departments and agencies. In the coming days, the GovWin Federal Market Analysis team will be publishing more robust analysis of the FY 2025 budget, where we will go into greater detail on the key initiatives, IT investments and contractor implications that will shape the federal IT marketplace as we prepare to head into FY 2025.