Federal Contractors Show Optimism Regarding Future Agency IT Investments

Published: July 21, 2021

Federal Market AnalysisForecasts and SpendingInformation Technology

Industry respondents to a recent Deltek survey regarding the state of the federal IT market, expressed optimism about future agency investments and budgets for IT over the next few years.

As part of Deltek’s research for its annual Federal Information Technology Market report, the Federal Market Analysis team conducted surveys with industry executives to gain their thoughts and insights. From mid-April to mid-May 2021, Deltek conducted a web survey of federal IT contractors, receiving responses from 131 individuals involved in business development activities. Fifty-five percent of respondents were from small companies with less than 150 employees and 20% of respondents were from large companies with over 5,000 employees.

When asked about the impact of the pandemic on their company, respondents said that RFPs and contract awards were delayed, but many contractors experienced growth. Several respondents said that their company grew in revenue and employees. One respondent stated that their company had its best year in the 20-year history of the company.  

Deltek asked survey respondents to identify areas of potential positive and negative impact of the Biden administration on federal IT investments.  Respondents replied that areas of positive impact included strengthening cybersecurity and IT funding provided by the American Rescue Plan Act.  Respondents indicated that competing national priorities might limit resources and cause a negative impact on federal IT investments. 

Of those surveyed, most expect total federal IT budgets to increase or remain flat over the next three years.

When asked what approaches respondents are seeing federal agencies take to drive IT modernization, most answered that agencies are migrating to cloud solutions to drive modernization.

Deltek also asked respondents to identify what types of products and services they are seeing agencies prioritize for investment or upgrade. Cloud computing is also by far the highest priority for federal investments/upgrades according to respondents.

Out of a list of eleven different IT solutions, Deltek asked respondents which they believe will be a priority for federal agencies over the next three years. Cybersecurity, AI, cloud computing, and big data solutions are top priorities for federal agencies, according to survey respondents.

For more information on Deltek’s survey responses and the Federal Information Technology Market, 2021-2023 report, please click here.  The report takes a 3-year strategic view of the trends, drivers and inhibitors affecting federal information technology procurement, and provides growth projections for vendor-supplied products and services.