New Cloud Contract Awards and Spending at the Department of the Treasury in FY 2023

The start of a new federal fiscal year always brings with it a slew of newly reported spending data. Being curious about how cloud spending is proceeding at civilian agencies (Defense spending data is delayed by 90 days), I decided to pick a cabinet-level department at random and run Federal Market Analysis’ cloud keyword set against the data to identify new contracts awarded in fiscal year 2023. The results of that search for the Department of the Treasury, my randomly selected agency, are shown in today’s post.

Readers should keep in mind that this is a quick first look at the reported data. It is also for new cloud contract awards only, not for spending on cloud contracts awarded in earlier years that are still active. This means that the Treasury spent more on cloud last fiscal year than the data here shows. By way of comparison, I’ve created a chart showing Treasury’s cloud spending data since FY 2020. The fiscal years 2020 through 2022 show as much of Treasury’s cloud spending as I could identify. The FY 2023 column shows the spending on newly awarded contracts only.

Total Cloud Spending, FY 2020-2023

The data shows that Treasury’s spending on new cloud efforts is comparable to its total spending on cloud in FY 2021. FY 2022 saw the addition of another $83M compared to FY 2021’s total. If FY 2023 shows spending on new cloud contracts only, the data hints that Treasury’s cloud spending is accelerating overall. FMA estimated last August that when all was said and done Treasury’s cloud spending for FY 2023 would total $515M. This early look at the data suggests our estimate will be close to the final number.

Spending by Treasury Component

Looking at the data by Treasury component it comes as no surprise that the Internal Revenue Service spent the most. The IRS has been engaged in a high-visibility IT modernization effort for a couple of years now and adopting cloud computing has been at the heart of that. What is a bit surprising is just how narrowly focused the award of contracts for cloud is at the Treasury. When one removes the IRS from the mix it turns out there is very little spending going on across the department.

Top Ten Contractors by Spending

Finally, here is the spending data for the top ten contractors at Treasury. The one thing that stands out is how strongly represented small businesses are in the mix. Seven out of the top ten are registered small businesses and two of those – Lancer Information Solutions and V3Gate – are service disabled veteran owned small businesses. Even the top earning contractor, FCN, is a woman owned small business. Treasury is clearly a good place for small businesses to compete for cloud work.