Small Business Administration FY 2024 Budget Outlook

The Biden Administration released its fiscal year (FY) 2024 budget request in March and the new FY 2024 Small Business Administration (SBA) budget request reflects sustained priorities as well as efforts to increase efficiency.

FY 2024 Total Discretionary Budget

The SBA has requested $1.0BM in total discretionary budget authority for FY 2024, which represents a $100M (-8%) decrease from the FY 2023 enacted level.

Funding highlights include:

• Requests $171.2M in total Contracting Programs (including 8A, HUBZone, Women’s and Prime/SubK), which is $24.1M above the FY 2023 level.
• Allocates $7.8M for agency-wide telecommunications, an increase of $226K from FY 2023.
• Proposes nearly $133M for the Office of the CIO, $18.1M more than FY 2023.
• Allocates $28.6M for Government Contracting and Business Development operations, a $1M increase from FY 2023.

Total Information Technology and New Development Budgets

For FY 2024, the SBA is seeking $408M 277M for IT spending, a $20M (+5%) increase from the FY 2023 enacted level, but -2% below the final FY 2022 IT budget. (See table below.) In last year’s budget, SBA requested $277M for FY 2023 and at that time reported an FY 2022 enacted budget of $270M, so each yearly amount below has been adjusted upward by SBA in the latest budget request. These restatements or adjustments are common among federal agencies from one budget year to the next, but the magnitude here is noteworthy.

Considering how the SBA allocates their IT dollars across Development/Modernization/Enhancement (DME) efforts compared to Operations and Maintenance (O&M) depicts a picture of fluctuation. For FY 2024, the SBA is seeking $186M in DME funding compared to $198M in FY 2023, reflecting a $12M (-6%) decline from the current FY. However, this puts FY 2024 DME at $26M (+17%) above FY 2022.

As for the details of the DME decreases, roughly $7M of the total $12M decrease for FY 2024 occurs within the Disaster Credit Management Modernization (DCMM) program in the Office of Capital Access. That initiative sees a $2M increase to its total budget, so the lifecycle of the work is shifting to O&M. The remaining $5M in DME cuts are scattered across several other programs.

Noteworthy IT Programs

Looking at the specifics of the SBA’s IT investments and initiatives provides further insight into the agency’s immediate IT investment priorities and direction. Here are the largest five SBA IT initiatives.

• Capital Access Financial Systems (CAFS) – The CAFS initiative supports originating and servicing CARES Act, Disaster, 7a, & 504 loans as well as Small Business Investment Company (SBIC) Program and surety bond guaranty. This budget line receives $169M for FY 2024, a $2.5M (1%) increase from FY 2023 and consists of 91% DME funding.
• Application Standard Investment – This IT budget line within the Office of the Chief Information Officer (OCIO) supports the acquisition, development, management, and operation of software and applications agency-wide. This investment received an $6.3M increase for FY 2024 to reach $35M, up from $29M in FY 2023 and consists of 100% O&M funding.
• Disaster Credit Management Modernization (DCMM) – This investment automates processing and approval for disaster loan assistance by making electronic files available regardless of disaster location. It also provides multiple interaction methods for users, decreasing the cycle time between loan submission, approval, and disbursement. Consistently at or near the top of SBA IT initiatives, DCMM receives $34M for FY 2024, which would be $2M (6%) above FY 2023. This initiative is categorized as 100% O&M funding.
• Delivery Standard Investment – This investment includes costs to monitor, support, manage, and run IT operations and includes IT Service Management (ITSM), (but excludes ITSM costs associated with the End User Standard IT Investment initiative.) This investment receives $33M for FY 2024, an increase of nearly $5M (+17%) from the FY 2023 level and consists entirely of O&M funding.
• IT Security and Compliance Standard Investment – The SBA’s IT Security Program consists of security solutions, operations, situational awareness and incident response, and training and FISMA requirements. The program receives $26M for FY 2024, which is $2.1M (9%) above FY 2023 and is 97% O&M funding.

These five largest IT budget lines together account for $297M or about 65% of the SBA’s total FY 2024 IT budget request, compared to 72% in FY 2023 and 52% in FY 2022. This varying degree of concentration of budget resources indicates a periodic shifting IT environment, as the agency seeks to realize progress in key areas and shift funding to other priorities.

The upward restatement of the current FY 2023 IT budget and growth in the projected FY 2024 budget points to continued opportunities for contracted IT products, services and support for firms with offerings that align with the SBA’s priorities and requirements.