The Office of Management and Budget (OMB) released its fiscal year (FY) 2027 budget request last month and the Department of State (DoS) receives significant budget resources while continuing its organizational, fiscal and programmatic reforms.

State Department FY 2027 Total Discretionary Funding and Priorities

The FY 2027 International Affairs budget request provides $35.6B in total discretionary funding for the Department of State and other international programs, 30% below the FY 2026 estimated level. This total discretionary amount is comprised of $22.8B for Foreign Operations (-$11B), $12.7B for Diplomatic Engagement (-$3.3B) and $100M for other related activities.

Below are some budget highlights from several State Department bureaus and other operational areas, along with examples of technology investments described within their budget justifications sent to Congress.

• Diplomatic Programs. Contains $9.4B for Diplomatic Programs, a $45.2M decrease from FY 2026. The total includes $5.2B to support daily operations at U.S. embassies, consulates and diplomatic missions around the world and $4.1B for Worldwide Security Protection.
• America First Opportunity Fund. Proposes $5.0B for a new America First Opportunity Fund (A1OF) to address core national security interests including mass illegal immigration, critical mineral supply chains and countering adversarial expansion.
• Global Health Programs. Provides $5.1B for global health programs, a $4.3B decrease from the FY 2026 estimated level. The budget restructures GHP around the America First Global Health Strategy (AFGHS) and for efficiencies.
• International Narcotics Control and Law Enforcement. Includes $1.2B for INCLE to counter narco-terrorists, cartels and transnational criminal organizations.
• Critical Mineral Supply Chains. Proposes nearly $13.0B in financing and dedicated resources to rebuild and secure critical mineral supply chains to increase American mineral production and re-industrialize the nation.

State Department Information Technology and Cybersecurity Budgets

For FY 2027, State is requesting $3.8B in total funding for Information Technology (IT), a $630M (+20%) increase from the estimated FY 2026 level, but $195M (-4.9%) below the final FY 2025 budget level. In addition, State is planning to spend $809M on department-wide cybersecurity activities, an increase of $174M (+28%) from the FY 2026 estimated level.

Some useful IT-related details in the larger Foreign Affairs discretionary budget justification linked above include:

• IT Capital Investment Fund. Provides nearly $414M for State’s FY 2027 ITCIF, a $13.9M increase (+3.5%) from FY 2026.
  • New CIF programs include $1.7M for a Budget Formulation and Planning System (BFPS), $2.4M various financial systems initiatives supporting Comptroller and Global Financial Services (CGFS) operations and $1.2M for ClassNet Modernization at the Bureau of Diplomatic Technology (DT).
• Security Operations Center. Supplies $40.6M (+35.6M) for a new SOC for the Bureau of Intelligence and Research (INR) to provide 24/7 network monitoring and cyber threat response.
• Human Resources Information Technology. Allots $13.9M for the Human Resources Information Technology (HRIT) 2.0 initiative to transition to OPM’s new consolidated Core Human Capital Management (Core HCM) system.
• Diplomatic Technology. Supports the Diplomatic Technology bureau with $188M for Enterprise Software License and Maintenance, $50M for USAID integration; $43M for cybersecurity operations and $34M for AI.

Shifting Federal IT Budget Reporting is Underway

For the second budget cycle running, OMB has not released programmatic details of agency IT budgets for FY 2027, only releasing summary tables for agency topline IT and cybersecurity budgets. Further, OMB recently posted a notice to the IT Dashboard that they are sunsetting the site as it reevaluates and reforms the best means of “providing a credible, accessible window into IT spending, performance, and decision-making.” In the meantime, “agencies will pivot to a streamlined state that refocuses on statutorily required data” that will continue to be made publicly available. OMB did not provide a timeline for this, so we will be watching for what comes next.

Final Thoughts

Under the current Trump Administration, few federal departments have been undergoing as much organizational and operational change as the Department of State. However, while overall contract spending at State experienced reductions from FY 2024 to FY 2025, spending on IT contracts increased 4.5% at the same time. This continues to signal that contracting opportunities will continue to exist, and IT systems require ongoing support and modernization. Some of these are noted above.

Companies looking to sustain or grow their State contracting work in this shifting landscape must leverage strong market intelligence and competitive data to remain competitive and position themselves for success.