State Department and USAID FY 2022 Budget Request Observations

The Office of Management and Budget (OMB) has released its completed fiscal year (FY) 2022 budget request and the Department of State (DoS) and the U.S. Agency for International Development (USAID) together rank among the highest-funded civilian departments. State is also among the civilian departments requesting a double-digit budget increase for next fiscal year.

Total Discretionary Funding and Priorities

The State Department and USAID have experienced budget fluctuations over the last several budget cycles, but the FY 2022 budget places them on the upswing. At the topline discretionary level, the president’s budget provides $58.5B is for the Department of State and USAID, a $5.5B (+10%) increase from the 2021 enacted level.

Funding highlights include:

• Allocates $5.4B, a $279M increase, for Diplomatic Programs that support overseas daily operations at U.S. embassies, consulates and diplomatic missions around the world.
• Supplies $4.1B for Worldwide Security Protection (WSP), $315M above the FY 2021 enacted level.
  • Includes +$26M for cybersecurity enhancements, $7.0M for Data Loss Prevention (DLP) and $19M to enhance cyber security monitoring programs.
• Requests over $1.9B for Embassy Security, Construction and Maintenance, including $1.1B for security upgrades.
• Provides $1.3B for USAID operating expenses to support personnel in 87 missions ($150M above FY 2021).

Information Technology Budgets

The State Department’s FY 2022 IT budget request is nearly $2.8B, which would be a $199M (+7.8%) increase from the FY 2021 enacted level and $138M (5.3%) above the FY 2020 level. USAID’s FY 2022 IT budget request comes in at $263M, placing it $7M (+2.8%) more than FY 2021 but $5M less than FY 2020. Given their projected increases in total discretionary budgets it is not surprising that their IT budgets would follow a similar trajectory.  

Like other federal agencies, both DoS and USAID allocate a portion of their total IT budgets for new development spending, known as Development, Modernization and Enhancement (DME). For FY 2022 State allocates $401M for DME, which is flat for the new fiscal year and down 34% from FY 2020. This contrasts significantly with USAID’s proposed 55% DME increase to reach $70M for FY 2022. Taken together, State and USAID represent $471M in combined DME. (See table below.)

Noteworthy IT Programs

The details of the State Department’s and USAID’s IT investment priorities and initiatives provides some perspective on where they are planning to invest in FY 2022. These are a handful of initiatives that stand out among others due to their relative size.

• Bureau IT Support: This investment encompasses centrally provided shared IT support services such as desktop services; telecomm, wireless & data services; peripherals; software; and any other IT infrastructure costs incurred by the bureaus. It receives an aggregate $615M for FY 2022, which is 4% below FY 2021 and is made up of 19% DME. Historically, Bureau IT Support had been listed as a single large initiative, but beginning with the FY 2020 budget Bureau IT Support was broken out by 33 bureaus, offices, etc. offering the same IT infrastructure support to each. It is re-aggregated here to show the comparative size and influence of these effort on the State Department’s IT landscape.
• Consular Enterprise Infrastructure & Operations: The initiative provides 24 by 7 operational support, infrastructure management, HW/SW maintenance, technology refreshes, upgrades, technical services and training to support consular systems and services worldwide. Funding of $299M for FY 2022 would be a $35M (-10%) decrease from FY 2021, continuing its downward trend from the $375M spent in FY 2020. The FY 2022 amount consist of 10% DME funding.
• Enterprise Network and Bandwidth Services: Designs, operates, maintains, secures, and modernizes the DoS IT network infrastructure and systems, enabling collaboration and information sharing across DoS and its foreign affairs partners. It receives $254M for FY 2022, an increase of $52M (+26%). This initiative is 100% Operations and Maintenance (O&M) funding.
• Deployment, Maintenance, and Refresh Services: Ensures domestic and overseas IT equipment is routinely updated, relocated, and/or replaced. Service includes procuring, deploying, and maintaining upgraded workstation/software packages, server, telecommunications, radio, and video collaboration. This initiative receives $210M for FY 2022, a $55M increase and is categorized entirely as O&M.
• Enterprise Licensing: This initiative addresses lifecycle management of State’s Bureau of Information Resource Management (IRM) 400 existing IT agreements, many of which are unmanaged, or are otherwise inactive. The budget line receives $159M for FY 2022, which is a $29M (+22%) increase from FY 2021, and is comprised of 73% DME funding.
• IT Security and Compliance: This USAID investment supports setting IT Security policy, establishing process and means, measuring compliance and responding to security breaches. The $33M for FY 2022 represents a $2M (+8%) increase from FY 2021 and consists of 32% DME funding.
• AIDNET: This USAID budget investment supports access to AIDNet as the agency’s primary operating network. It receives $24M for FY 2022, which is an $8M (+53%) increase and consists of 59% DME.

These large budget lines reveal that their priorities continue to focus on infrastructure and operational requirements. However, pockets of new development and growth within such programs indicate ongoing efforts to modernize IT infrastructure for mission support. According to its IT budget submission to OMB, the State Department plans acquisitions in FY 2022 for 45 programs and USAID plans acquisitions for 22 programs, representing $1.5B (55%) and $219M (83%) of their respective total IT budget requests.

Cybersecurity is also a major priority at the State Department, which plans a 40% increase in its cybersecurity budget for FY 2022. State would also receive $101M of the $750M Cybersecurity Reserve funding requested by OMB to aid the nine federal agencies adversely impacted by the SolarWinds incident.