DOD cuts will slow overall fed IT spending growth
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Federal spending on IT will increase slightly in the next five years. Who can expect to see their budgets grow and who faces cuts, according to new TechAmerica Foundation Vision survey forecasts.
Federal spending on information technology will increase slightly in the next five years even as overall defense spending declines, a new TechAmerica Foundation Vision Survey forecasts.
Growth is likely to be constrained by deficit-cutting measures and uncertainty related to program freezes and the consolidation of data centers, the survey states.
Similarly, defense spending is likely to decline in the face of budget cuts driven by an uncertain global economy, a focus on domestic priorities and efforts to reduce deficit spending.
The foundation’s 46th annual five-year survey of federal IT spending predicts a modest compound annual growth rate of 2.8 percent in current dollars, from $79.6 billion in fiscal 2011 to $91.3 in fiscal 2016.
Meanwhile, a 10-year Defense Department forecast predicts spending in current dollars will drop 1.1 percent, from $704 billion to $633 billion in fiscal 2021.
When inflation is taken into account, the defense topline is expected to decline to $512 billion in constant dollars (i.e., in terms of the buying power of fiscal 2011 dollars) by 2021, according to TechAmerica.
Breaking down all federal IT spending, the foundation projects the defense IT market will grow 1.8 percent between fiscal 2011 and 2016, increasing from $36.9 billion to $40.3 billion in current dollars.
Stable areas of investment at DOD are expected to include Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance; IT mobility; cybersecurity; and unmanned multirole, surveillance, and strike aircraft.
Civilian IT spending is expected to grow 3.6 percent during the same period, from $42.8 billion to $50.9 billion.
The Health and Human Services and Treasury departments are projected to have the fastest growing IT budgets, with five-year growth rates of 5.8 and 4.8 percent respectively.
New drivers for growth in IT budgets include health care, energy efficiency and business intelligence. They are expected to join improvements to citizen services, cybersecurity and other established sources of demand, respondents told TechAmerica.
The Vision forecast is based on analyses of publicly available data and not-for-attribution discussions with hundreds of senior-level federal agency leaders, congressional oversight committees, think tanks and industry representatives about their expectations for spending during the five- and 10-year periods.
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