Federal IT Spending Expected To Decline

By Christine Kern, contributing writer

Federal IT spending is expected to decline, with the decrease attributed to the Department of Defense (DoD), according to Deltek. An article from the e-Commerce Times states that spending within the civilian sector in 2015 is expected to equal that in 2014, although there will be differences among departments and agencies.

According to Gartner’s Katell Thielemann, the decline in DoD spending is related, in part, to decreased military presence in Iraq and Afghanistan, as well as efforts to operate more efficiently.  “Civilian agencies will be affected in different ways: Some, like the Department of Homeland Security, will be overall flat; some will see slight declines; and some will see continued growth. The Department of Veterans Affairs ... has large ongoing IT needs.”

According to Deltek’s forecast, federal IT spending in 2015 is expected to total $98 billion, down from $101 billion in 2014, and by 2019, annual spending will be around $94 billion. Deltek’s analysis includes major departments and agencies, the intelligence sector, the federal judiciary, and Congressional IT spending.

Gartner has also provided a forecast for projected federal IT spending, predicting a decline for the next few years. Gartner predicts federal IT spending will fall from $70 billion in 2014 to $68.2 billion in 2015, and would not exceed $73 billion again until 2017.

The Obama administration’s budget guidance was the model for both forecasts — with a 2014 enacted amount of $76.4 billion and a budget request of $74.6 billion for Fiscal Year 2015 that begins October 1.

IT solutions providers will find challenges — and opportunities — marketing to departments and agencies making budget adjustments. “The trick for vendors is positioning for those opportunities while avoiding pitfalls and keeping an eye on the shifting landscape,” states Deltek’s report.