What Contractors Need to Know about the Proposed FY16 Budget

Like many, we here at the IT Alliance for Public Sector (ITAPS), a division of ITI, have been studying President Obama’s proposed $4 trillion fiscal year 2016 budget in-depth since it was released this week to offer greater insights for the federal acquisition community. Upon deeper study, much of the budget the Obama administration submitted to Congress is good news for contractors, who would see small gains in IT spending.

The budget also breaks the caps for both defense and non-discretionary spending and there is an appetite in Congress to address the issue of sequestration. A majority of agency budgets would receive small increases with some exceptions such as the Army Corps of Engineers and the Department of Housing and Urban Development. Overall, the government is expected to spend around $86.4 billion on technology in FY16, which is a 3 percent increase.

The budget proposed for government IT continues to build upon the administration’s plans to increase efficiency and productivity using today’s most innovative technologies. It includes funding for new agency digital services teams, oversight of IT spending, reforms to procurement technology, and strengthening agencies’ cybersecurity position.

According to the Federal IT Spending for Budget Year 2016 that contains the IT investment details, about 23 percent would be spent on development, modernization and enhancement, while 78 percent would be spent on operation and maintenance. The Department of Defense’s technology projects would receive $37.3 billion, including $6.6 billion for classified projects, and federal civilian agencies would receive $49.1 billion. The agencies receiving the largest increases in the budget proposal include Department of Labor, Department of State, Department of the Treasury, the Office of Personnel Management, U.S. Agency for International Development, and the Environmental Protection Agency.

These are some more specific items of interest to contractors called for by the president’s proposed budget:

  • PortfolioStat: The budget will expand the PortfolioStat program, which streamlines major IT projects
  • Agile Development: The administration will continue to push the use of agile development practices for projects and move away from waterfall development techniques that have caused delays and cost overruns.
  • Data Centers: To continue the government's efficiency in IT plans, the president's budget encourages the continued consolidation of data centers.
  • Cloud computing:  The budget continues to prioritize the shift by federal agencies to cloud computing services to drive efficiencies and eliminate duplicative services to save taxpayer funds.
  • Digital Services: The administration is proposing $105 million to hire 500 people government-wide to expand the U.S. Digital Services (USDS) teams to 25 agencies; implementing the Digital Services Playbook and TechFAR; bringing in small startups and increasing the threshold for IT purchases to $500,000; and, including $35.2 million in funding for IT Oversight and Reform to scale up the central USDS team to aid in building the agency teams, increase oversight and accountability for IT spending, improve IT procurement, and improve agency cybersecurity and cyber readiness.
  • Cybersecurity: The president’s budget proposed $14 billion in cybersecurity funding, including $582 million for implementing the Continuous Diagnostics and Mitigation program; $149 million for outreach to the private sector to improve cybersecurity posture; $243 million for cyber research and development; $514 million for cyber intrusions investigation and funding for a new White House Cyber Unit to oversee dot-gov network security; and implementation of the recently enacted FISMA Modernization Act (click here for our recent FISMA analysis).
  • National Security: The president’s proposed budget increases defense spending to $585 billion, including $37.3 billion in funding for IT spending to modernize the military and its aging systems.
  • Workforce: The budget focuses heavily on improving the federal workforce and dedicating resources to narrow the current gap in skills and experience for mission-critical occupations such as IT-Cybersecurity Specialists and Acquisition Specialists.

Of course, this is a proposed budget to Congress, so it is only the beginning of the appropriations process. Still, we are pleased that the president continues to push and adopt innovative technologies to help solve problems and prepare for the government of the future. ITAPS continues to urge policymakers to use a forward-thinking approach to maximize technology’s greatest abilities to serve the government and its citizens, and make needed reforms to the current procurement system that too often holds that goal back.  

Public Policy Tags: Public Sector

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