10 hot contracts inside today's tight budgets

Budget numbers can be a bit daunting, but it’s good to remember that there are some large, high profile procurements in the works despite the threat of sequestration, the debt ceiling and general political gridlock.

During its annual Federal Outlook conference, Deltek outlined several upcoming procurements with requests for proposals expected in the next six months. Potential values on these contracts range from a whopping $60 billion ceiling to a low of $23 million.

The $60 billion ceiling belongs to the General Services Administration’s OASIS contract for professional services. Kevin Plexico, Deltek’s vice president of federal information solutions, admitted that the eventual ceiling will likely be lower than that, but I just can’t resist those big numbers.

Here’s a breakdown of the top opportunities

For more information on these contracts, visit Deltek.

While these are all attractive opportunities, they come against a backdrop of fiscal restraint and uncertainty. Neither Plexico nor Deniece Petersen, Deltek’s director of federal industry analysis, offered much hope for an easy resolution.

There are three 2014 budget proposals: one from the Democrats in the Senate; one from the GOP-controlled House; and President Obama’s 2014 budget proposal.

Interestingly, the bottom lines on these budgets aren’t too far apart. Deficit reduction goals over 10 years range from $4.6 trillion to $4.3 trillion. But how you get to those numbers differs widely, and is the reason why many are cynical about anything related to the 2014 budget getting done in a timely fashion.

I think Petersen was being kind when she said she expected at least one continuing resolution before a final budget is passed.

All three groups – the House, Senate and the President – seem to have their heads in the sand because none of the budget proposals factor in sequestration, as if it is going to magically disappear.

Plexico is right when he says a more responsible way to work on the budget is to appropriate up to the sequestration cap; that way, the government can be more strategic about where it cuts the budget.

But even with the cuts and restraints, it is still a huge market. In IT spending alone, Deltek estimates that government will spend $106 billion in 2014. This is down quite a bit from the $124.6 billion in 2012, but much of that reduction comes from cuts in command and control spending and the drawdown in Iraq and Afghanistan.

There are some interesting areas of growth and shrinkage inside those numbers.

For example, spending on IT infrastructure is expected to decline from $4.4 billion in 2012 to $3.6 billion in 2014. The spending on cloud computing is growing, which means that agencies aren’t spending as much on traditional hardware and software.

The private cloud also is winning the day over the public cloud, according to Peterson. Private cloud spending is going from $1.5 billion in 2012, to $1.7 billion in 2014. Meanwhile, public cloud spending by the government stands at $110 million in 2012, and will only reach $118 million in 2014.

Another important budget driver to track going forward is the impact on defense spending as the military pivots its strategic focus toward the Asian-Pacific region.

But with all the numbers related to the budget, it’s important to remember that the 2013 numbers are what’s in the budget, and 2014 is the president’s proposal.

“The actual remains to be seen,” Peterson said. “There are a lot of issues (namely the debt ceiling) that need to be addressed before appropriations will get made.”