IT funding could be last budget survivor, study predicts

Opportunities in federal IT remain viable despite cuts to agency operations

Technology funding is likely to be one of the few survivors of deep federal government funding cutbacks because IT actually helps agencies improve their operations, a new report concludes.

New technologies are on the horizon, from smart hand-held devices to new types of business intelligence aimed at improving federal citizen services, says the IDC Government Insights market report, released March 2, which probes the IT spending proposals in the Obama administration’s fiscal 2012 budget.

The report found nearly the same number of major agencies that are likely to lose money in their IT budgets as those that would get more funds.

In considering 28 of the more prominent departments, 14 of them are expected to decrease in their IT budgets in fiscal 2012, compared to fiscal 2011 estimates, and 13 agencies will actually see increases. Overall, the fiscal 2012 figures predict 0.2 percent growth in IT spending.

“It appears that total IT spending across the federal government will remain fairly steady for the next year. Even if Congress enacts deeper cuts, IT is one of the constants,” according to IDC.

The largest percentage cuts come to the departments of Housing and Urban Development and Education. HUD falls in the largest percentage shift among all the agencies, declining 41.1 percent, or $228 million, from $549.2 million in fiscal 2011 estimates.

Education is predicted to see a 38.2 percent decrease, dropping $406 million to $655 million in 2012.

The biggest winners based on percent increases include the State Department and the National Science Foundation. State is predicted to have an increase of 13.3 percent to $1.41 billion in fiscal 2012. The National Science Foundation will get a 12-percent boost to $100 million.

IDC also notes a background proposal that would add more than 15,000 federal employees in a variety of jobs. However, the research firm says the push for budget cuts will determine how that proposal fares. On the other hand, government officials still must deal with senior employees getting ever closer to retirement, particularly after the economy improves.

“[The] retirement bubble will begin to re-inflate rapidly on the heels of the recession and drive the need to feed a tech-savvier new government workforce that, in turn, will need to substantially ramp up government support services for the forthcoming retirement boom,” the report predicts.

All in all, IDC concludes that IT funding still is viable and opportunities abound for contractors.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Mon, Mar 7, 2011

I wouldn't count on IT surviving the budget axe, the luddites are taking control and none of the rational politicians want to get in their way. When everyone with half a brain knows that both sides should be working on huge restructuring of entitlements. Of course, the only way the republicans can beat Obama, is to put the country back in a recession.

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