Federal IT Spending To Grow Modestly

A 2.8 percent increase is expected by fiscal 2016, with cybersecurity and citizen-engagement leading the way, industry group TechAmerica says.
Federal IT spending will increase a "modest" 2.8 percent over the next five years to reach nearly $100 billion by fiscal 2016, according to an IT industry group.

IT spending by the government will hit $91.3 billion in fiscal 2016, up from $79.6 billion in fiscal 2011, TechAmerica Foundation said. (The federal fiscal year ends Sept. 30.)

The growth will be driven by existing investments, such as cybersecurity and improvements to citizen engagement, joined by new areas, like healthcare, energy efficiency and business intelligence, TechAmerica said.

Spending by the Department of Defense, one of the federal agencies investing the most in IT, will decline by 1.1 percent, from $704 billion in 2011 to $633 billion in 2016, according to the group.

Despite the drop, however, the Pentagon will continue to invest in IT programs, which will contribute to the overall increase in federal IT spending.

The defense IT market is expected to grow by 1.8 percent from FY 2011 to FY 2016, rising from $36.9 billion to $40.3 billion, according to the foundation. Civilian IT spending will rise at a faster clip, by 3.6 percent during that period, from $42.8 billion to $50.9 billion.

DoD IT investment areas that will remain strong include cybersecurity -- a major investment for the federal government as a whole -- as well as IT mobility, surveillance, strike aircraft, intelligence, command and control.

Other agencies also will see their IT budgets growing, according to TechAmerica. The departments of Health and Human Services and Treasury are expected to expand the most, with five-year growth rates of 5.8 percent and 4.8 percent, respectively.

The Obama administration has been aggressive in pursuing IT innovation and attempting to modernize how the government uses technology to engage with citizens through its Open Government Directive and other initiatives.

That investment won't change, but federal IT spending will be tempered because of the uncertain economy, according to TechAmerica.

Like the private sector, the public sector is struggling with a U.S. economic environment that remains uncertain, the group said. It also has the matter of federal debt to confront and will face other pressures in the coming years, according to the foundation.

An agency-wide mandate by the administration to consolidate data centers also will slightly constrain IT spending growth, TechAmerica said.

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