2018 Trump Budget – Boost for IT and Cloud Services Spending

WT Business Beat

By Nick Wakeman

IT modernization gets big boost in Trump’s 2018 budget

Obviously, there is a lot of attention paid to the Trump fiscal year 2018 budget proposal. The document is thick with spending cuts, tax cuts and increases to defense spending.

Looking at it from a macro level, the budget proposal is not much of a surprise. In general, it is in keeping with the priorities set forth in the so-called “budget blueprint” of a couple months ago.

A few highlights to point out:

  • Reverse sequestration for the defense budget. No such luck for the civilian side.
  • IT spending expected to hit $95.7 billion – $42.5 billion for defense and $53.2 billion for civilian.
  • IT modernization language that establishes $228 million fund at GSA.

The language around the modernization fund provides strong support for congressional actions to establish a mechanism for agencies to move away from legacy systems. It starts at the very bottom of page 1064 with most of the details on page 1065 of the appendix.

Of course, the cuts are what are getting the most attention. But taking a very narrow view and just looking at it from potential opportunities, the overall increase in IT spending is positive for contractors as is the emphasis on the IT breakout on modernization.

The modernization language emphasizes that the administration doesn’t just want to swap out old tech for new. “Rather it is a holistic approach to Federal IT that fundamentally transforms how agencies accomplish their missions.”

They want to look at business processes and use the cloud and shared services for more efficiencies.

Category management gets a shout-out as a tool for the government to buy more like a business. The administration also wants to reduce contract duplication and adopt standards.

Cybersecurity is held out as a priority as is cloud adoption and email migration. The budget sets a goal of moving all federal agencies off of agency-owned and operated email systems to cloud-based email. This seeks to reduce costs, improve security and increase productivity. The Trump administration holds up the National Oceanic and Atmospheric Administration and the Justice Department as agencies that made the move and saved millions in annual costs.

Overall, IT fares well in the budget. But there will be agencies getting their programs cut. The impact there will vary from agency to agency and contractor to contractor.

But it is important to remember that this budget is just a proposal. Where the cuts will come, if they come, remains to be seen. We have a long way to go and theoretically only a few months to get there.

Posted by Nick Wakeman on May 23, 2017 at 1:19 PM

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