Photographer: Dhiraj Singh/Bloomberg

Contract spending may grow by 1.4 percent, FY 2016 through 2018

July 3, 2017 Paul Murphy

This analysis was first available to Bloomberg Government subscribers. 

Federal government contract obligations are projected to increase by 1.4 percent, from $477 billion in fiscal 2016 to $484 billion, by the end of fiscal 2018, according to Bloomberg Government’s analysis of Office of Management and Budget spending projections. The new estimates are available through our updated federal Market Forecast Dashboard.

Twenty-five of the 69 measured agencies are expected to grow their fiscal 2016 obligation levels through the end of fiscal 2018. The Defense Department, which is projected to increase contract spending from $306 billion to $313 billion, leads the list.

Of the larger agencies, only the Veterans Affairs Department is projecting double-digit growth (10.2 percent). Single-digit growth is expected at the Office of Personnel Management (6.1 percent), the General Services Administration (4.1 percent), the Transportation Department (3.2 percent), and the Department of Energy (2.8 percent).

Agencies expecting to shrink spending include the Environmental Protection Agency (-27.7 percent), and the departments of Housing and Urban Development (-23.5 percent), Commerce (-19.0 percent) Education (-17.8 percent), and Agriculture (-17.7 percent).

GSA Category Management markets with heavy defense components can expect steady growth. Research and Development is projected to grow 15.5 percent on the back of a $6 billion DOD spending surge. The Medical category is predicted to increase by 8.1 percent, also fueled by strong DOD spending. The Aircraft, Ships/Submarines & Land Vehicles sector projects 7.2 percent growth, followed by Weapons and Ammunition (6.7 percent), and Electronic and Communication Equipment (6.2 percent).

The forecast groups five major government activities with international missions under International Assistance Programs. IAP includes the U.S. Agency for International Development, the Millennium Challenge Corp., Overseas Private Investment Corp., the Peace Corps, and the U.S. Trade and Development Agency. Together they are projected to increase contract spending by 12.3 percent by the end of fiscal 2018.

Using the Dashboard

Our Market Forecast Dashboard applies the relative, year-over-year increases in the Office of Management and Budget’s predicted contract spending through fiscal 2018 to reported fiscal 2016 contract spending totals. The results are broken down by agency, various market classifications, geography, and more to help you visualize a market’s growth potential.

The update incorporates an enhanced methodology that applies refined forecast multipliers to each agency’s specific market spending patterns. Spending forecasts are available by agency and bureau, GSA Category Management category, Contract Title, Product Service Code and NAICS classifications, as well as visualizations by congressional district.

Want to learn more? Let us show you around. Try a demo.

×
NEXT
Bright future for federal artificial intelligence use