Pentagon’s Digital Services Spending Rises Rapidly: This Is IT

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Responding to a law that requires U.S. government websites to provide a better online experience for Americans, the Pentagon has boosted its spending on digital services.

The 21st Century Integrated Digital Experience Act was signed into law in December 2018, and requires federal agencies to modernize and examine how Americans interact with their websites.

In fiscal 2016, the Defense Department spent $100 million on citizen-facing digital services, the online tools that allow the public to interact with federal agencies through web or mobile applications. In fiscal 2021, the market will surpass $200 million, according to Bloomberg Government projections, and DOD could spend as much as $250 million.

In the defense space, digital services make it easier for active duty personnel and family members to interact with Defense Department websites and forms for health care, moving and housing, financial resources, and other services.

The Pentagon has spent more than half a billion dollars in the market since fiscal 2016, with obligations increasing each year. Historical increases of about 18% annually suggest that DOD will spend about $196 million in fiscal 2020 and $232 million in fiscal 2021 on citizen-facing digital services.

Despite the rise in spending, not all defense websites are modern and user-friendly. The 2018 law requires that new and updated websites meet minimum usability requirements and that agencies make public-facing forms and applications digital within two years. Agencies must also review existing websites and submit a report to Congress within a year that includes which websites are used by the public, which are in need of modernization, and what it would cost to modernize them.

Agencies must continue reporting for an additional four years after the initial reports, which indicates this modernization could extend into at least fiscal 2024. The law didn’t provide funding but did suggest including funding for digitizing forms in agency budget requests, and it appears that DOD has followed those instructions for fiscal 2021. In the fiscal 2021 information technology budget, the Pentagon requested additional money for programs that support a website or digital service, a new filter in the fiscal 2021 IT budget. The fiscal 2021 budget request is $5.2 billion, up from $4.6 billion in fiscal 2020 and $4.7 billion in fiscal 2019. The largest budget increases are in the Navy and Defense-wide agencies.

The increases align with the rise in contract obligations. In BGOV’s category of Other Defense Agencies — which includes the Defense Logistics Agency and Defense Information Systems Agency — obligations increased to $65 million in fiscal 2019 from $41 million in fiscal 2018. Navy obligations are up to $33 million in fiscal 2019 from $7 million in fiscal 2018. These agencies and offices are the ones to watch for opportunities.

Use Bloomberg Government’s opportunity search to find digital services opportunities. There are currently almost 500 open digital services-related solicitations or expiring contracts and task orders at the Pentagon.

What’s Ahead

In addition to the analysis and reporting required by 21st Century IDEA, Congress says there is more work to be done. In the Senate Armed Services Committee report that accompanies the Senate version of the fiscal 2021 National Defense Authorization Act, 21st Century IDEA is an item of special interest. The report says the committee supports the goals of the law and directs the DOD chief information officer to issue a report on the agency’s implementation of the law within 90 days of the enactment of the 2021 NDAA. If that requirement makes it into the final NDAA bill, additional opportunities could arise based on the assessment of the agency’s implementation status.

Note: This Is IT is a weekly column by Bloomberg Government focused on information technology matters affecting government contractors.

To contact the analyst: Laura Criste in Salt Lake City, Utah, at

To contact the editors responsible for this story: Daniel Snyder at; Jodie Morris at

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