Trump’s FY 2020 Budget Gives Civilian IT Modernization a Boost

The Trump administration appears to be taking the need for technology modernization seriously. President Donald Trump requested an unprecedented $87.8 billion for unclassified IT in fiscal 2020, according to documents released March 18, and in the past two years federal agencies have been getting more money for information technology than they expected.

The topline figure represents a modest decrease from the $88 billion federal agencies are projected to spend in fiscal 2019. But compared with the amount of funding government technology leaders thought they would receive at this time last year – especially those in civilian agencies – the fiscal 2020 IT budget reflects critical investments in technology modernization.

Federal agencies are making significant investments to build new services in the cloud and migrate existing applications, according to a senior administration official who asked not to be named. These investments will also support technologies such as automation, robotics, artificial intelligence, and natural language processing, the official said.

Civilian Agencies Are IT Budget Winners

The president’s fiscal 2020 budget request includes $51 billion in IT funding for civilian agencies, substantially more than the $45.8 billion the White House requested for civilian IT in fiscal 2019.

The Defense Department will receive $36.8 billion in unclassified IT funding, a modest decrease from the $37.9 the Pentagon expects to spend in fiscal 2019. The request did not offer a figure for classified IT spending.

FY_2020_IT_Budget_Graph_032019

These funding increases are necessary to support up-front investments in emerging technologies, while at the same time maintaining the legacy systems that are key to agency operations. Federal agencies are running a number of IT systems that are more than 20 years old, and in the long run the costs of maintaining them are higher than transitioning them, the official said.

There’s a multibillion-dollar difference between what civilian agencies expected to receive in last year’s budget and the amount Congress actually enacted. In its fiscal 2019 request, the Trump administration sought $45.8 billion for fiscal 2019, a figure in line with the $45.6 civilian agencies were projected to spend on IT in fiscal 2018.

The 2020 IT budget request instead shows that civilian agencies spent closer to $49 billion in fiscal 2018 and are projected to spend more than $50 billion in fiscal 2019.

One explanation for the FY 2019 jump lies in the compromise that followed a month long partial government shutdown in from Dec. 22 – Jan. 25. Although the president had sought to boost spending at the departments of Defense and Homeland Security while slashing civilian agencies’ budgets virtually across the board, lawmakers reached a compromise that guaranteed sizable budget increases for both civilian agencies and the Pentagon in February. With higher enacted funding at their disposal, agencies are spending more on information technology.

These figures are consistent with the surge in IT contract spending agencies reported in fiscal 2018, a combined $64.8 billion at civilian and Pentagon agencies, which is almost 10 percent more than they spent in fiscal 2017. If the White House projection for fiscal 2020 holds, more contract spending is on the way.

As the government “unburdens” itself from its legacy systems, the official said, there may be opportunities to not only take a step forward, but also leapfrog a few steps and take advantage of what’s available in the private sector.

Chris Cornillie is a federal market analyst with Bloomberg Government.

To contact the analyst on this story: Chris Cornillie in Washington at ccornillie@bgov.com

To contact the editors responsible for this story: Daniel Snyder at dsnyder@bgov.com; Jodie Morris at jmorris@bgov.com