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Federal Contracting Outlook Amid Covid-19

The response to the Covid-19 outbreak is likely to boost spending in the majority of key federal contracting market verticals.

This analysis takes a closer look at the impact of the virus on the information technology, professional services, research and development, medical supplies and services, and architecture and engineering markets. The report examines comparative spending since the onset of the pandemic, top agencies and companies in terms of obligations, and an end-of-fiscal-year outlook for each market.

Highlights include:

  • Information technology spending is surging as agencies have been forced to adapt to telework.
  • Research & development spending is down slightly, as agencies restrict non-essential spending.
  • Professional services obligations appear to be up in March and April, but this may reflect payments on a handful of large contracts.
  • Spending on medical supplies and services in March and April was almost double what it was in fiscal 2019.
  • Architecture & engineering spending rose slightly in April, largely buoyed by FEMA spending.
  • Coronavirus is unlikely to halt fiscal 2020 spending, which is forecasted by Bloomberg Government to surpass $600 billion.
  • CARES Act funding is likely to add supplemental funding to fiscal 2020 appropriated funds governmentwide, which could result in fourth quarter spending levels in excess of $200 billion.

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