President Obama’s budget proposal for the 2014 fiscal year starting in October would boost spending on information technology by about 2 percent, as the government looks to ramp up cybersecurity work.
Obama recently issued an executive order directing federal agencies to develop a framework for combating cyberattacks on critical public and private infrastructures and increase the amount of information that is shared about threats.
The president’s budget request allots more than $13 billion to cyber programs, nearly 16 percent of a federal IT budget totaling about $82 billion.
The proposal would also continue federal initiatives such as moving more data to Internet-based “cloud” systems and consolidating redundant data centers. The administration said its IT projects should help the government do more with less by improving productivity, lowering the cost of operations and streamlining services, “all while bolstering cybersecurity.”
“For the first time, they’re talking about laying out policies around cyber,” said Alan Chvotkin, executive vice president of the Professional Services Council, a contracting trade group. “While they don’t describe [exact] numbers for cyber-spend, it covers four to five pages of the budget. From a policy standpoint, it reflects the discussion and concern the administration places on cyber.”
Under Obama’s proposed budget, the Defense Department would invest more than $39 billion in IT, with major civilian agencies combined spending about $42 billion. Specific allotments include $300 million for the Homeland Security Department to support better monitoring of federal networks, $85 million to the Commerce Department for cyber-network support, and $79 million to help the departments of Homeland Security, Justice and Defense to better identify and respond to cyber incidents, according to a separate report from U.S. Chief Information Officer Steven VanRoekel.
The modest boost comes after federal administrators sought to rein in spending after a number of big projects ran over budget and took far longer to complete than originally planned. As a result, the federal IT budget was pared back by almost $300 million in the first half of the 2013 fiscal year.
“A key lesson learned is that agencies should evolve their IT portfolios to deliver IT ‘as a service,’ ” VanRoekel wrote in a recent blog post. Instead of buying dedicated hardware and software, “the service delivery model entails agencies deploying their IT like a business, optimizing it for consumption agency-wide.”
For instance, cloud computing offers a more flexible alternative to “often stove-piped, capital IT investments,” he wrote.
The shift has roiled the IT industry, forcing some big contractors to shift strategy and opening the door to new players.
“We don’t play in [the infrastructure] side. We’re more in the operations and applications side,” said Mike Binko, president and chief executive of Kloudtrack, an Annapolis-based cloud computing firm.
Obama’s proposal is one of at least three competing budget plans in Washington. Even before the president laid out his vision, the Republican-led House and Democrat-led Senate separately approved their own spending blueprints, all of which have yet to be reconciled.
All three major proposals are “pretty much in line with each other, directionally,” in terms of their investment in IT, said
Deniece Peterson, director of federal industry analysis at Deltek, a software contractor based in Herndon.
The White House budget provides the most granular discussion of IT projects and budgets, but the House proposal is “a little kinder to defense,” Peterson said, noting that the Pentagon is one of the biggest IT spenders. The Senate proposal mentions a general push for investments in cybersecurity to “help ensure that our grid is safe from foreign attack.”
“None of the proposals are especially harmful [to IT]. I think it depends on where the contractor sits — if they’re a defense contractor, they’re going to look at the House version,” Peterson said.
Uncertainty about the budget could ultimately be a silver lining for the IT sector, particularly technologies meant to improve efficiency in government operations, said Trey Hodgkins, senior vice president of global public sector of TechAmerica, a technology association based in Washington.
“You can demonstrably achieve more with less if you harness IT, you can replace lost capabilities, you can expand capabilities by taking legacy systems into the cloud,” he said.
IT firms looking to win contracts in an uncertain fiscal environment, he said, will “need to demonstrate to the customer that [they] can generate savings by producing or adopting services, like ‘bring your own device’ or Big Data analytics.”