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U.S. Government IT Spending Trends in 2022

8 mins read
government it spending

Ripped straight from a history book—it is not an understatement to say that we live during one historical moment after another.

 

The country has been through a lot, from surviving a global pandemic that paralyzed economies to defending against the threats emanating from other countries. These events have dramatically changed the national landscape. To get on with the times, the federal government is shining the limelight on the research and development of the federal Information Technology (IT) industry.

What are the trends that will affect federal government spending on IT?

Federal spending data points toward that the government is looking into equipping its employees with better tools to for a hybrid work setup.

The big shift towards a hybrid workplace

Millions of Americans were forced to relocate their workspaces when the COVID-19 pandemic struck the U.S. in early 2020. In an effort to mitigate the spread of the virus, businesses shifted into a remote setup to continue their operations.

In fact, even federal agencies were left with no choice but to adopt this new working setup. In 2021, the government awarded five companies a $50 million IDIQ contract to provide flexible working arrangements for its federal employees.

 

With the introduction of the COVID-19 vaccines and the government’s increased efforts to curb the spread of the virus, the cases have started to decrease. And as the health regulations ease up, a new work model is now being introduced—the hybrid work setup. This flexible work model has introduced a myriad of digital co-working and productivity tools, thus increasing people’s dependence on technology.

This huge shift from the conventional workplace is also heavily observed in federal agencies. And that is why there will be an increase in federal government IT spending to improve the efficiency and effectiveness of each agency in this modern work setup.

 

According to the Biden Administration, they will continue to accelerate its Cloud Adoption efforts to equip its federal agencies for telework better. And the government is also looking into exploring Shared Services as well. This means that the federal administration will identify and create centralized capabilities that will benefit not only the people but its network of agencies as well.

According to federal financial data, the government is making moves in fortifying the nation's cybersecurity from all types of digital threats, may it be locally or internationally.

The rise of civilian cybercrimes that threaten the freedom of the internet-reliant society

According to this research by the Pew Research Center, 90% of Americans said that being connected to the internet is an essential need in their lives, and nearly half said that they had found new ways to use the Internet for their day-to-day activities.

 

From hustling for remote work to lying down and streaming movies, being quarantined inside our homes has made everyone spend more time in front of their screens. And with the hours we are spending inside the digital world made us all the more vulnerable to a new kind of threat—cybercrimes.

With the majority of Americans making the shift toward a more digitally-centric lifestyle, criminals have found a way to exploit this increased reliance on the Internet: debit and credit card fraud, identity theft, and even hacking federal government agencies.

 

In 2020, the U.S. government suffered one of the biggest and most complex cyberattacks that the world has ever seen. The hackers targeted the Texas-based software company SolarWinds Corp, whose products are widely used by private companies–and federal agencies. Several federal agencies were compromised during this cyberattack, including the Energy Department and National Nuclear Security Administration, which manages the country’s nuclear weapons stockpile.

A huge chunk of the government IT spending budget will be dedicated to bolstering the federal defenses.

The modernization of defense and warfighting capabilities

As the world accelerates into development, the security risks and threats evolve rapidly as well. Technology and innovation have launched us into a future that is too volatile to predict that threats may arise anywhere—may it be on land, sea, outer space, and even the cyber sphere. So to ensure that America will retain its edge in defense, the Biden Administration is focusing on bolstering its warfighting concepts and capabilities through the modernization of its federal IT infrastructure and procurement of the latest tools and equipment.

How much does the government spend on technology?

In the Biden Administration’s first-ever $6.011 trillion Budget Request, roughly $60 billion is earmarked for federal IT activities for civilian agencies. On top of that, an estimated $20 billion is set aside for DoD’s IT modernization efforts, which mainly focus on bolstering cybersecurity and upgrading warfighting capabilities.

What are the biggest federal IT contracts this 2022?

  1. $15 billion Polaris Information Technology Vehicle

After a delay in its initial solicitations last February, the General Services Administration has confirmed that the Polaris Contract Vehicle will now start rolling soon this year.

 

This government-wide acquisition contract lets federal agencies gain better access to the upgraded cloud, cybersecurity, and software development technologies offered by small businesses. This $15 billion Polaris contract replaces GSA’s Alliant 2 Small Business Contract.

The first wave of solicitations will be prioritizing set-asides for small businesses and women-owned small businesses. Small businesses operating in Historically Underutilized Business Zones (HUBZone) and service-disabled veteran-owned small businesses will also receive pre-solicitation notices in the future.

  1. $11.5 billion Defense Enclave Services Contract

The Defense Information Systems Agency (DISA) awarded the $11.5 billion DES Contract to Leidos. This four-year base contract aims to consolidate DISA’s non-warfighting capabilities, which are also known as the “Fourth Estate.” Leidos will provide mission services centered around enhancing user experience and improving the network’s security and reliability.

  1. $9 billion Joint Warfighting Cloud Capability Program

The Department of Defense experienced major hiccups with Joint Enterprise Defense Infrastructure (JEDI) contract in 2021. And this year, the Pentagon is eyeing a new path for its military’s tech modernization efforts–the Joint Warfighting Cloud Capability (JWCC) Program.

 

Instead of just relying on one cloud provider, which was deemed unsuitable for the nature of the contract, the JWCC will be mobilizing multiple hyper-scale cloud service providers. The Chief Information Officer And Acting Chief Digital And Artificial Intelligence Officer of DoD John Sherman said that the DoD targets to award federal contracts this coming December.

 

The five-year, multi-vendor federal IT contract will provide the Pentagon’s urgent need for cloud services spanning all three security levels. Furthermore, the JWCC program will support the department’s Joint All Domain Command and Control (JADC2) warfighting concept and the Artificial Intelligence and Data Acceleration Initiative (ADA).

 

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