OMB Projects Civilian IT Spending Growth in FY20

By Greg Waring   •



The Office of Management and Budget (OMB) estimates that civilian and Department of Defense unclassified IT investments in the President’s FY20 budget total $87.2 billion, less than a 1% cut from estimated FY19 totals. Considering that, on the civilian side, the budget proposes to implement the FY20 sequester required by the Budget Control Act — a $62 billion cut to civilian appropriations (including $8 billion in OCO funds) compared to the current year — relatively flat IT funding could be a sign of relief. A closer look at the data reveals that the IT opportunity in both FY19 and FY20 is likely larger than advertised. 

Why do we believe IT funding in OMB’s data is understated? For one, some agencies reported FY19 IT estimates to OMB before final appropriations were enacted. Those civilian agencies ultimately received more funding in FY19 than planned. Similarly, we expect FY20 budget negotiations to increase IT funding above the President’s FY20 request, particularly for civilian accounts.

IT funding grows on the non-defense side of the budget even under the President’s plan to implement the FY20 sequester on civilian accounts. At $51.1 billion, the President’s FY20 IT request is a 2% increase over estimated FY19. Current year FY19 estimates are a 2.8% increase over FY18. The FY19 estimate will grow. Some of the largest IT-intensive civilian agencies received their final appropriations after OMB prepared the budget. For example, the Department of Homeland Security — the largest IT spend of civilian departments — received an unexpected increase in FY19 technology funds, including imaging, surveillance, and other detection technology for the U.S. Customs and Border Patrol. If negotiations later this year between Congress and the White House lead to another round of technology increases for border security, the FY20 DHS IT total will rise again. 

Agencies have accelerated migration to cloud email and collaboration services. Over 70% of Chief Financial Officers (CFO) Act agency mailboxes have migrated, substantially reducing the Federal Data Center footprint while increasing security through standardization.

President’s Management Agenda: Celebrating One Year of Progress, March 20th

In contrast, the Department of Defense unclassified FY20 IT funding ($36.1 billion) shrinks 4.7% based on public reporting. The trend is not surprising given the Administration’s focus on military personnel and large platform investments. Moreover, various IT modernization and cybersecurity guidance from the White House has largely been focused on civilian agencies instead of the Pentagon. Even adding in aggregate classified IT funding from other DoD sources, total FY20 defense IT is a 1.7% cut compared to the current fiscal year.

Civilian IT funding remains an opportunity despite the looming budget cliff all departments and agencies face next fiscal year. Modernization — especially automation and shared services — has been a White House policy priority from the start of the Trump Administration. Funding increases in FY18 and FY19 support that effort. Those initiatives are important continued investments with budget uncertainty ahead.


OMB estimates understate FY19 and projected FY20 civilian spending and overstate likely FY20 DoD spending