A Deltek report projects that federal information technology expenditures will drop from $97.7 billion in fiscal 2015 to $94.4 billion in fiscal 2020 as agencies continue to face budget uncertainty and stricter spending oversight.
The company said Thursday its “Federal IT Market 2015-2020″ report examines factors that could affect future contractor-addressable spending on hardware, software, communication, network and IT services.
“Overall market conditions indicate more of a shift in spending priorities and acquisition strategies versus straight-line cuts as we saw when sequestration was first implemented in FY 2013,” said Deniece Peterson, director of federal industry analysis at the Herndon-based market research firm.
“While this will result in overall market contraction, agencies have more freedom to determine how and when budget trimming is necessary,” Peterson added.
Deltek analysts forecast that Office of Management and Budget policies and initiatives to cut duplicative technology spending will prompt agencies to implement cloud computing, automation and infrastructure modernization efforts.
Federal organizations are also projected to increase their budget allocation for the procurement of cybersecurity tools to address enterprise system weaknesses, the report states.