The FY 2020 Federal Budget and IT Spending Trends

Kevin Brancato
September 4, 2019 | 4 min read

As the largest IT buyer in the world, the United States government spends over $87 billion dollars on IT goods and services a year. Information technology (IT) plays a vital role in helping our government deliver a wide range of services and information to the public. Here we’ll take a look at the IT Spend for the Federal FY 2020 Budget with allocation by agency. We’ll also point you to resources where you can learn more about initiatives the government is putting in place around its acquisition programs—so that you can better position your business to capture more contracts next year.


Federal IT spending for 2020 is projected to be nearly $88 billion, with the breakdown between the Department of Defense (DOD) and non-defense agencies shown in table19-1.

FY2020 Budget Federal IT Spending
Source: The OMB, Analytical Perspectives, chapter 19 “Information Technology”

The Depart of Homeland Security (DHS) is the largest civilian agency in IT spending, representing 13.9% of the total Federal civilian IT spend, while the bottom 12 agencies represent 8.2%.  For a complete breakdown of 2020 Civilian Federal IT Spend by agency see table 19-2 below.

Estimated FY 2020 Civilian Federal IT Spending by Agency
Source: OMB, Analytical Perspectives, chapter 19 “Information Technology”

Although the FY 2020 Budget includes funding for over 7,500 IT initiatives at agencies, the largest 100 of these account for 44 percent of Federal IT spending. To increase visibility into the performance of these initiatives, the Office of Management and Budget (OMB) requires that agency CIOs provide risk ratings for all major IT investments on the government IT Dashboard website, as well as provide information on how the risks for major development efforts are being addressed and mitigated.


Due to the complexity of the IT landscape, government agencies are often inefficient when it comes to acquiring, developing, and managing Federal IT investments. Three ways the government is attempting to improve efficiency and leverage its spending power is through IT modernization, cloud adoption, and acquisition standardization and consolidation.

Due to the complexity of the IT landscape, government agencies are often inefficient when it comes to acquiring, developing, and managing Federal IT investments. Three ways the government is attempting to improve efficiency and leverage its spending power is through IT modernization, cloud adoption, and acquisition standardization and consolidation.

1) IT Modernization: Agencies have been attempting to modernize their systems but have been stymied by a variety of factors, including resource prioritization, problems procuring services quickly, and various technical issues. IT modernization encompasses a wide range of strategies and technologies to address these challenges. With IT modernization, the government is striving to modernize and consolidate its networks and use of shared services across agencies. Learn more about IT Modernization and how it relates to IT spend by reading The Report to the President on IT Modernization.

2) Cloud Adoption: Cloud computing impacts almost every aspect of federal IT spending, but the approach agencies take when moving to the cloud can vary widely. Earlier this year, the Federal CIO Council published an Application Rationalization Playbook intended to help agency IT program managers determine which applications to migrate to the cloud based on cost, functionality, governance and other concerns. Agencies are asking contractors they work with to follow this guidance. For more information read the Federal CIO Council’s Application Rationalization Playbook.

3) Acquisition Standardization and Consolidation: To increase efficiencies and eliminate redundancies the government is implementing a system of “category management” in its acquisition programs. Category management is outlined in the OMB M-19-13 executive memorandum. Basically, the way it works is that government experts for each category help agencies increase the use of common contracts and practices to bring alignment and efficiencies to government acquisition programs. This helps agencies consolidate buying power and focus attention on ways to more effectively modernize information technology systems to improve data quality, security, accountability, and transparency.


Although the federal IT budget has been growing modestly year over year, much is changing in the way the government plans to procure IT technologies and services.  It’s important to keep up with changing policies to ensure your solutions and services are meeting these new acquisition requirements and processes. The TechnoMile was designed to help government contractors identify, qualify and win new business faster, utilizing business intelligence, automation, and artificial intelligence to drive growth, compliance, governance, and operations excellence across your organization. In an increasingly competitive environment, learn how TechnoMile can help you grow your business faster.

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