Civilian Agencies to Get $12.5 Billion in FY06

Civilian Agencies to Get $12.5 Billion in FY06

Federal civilian agencies will receive $12.5 billion in fiscal year 2006 (FY06) for development/modernization/enhancement (DME) spending, a 13 percent increase from FY05 according to a Federal Market Analysis TargetView report released today by INPUT, a provider of government market intelligence. DME spending includes new government initiative spending versus existing initiative maintenance and will provide technology vendors additional federal contracting opportunities.

Programs related to federal enterprise architecture and planning will receive the largest year-over-year growth in DME spending with a 28 percent increase from $240 million to $306 million in FY06. Mission area support programs will continue to receive the most DME spending and the largest dollar increase with $9.1 billion in planned spending next year, a 12 percent increase from FY05. Infrastructure, office automation and telecom will see a 16 percent increase in new spending to $2.2 billion in FY06.

Improving IT security deficiencies will remain a priority in FY06. Total spending on IT security for the 18 agencies directed to correct security deficiencies in FY05 will increase 7% from $1.6 billion in FY05 to close to $1.7 billion next year. The Department of Justice and the Department of Homeland Security will see the largest year-over-year spending increases at 20 percent and 17 percent, respectively. “Spending allocated in the IT security budgets of these agencies are development dollars,” said Payton Smith, director, public sector market analysis at INPUT. “Therefore, vendors will see new IT security opportunities continue to emerge throughout FY06.”

In an effort to reduce overall costs of investment and improve business performance, the Office of Management & Budget (OMB) identified five lines of business on which agencies should focus in their FY06 budgets: financial management, human resources management, grants management, federal health architecture, and case management. “OMB identified several agencies capable of providing cross-agency services under these lines of business to promote consolidation,” stated Smith. “Vendors will be allowed to submit proposals and compete against any of these identified agencies and OMB may look to institute a list of capable vendors in the near future.”