Debt ceiling deal impacts IT budgets
June 1, 2023 Leave a comment
What federal IT contractors need to know about the legislation
By Grier Eagan, Senior Market Intelligence Analyst
With the expected passing of the debt ceiling legislation, which locks in federal civilian spending until January 2025, contractors who sell IT to the government face a shifting landscape. While the Federal Civilian FY24 IT budget will cap at $56.4 billion, identical to the budget passed in FY22, opportunities still exist for those nimble enough to adapt.
Despite this cap representing a $6.9 billion decrease from the IT budget originally requested for FY24, IT vendors should take solace in the fact that the FY25 budget will see a marginal 1 percent increase. However, considering the current annual inflation rate of 4.93 percent as per the Consumer Price Index, this means that the federal civilian government will have approximately 4 percent less buying power under the FY25 budget than the FY24 budget.
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that we’ve all heard about over the last few years, and particularly in the last year or so, is a trend toward contract consolidation. Consolidation efforts aren’t targeted at IT only, but are being put into practice across the entire government. Acquisition personnel and business owners are pointing to duplicative contracts and inadequate procurement methods as a major driver of unnecessary government spending and inefficiency. The solution, we’ve been told, is consolidation of common requirements into larger contract vehicles, like multi-agency contracts (MACs) or government-wide acquisition contracts (GWACs); this would enable the government to buy smarter
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