Budget

Civilian agencies guard their coffers as cuts loom

illustration dollar sign in vise 

Civilian agencies won't see the dramatic spending cuts proposed by the Trump administration at least for a few months, with a continuing resolution expected to fund the government through Dec. 15.

But agencies are behaving as though cuts are coming, according to SAIC CEO Tony Moraco.

On a Sept. 7 earnings call with analysts, Moraco reported that "several of our civilian customers are reacting to proposed [2018] budget shifts."

"These customers are sustaining operations but are suspending enhancement activities such as technology upgrades and IT modernization," he said, noting that SAIC's lower quarterly profitability are in part due to these spending reductions. The company's revenues remained basically flat, with a one percent decrease.

The Trump fiscal year 2018 budget called for double-digit spending reductions at the Departments of Transportation, Education, Housing and Urban Development, Interior, Labor and State, and at the Environmental Protection Agency. At EPA, the administration proposed a 31 percent cut; State was given a 29 percent target.

While the appropriations bills grinding through Congress don't offer cuts quite this drastic, agencies appear to be reacting to the eventuality that civilian-side spending is going to drop to fund defense and homeland security boosts.

"The federal civilian customers have reacted to the rhetoric around reductions in that part of the federal government, as we've seen the promotion of spending in the defense and intelligence sector, given the national security interest," Moraco said. "So, we're seeing the program managers and contract administrators reacting to that and protecting their budget lines with an indication that they may be lower than they have been in the past."

Moraco said potential for growth remains on the IT side, however. "The demand is still high on cloud, cybersecurity and IT modernization," he said. "So as we look at it, whether it be through executive order or through government compliance, there is continual demand to upgrade legacy systems."

It remains to be seen whether the administration will go to the mat to protect its IT modernization goals. The White House issued a statement of support on Sept. 5 for a House appropriations package that covers most civilian-side spending. The statement noted that many IT priorities, including a $228 million modernization fund to be housed at the General Services Administration and funding for tech upgrades at the Office of Personnel Management and the Department of Housing and Urban Development, were not included in the bill. Nonetheless, the statement indicated that President Trump would sign the measure into law.

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy, health IT and the Department of Veterans Affairs. Prior to joining FCW, Mr. Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian started his career as an arts reporter and critic, and has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, Architect magazine, and other publications. He was an editorial assistant and staff writer at the now-defunct New York Press and arts editor at the About.com online network in the 1990s, and was a weekly contributor of music and film reviews to the Washington Times from 2007 to 2014.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


Rising Stars

Meet 21 early-career leaders who are doing great things in federal IT.

Featured

  • SEC Chairman Jay Clayton

    SEC owns up to 2016 breach

    A key database of financial information was breached in 2016, possibly in support of insider trading, said the Securities and Exchange Commission.

  • Image from Shutterstock.com

    DOD looks to get aggressive about cloud adoption

    Defense leaders and Congress are looking to encourage more aggressive cloud policies and prod reluctant agencies to embrace experimentation and risk-taking.

  • Shutterstock / Pictofigo

    The next big thing in IT procurement

    Steve Kelman talks to the agencies that have embraced tech demos in their acquisition efforts -- and urges others in government to give it a try.

  • broken lock

    DHS bans Kaspersky from federal systems

    The Department of Homeland Security banned the Russian cybersecurity company Kaspersky Lab’s products from federal agencies in a new binding operational directive.

  • man planning layoffs

    USDA looks to cut CIOs as part of reorg

    The Department of Agriculture is looking to cut down on the number of agency CIOs in the name of efficiency and better communication across mission areas.

  • What's next for agency cyber efforts?

    Ninety days after the Trump administration's executive order, FCW sat down with agency cyber leaders to discuss what’s changing.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group