Will deep budget cuts alter federal buying strategies?

Federal agency officials are optimistic that efforts to optimize spending across government will continue, but some experts say deep agency cuts could short circuit some IT spending.

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Although steep civilian agency cuts are expected in the president's formal budget proposal, federal officials managing efforts to optimize spending don't expect a significant slowdown in their work or in IT spending.

"IT spending probably isn't going to slow significantly," said one federal official at a March 1 conference on category management in acquisition held by the General Services Administration and ACT-IAC.  He noted that IT has become akin to other basic utilities the government needs to operate, such as electricity and fuel.

A manager from the Office of Management and Budget agreed. "I can't see category management going away since it saves agencies money," he said.

A preliminary budget blueprint unveiled by the White House in the last days of February adds $54 billion to current levels of defense spending for a projected military budget of $603 billion for fiscal year 2017. Civilian agencies will see a $54 billion cut under the plan, "the largest proposed reduction since the early years of the Reagan administration," OMB Director Mick Mulvaney said in a Feb. 27 White House press briefing.

In a Feb. 28 speech to a joint session of Congress, President Donald Trump touted the ongoing hiring freeze and promised more savings on contracts, as part of his overall policy agenda.

More efficient spending on IT, as well as the other nine categories in OMB's category management initiative, would seem to fall in line with the White House's proposed smaller civilian agency budgets and increased attention to contracting, according to officials FCW talked with on the conference's sidelines.

Smaller budgets could lead to a reliance on category management, according to Lesley Field, acting administrator for federal procurement policy at OMB. "Given the changes coming at agencies, there's a natural incentive to find savings," as well as drive more frugal buying, she told one questioner following her keynote presentation.

Agency officials FCW talked with at the conference were wary of making predictions about how their IT budgets and acquisitions would work out, since it's early in the budgeting process.

Stan Soloway, a former deputy undersecretary of defense and Professional Services Council president, told FCW that steep budget cuts at agencies such those that could hit the Environmental Protection Agency, the State Department or Department of Labor, could greatly hinder how they buy and manage IT resources now and years into the future. Soloway now heads Celero Strategies.

With deep cuts "agencies will stop doing things," Soloway said, such as buying and planning IT system upgrades. The need to produce immediate reductions blocks incentives to take steps that could save the agency money down the line with more cost-effective and efficient services.

"It's hard to see to two to three years ahead" when faced with a mandate to reduce a budget immediately, Soloway said.

Kristin French, principal deputy assistant secretary of defense and acting assistant secretary of defense for logistics and materiel readiness, said she didn't expect big changes to category management programs, but possible "tweaks" to the efforts as things roll forward.

Acting GSA Administrator Tim Horne said his agency is focusing on its core mission to provide a continuum of IT services and capabilities for federal agencies. With its expansive IT product, services and expertise offering, GSA will "play a big part in the president's management agenda," he said in remarks at the conference.

Horne, who served as federal transition coordinator in 2016, said, "We don't know where we will plug in yet." The agency is keeping its business capabilities sharpened in anticipation.

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