In February, the Bi-Partisan Budget Act of 2018 (BBA) passed, lifting caps on spending and paved the way for significant increases in discretionary spending across defense and civilian agencies. With the passing of BBA 2018, the defense discretionary funding cap was increased by $80 billion in FY2018 and $85 billion in FY 2019. What does this budget infusion mean for defense agency decision-makers and procurement officers? How should government contractors serving this industry prepare? To find out, Market Connections conducted a PulsePoll™ of federal defense agency technology leaders to find out.
DOD is ready to move technology projects forward. Currently, eight out of ten respondents have programs and projects on hold because of budget related issues. With the current continuing resolution set to expire on March 23rd, and the BBA passing, many believe relief is in sight. Almost two-thirds believe that the budget increases that have been projected for FY18 and FY19 will reinvigorate efforts that have been on hold.
Spending will start this year and continue to grow in FY2019. Knowing that there can often be a long lag time from funding approval to implementation, Market Connections asked, how soon those working in DOD agencies felt budget increases would begin to have an impact. Overwhelmingly, respondents believed that new federal dollars will make an impact in the next 18 months. Nearly one-quarter believe the impact will be felt immediately (within this fiscal year) and another 57 percent who believe the monies will begin making an impact in FY2019.
DOD to spend to modernize hardware and systems, but more important improve their cyber-defense capabilities. Nearly two thirds of respondents placed cyber security in the top five of their spending priorities. “In this day and age, it is not surprising that cybersecurity tops the list of those types of projects that will get first attention” says Aaron Heffron, president of Market Connections, “We hear from our clients every day that federal agencies are asking for assistance in securing their networks and systems.”
Modernization was another key focus area, with replacement of old hardware (56 percent) and overall network modernization (43 percent) listed as areas where new budget dollars will have the greatest impact. Current staff may get some relief with the influx of dollars through training and staff augmentation. Nearly half of respondents reported that they will allocate new dollars to staff training and one-third will be spending to hire new civilian personnel.
Contractors need to plan now to help guide the planning and acquisition process. New contracts and projects will launch at a rapid pace, and program officers and procurement officials will be scrambling to pull together the best solutions in a tight time frame.
“With the continuing resolution deadline quickly approaching, and the new fiscal year right around the corner, now is the time to provide defense agencies with the type of information and content they need to help them make good, and fast, decisions,” recommends Heffron. “Based on our past research, product demos, case studies, research reports and white papers will be critical in providing relevant information quickly. Highlights of your cybersecurity and modernization solutions should be as up-to-date as possible.”
See full results from the Defense Budget PulsePoll™.
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