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Federal budget update: Best bets for 2018

January 10, 2017

Federal budget update: Best bets for 2018

 Ready to align your business to federal market trends (and funding)? Don't miss these emerging opportunities

It’s a new year—and a great time to make sure your business is headed in the right direction.

Step one is to make sure your public sector offerings align with federal government priorities.

According to Sean Nulty, program analyst at the Coalition for Government Procurement, the current budget blueprint reveals several agencies that could be top spenders in 2018. And if you’re smart, you’ll make sure your business is poised to capitalize on the coming wave.

(Note: These predictions depend on Congress passing a spending bill or a continuing resolution to fund the government. Learn more.)

Top 3 agencies

#1 Department of Defense (DoD): According to Nulty, the DoD is the leading beneficiary in the president’s proposed budget with a 10% increase in defense spending—one of the largest one-year DoD increases in American history. If passed, the budget would boost the department’s funding by $52 billion, plus an additional $2 billion for other national defense programs. Where will funding go? Toward fighting ISIS, maintenance and modernization, and increasing personnel throughout the military services.

#2 Homeland Security: Another well-poised agency is Homeland Security, with a healthy proposed increase of 6.8% ($2.8 billion). These funds would be dog-eared for border security, personnel and border infrastructure.

#3 Veterans Affairs (VA): The proposed budget also boosts support for the VA through a 6% increase ($4.4 billion). Most of the funding would go toward healthcare, in addition to ensuring timely benefits. Nulty believes we’ll also see more contract spending from the VA, due to the agency’s new electronic health records contract, which would replace its aging homegrown Vista system.

2 agency decreases

#1 Environmental Protection Agency (EPA): If passed, the 2018 budget would mean a 31% cut ($2.6 billion) for the EPA. This would likely include a huge workforce reduction, while slashing support for Superfund cleanup, as well as research and development. 

#2 State Department: State and the U.S. Agency for International Development would also face significant cuts—about a 28% decrease ($10.1 billion)—especially affecting foreign aid.

Continuing federal trends

Beyond the proposed 2018 budget and its ramifications for federal agencies, savvy resellers can also align themselves with a few ongoing federal trends.

One is technology modernization. Congress recently passed the Modernizing Government Technology (MGT) Act, signed by the president in December, and the White House recently released its IT Modernization Plan, which unveils similar initiatives for modernization.

A second, newer trend is how the government makes its purchases. The recently passed National Defense Authorization Act (section 846, specifically) enables and encourages government buyers to purchase commercial products through e-commerce portals.

“A lot of money will continue to go toward IT modernization and replacing outdated software and hardware systems—so that’s still a safe focus—and the new emphasis on e-commerce portals is also a big deal,” said Nulty. “I believe these two trends will generate a lot of buzz in 2018 and beyond.”

To learn how Ingram Micro can help, please see our Federal Playbook. Watch for details on Ingram Micro’s 2018 Federal Summit Event, March 21 in the Beltway! Join us for the opportunity to learn about other key market topics from Federal industry experts.