“Civilian information technology contracting obligations have continued to increase despite concerns that Covid-19 could slow contract awards and payments to contractors.”
“Civilian agencies obligated $7.7 billion on IT contracts in the second quarter of fiscal 2020, up 15% from $6.7 billion in fiscal 2019. That’s the second year of double-digit IT market growth in the second quarter. In fiscal 2019, obligations during the quarter were up 17%. Related spending had been down or flat in the two years prior. Defense Department obligations aren’t considered because the agency reports spending on a 90-day delay for national security reasons…”Virus Indirectly Pushing Earlier Awards, More Contracts
“There’s not a direct link between the IT spending increase and Covid-19. About $98 million was spent on civilian agency Covid-19-related contracts and task orders in the second quarter of fiscal 2020. While that is a substantial amount, it’s only about 10% of the $1 billion increase. It’s possible that Covid-19 could become a bigger driver of increased IT spending in the third quarter, with Covid-19-related IT obligations in April reaching more than $325 million to date.”
“Instead, Covid-19 has influenced awards and obligations in a more indirect way in the second quarter. Increased work from home arrangements have led to the Navy’s acquisition community working to award contracts ahead of schedule in anticipation of many contract adjustments once the effects of the pandemic play out. One contract at the Space Force was awarded four months ahead of schedule. It’s likely that acquisition offices in civilian agencies are preparing in the same way.”
“Comparing IT spending in March and April further supports this theory. Civilian IT spending in March and April of 2020 is up almost $500 million compared with the same months in fiscal 2019…” Read the full article here.
Source: Tech Spending Boosted by Covid-19 in Second Quarter: This Is IT – By Laura Criste, May 4, 2020. Bloomberg Government.
