October 24, 2024

There’s been a marked increase in IT spending among federal civilian agencies during the past couple years. This year is no different, with the federal civilian IT budget increasing by 8.1 percent from FY2023 to FY2025. Agency IT budgets are projected at $76.8 billion this fiscal year. Key areas of concentration include cybersecurity, AI, the user experience (UX) and using data as a strategic asset, along with IT modernization. 

Here are some upcoming IT budget priorities and key programs across civilian agencies.  

FY2025 civilian IT budget priorities 

Cybersecurity: The cybersecurity spend in the civilian sector is estimated at $13 billion for FY2025, up by 15 percent from FY2023. Public service safety and security will be the focus for the fiscal year, emphasizing implementation of Executive Order 14028, The Federal Zero Trust Strategy, and other OMB memoranda.  

The Federal Zero Trust Strategy (Office of Management and Budget, or OMB, Memorandum M-22-09), issued in January 2022, was meant to guide agencies toward zero-trust cybersecurity principles. The strategy includes continuous verification of user identities and device integrity.  

Post-quantum cryptography is also gaining traction. OMB Memorandum M-23-02 established agency requirements for identifying and prioritizing cryptography in sensitive systems that could be vulnerable to quantum computing threats.  

Artificial intelligence: Civilian agency AI spending is intended to create agency chief AI officers and to support Executive Order 14110 on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. Considerable AI funding is being requested across agencies, with a $40 million ask by the U.S. Digital Service, General Services Administration (GSA) and Office of Personnel Management (OPM) for a “national AI talent surge.” This request is meant to fill gaps at key agencies and to grow AI training programs for the existing workforce.  

Digital-first public experience: Another key IT priority in the federal civilian sector is aimed at improving the digital user experience (UX) for the American public. This includes implementation of Executive Order 14058, the 21st Century Integrated Digital Experience Act, and other OMB memoranda.  

Data as a strategic asset: Another top IT budget priority would see improved use of accurate and actionable data for decision-making. Look for agencies to put the Federal Data Strategy to work for data management guidance. 

IT modernization: An additional $75 million has been requested for the Technology Modernization Fund (TMF), to adopt modern technologies and to retire legacy systems.  

VA, CISA lead AI and cyber work 

Even with less in its IT budget for FY25, the U.S. Department of Veteran Affairs (VA) is becoming an AI leader. The agency is directing $420.7 million to customer relationship management, supporting information integration and greater on-demand access to veterans’ benefits.  

On the cybersecurity front, the Cybersecurity and Infrastructure Security Agency (CISA) is requesting roughly $442 million to build out its cyber analytics and data system (CADS).  

The CADS environment will integrate cybersecurity data sets and provide internal tools and capabilities to ingest and integrate data.   

As budget requests are finalized, IT manufacturers and solutions providers would be best served by positioning their offerings in a way that supports not only the general IT priorities of federal civilian agencies, but some of these programs and initiatives. 

This article was adapted from commentary originally published in Washington Technology. For the complete commentary, click here.