3 trends driving DoD IT budgets in FY 2017

The Defense Department's $38.5 billion IT budget in the fiscal 2017 requests is being driven by three major trends contractors should be aware of: cybersecurity...

The Defense Department’s $38.5 billion IT budget in the fiscal 2017 requests is being driven by three major trends contractors should be aware of: cybersecurity, cloud and analytics. While the possibility of another continuing resolution until March looms, DoD’s IT projects are expected to move forward.

The Immixgroup’s Nov. 17 market intelligence briefing  laid out these trends, along with specific agency priorities and contract opportunities. It also broke up project funding into capital expenditures, referred to as development, modernization and enhancement (DME), and operational, ereferred to as Steady State (SS).


While the Defense Information Systems Agency has an IT budget of $3.1 billion in the 2017 request, that’s $500 million less than 2016.  That means it will be consolidating its investments under cyber development, according to Immixgroup.

DISA’s joint global command and control system is actually getting a boost in funding of almost $5 million, leaving it with $25.8 million DME and $124.5 million SS.

Meanwhile, the DoD mobility project, which is expected to be awarded next fall, saw its DME funding get cut in half, from $9 million to $4.4 million, but its SS spending will rise by almost $8 million, from $21.4 million to $29.1 million.

DISA’s Defense Information Systems Network, while still remaining the largest of these contracts, is getting slashed drastically. Its DME funding is dropping from $173 million to $93.5 million, and SS will fall from $1.2 billion to $773 million.

Air Force

The Air Force is actually getting a 4 percent bump in its IT budget, up to $5.3 billion, although that doesn’t quite return it to fiscal 2015 levels. It’s expected to prioritize multi-domain operations and cyber integration, weapons systems, commoditized cloud and automation as it seeks to reduce cost and complexity.

The Tactical Data Link System, which provides digital communications and data exchange across joint warfighting systems, is getting a $23.9 million boost for DME, from $60.3 million to $84.2 million, likely because the Air Force is looking to leverage newer communication systems to better integrate data. Meanwhile, its SS funding is only going up $3.4 million, from $46.3 million to $49.7 million.

After a recent organizational restructuring due to cost overruns, the Next Generation Operational Control System, which operates GPS satellites, is looking to improve automation and cybersecurity, so its DME funding is jumping from $289.2 million in 2016 to $332.5 million in 2017.


The Army is looking at a $7.6 billion budget in fiscal 2017, a 1 percent drop from last year. This is causing it to be cost-conscious, pushing automation, cloud and data center consolidation. It also wants to expand multi-domain operations.

First, it’s looking to modernize its human resources system, including increasing automation and access to personnel and payroll information. That’s where the Integrated Personnel and Pay System (IPPS-A) comes in. Its DME is going up from $140.5 million to $161.1 million, as the Army hopes to deploy it to the National Guard in 2018 and the rest of the Army in 2019.

Unified capabilities, which combines voice, video, instant messaging and desktop sharing into one package, is a service that’s seeing its SS funding more than double, from $31.2 million to $83.3 million.

The Warfighter Information Network-Tactical (Win-T), which provides interoperability of voice and data for warfighters, is looking to increase network capacity and improve cyber protections. And while its DME funding is dropping from $660.2 million to $465.3 million, its SS is increasing $23.5 million, from $62.2 million to $85.7 million.


The Department of the Navy is actually getting the biggest increase in IT funding across the services, at 2.5 percent, bringing it up to $6.5 billion for fiscal 2017. That’s largely due to challenges in the Pacific, Immixgroup said, although cloud transitions, data center consolidation and network upgrades are also a factor.

Despite the boost in funding, however, Navy’s biggest program is actually seeing its budget fall. Next Generation Enterprise Network (NGEN) is looking at a drop from $1.34 billion to $1.27 billion in SS funding.

The Marine Corps, however, is looking at improving fast reaction capabilities and operating in denied environments, so SS funding for its Common Aviation Command and Control System is leaping from $38 million to $72 million.

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