How Do Government Agencies Spend Their IT Budgets?

Find information on how U.S. government offices and agencies are spending IT dollars and which projects are in the pipeline.

If you’re wondering whether the solutions and services your managed services provider (MSP) or value-added reseller (VAR) business provide are in demand from government agencies, the answer is easy to find. The details of government IT budgets are available online for your review and to assist with market research.

The U.S. General Services Administration (GSA) lists vendors on its schedule in the information technology category providing solutions and services including:

  • Cloud computing
  • Cybersecurity
  • Data center services
  • IT hardware and software
  • Telecommunications
  • Network services

To get an idea of what federal government agencies have purchased as a part of the 2019 budget, you can explore USASpending.gov, which includes an interactive Spending Explorer tool. The tool allows you to click on a government agency, and see how its budget breaks down into categories. In some cases, IT products and services are listed in their own category. In other cases, it may take a little digging to find them.

For example, by first clicking on spending by agency in the Spending Explorer, and then the Department of Housing and Urban Development, information technology expenses, contractual services and supplies. You will see how the department allocated this part of the budget and which projects are underway, including:

  • An asset management solution and maintenance for the system
  • Systems operations and maintenance for a financial assessment system
  • Software licenses
  • Data capture
  • An end-user support services system

Choosing the Office of Personnel Management, and then salaries and expenses, Office of the Chief Information Officer, contractual services and supplies, you can find how that office allocated spending for IT — including its largest expense for IT systems and support.

State and Local Contracts

When you consider the market for your products and services in the government vertical, remember that you can also bid at the state, county and local levels. You can find state agencies requesting bids or proposals online, such as the Pennsylvania eMarketplace, BidBuy Illinois Procurement, or California’s Cal eProcure.  A complete list of state procurement websites is available from NIGP. You may also be able to contact a state university, hospital, or other organization directly to add your company to their bidder’s list. Be prepared to register your company with the state and provide necessary information to be able to bid.

At the county or local levels, governments and agencies will publish requests for proposals or requests for bids in local newspapers or online. By staying informed of local government agencies’ projects, challenges, and pain points and establishing relationships with local government officials, you may be able to suggest solutions to consider for the next local government IT budget. Your input could ultimately save your community money, improve efficiency, and provide better experiences to constituents.

Regardless of how your initial contact occurs, assess the government office or agencies’ current IT system as a part of your bidding process. Technology implementation can be disruptive, so government organizations may lag behind your other clients with upgrades. Don’t make assumptions that could lead to bidding too low to cover all the work required for the project.

Be Prepared to Show Value

From the time of an initial discovery call or meeting, through the budget and bidding processes to an award can take more than a year. During that period, you will deal with multiple decision-makers — from the IT department or personnel who will use your systems to their supervisors and the office or agency’s governing board and financial officers. You will find that government agencies are not only looking for the optimal solution from a technology perspective but also the one that provides the greatest value. Be prepared to address each stakeholder’s concerns — in non-technical terms — so people with a wide range of educational backgrounds can understand what you are proposing.

Your expertise has enabled you to provide solutions to businesses and organizations in the private sector. With appropriate planning, preparation and navigating a bit of a learning curve, your business could expand to provide in-demand IT products and services to government entities. Consider whether this path is the right one for your business.


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The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of XaaS Journal and DevPro Journal.