Last month the White House released its fiscal year (FY) 2017 budget request and while a few federal departments and agencies saw some increases in their overall discretionary and information technology (IT) budgets many saw flat or decreasing budgets. The Department of State and the U.S. Agency for of International Development (USAID) were among those seeing declines, more so at the IT level than in the overall discretionary budget.
Total Discretionary Funding
The president’s budget provides $50.1B in total discretionary funding for the Department of State and the U.S. Agency for International Development (USAID), including $35.2B in base discretionary funds and $14.9B in Overseas Contingency Operations (OCO). Total discretionary funding for FY 2017 is $580M (-1.1%) below the FY 2016 enacted level and the $35.2B in base discretionary funding is $71M (-1.7%) below the FY 2016 enacted level.
Funding highlights include:
- $6.1B for Embassy Security, Construction, and Maintenance and Worldwide Security Protection, including Diplomatic Security (DS) operations, IT network and infrastructure protection, and medical support at selected posts, and emergency planning and preparedness.
- $4.1B to stabilize communities liberated from ISIL in Syria and Iraq; disrupt ISIL’s attack-plotting, financing and recruitment; discredit ISIL propaganda; and support a political solution to the Syrian civil war
- $983.9M for both the State Department and USAID to advance the Global Climate Change Initiative, including $500.0M for the cross-agency Green Climate Fund
- $750.6M to sustain a long-term, comprehensive approach designed to address the underlying causes of migration of unaccompanied children and families from Central America
- $1.4M to Promote a Secure and Open Internet through the Office of the Coordinator for Cyber Issues
State and USAID Total IT and New Development Budgets
The State Department and USAID are seeking $1.9B (-5.4%) and $151.4M (flat) respectively for FY 2017 IT. However, the requested FY 2017 levels for each entity is still a healthy boost over what each spent in FY 2015, with State requesting $283.3M (+18%) more and USAID requesting $19.9M (+15.1%) over their respective FY 2015 levels.
It is also noteworthy that State requested $1.6B in IT funding in last year’s FY 2016 budget request in February 2015, but actually has received/enacted a budget of nearly $2B for the current 2016 fiscal year. So the proposed FY 2017 State IT budget reduction of -5.4% year-to-year should be viewed in light of its 25% increase from FY 2015 to 2016. USAID, on the other hand, had requested $165.5M for FY 2016 IT but has reported enacting $151.4M instead and has kept that flat for FY 2017. (See table below.)
Both entities continue to focus the majority of their IT budgets on steady state or Operations and Maintenance (O&M) funding categories over Development/Modernization/Enhancement (DME) efforts, with both running roughly at about an 80%-20% split in favor of O&M versus DME. State’s $352.7M in DME funding is nearly 22% below the enacted FY 2016 level. But their $450.6M in enacted FY 2016 DME funds is more than 3-times the $140.4M State requested in their FY 2016 IT budget. So, clearly, FY 2016 is turning out to be a pretty healthy year for State Department IT spending, compared to their original request. By comparison, USAID has been more restrained. Their FY 2017 DME funding of $25.7M continues a year-over-year trimming over the last few years and their FY 2016 enacted DME of $27.4 is $1.1M below what they had originally requested for FY 2016 last year.
Noteworthy IT Programs
Looking at the specifics of both State’s and USAID’s IT investments and initiatives gives some deeper understanding. Here are some initiatives that stand out among others due to relative size, budget growth, and/or proportion of new development spending.
IT Funding Highlights
- Bureau IT Support – At $254.7M (+2.0%), this investment encompasses centrally provided shared IT support services such as desktop services; telecomm, wireless & data services; peripherals; software; and any other IT infrastructure costs incurred by the bureaus. $15.3M in DME accounts for 6.0% of total FY 2017 funding
- Enterprise Network and Bandwidth Services – This investment will provide the IT backbone and infrastructure services required to support the Department of State's mission in a secure, reliable and resilient manner. It receives $118.3M (+14.9%) in FY 2017 and is entirely O&M funding.
- Messaging Services, Email and Remote Connectivity – At $100.7M (+19.2%) MSERC receives the largest total budget increase for FY 2017. MSERC supports State-wide messaging services like e-mail, mobile computing, and special messaging for DOS. It integrates technologies with messaging programs and ensures messaging is accessible to the DOS and other federal agencies. About 1.3% of this funding is for DME activities.
- Consular Systems Modernization – Among State’s largest ten initiatives at $88.7M CSM has the largest DME budget of all DOS initiatives at $77.1M, which accounts for 87% of its budget. CSM provides for the development of all modernization and enhancements to systems supported by Consular Systems and Technology (CST). It will modernize and consolidate the functionality contained within the existing suite of systems under a common framework.
- Architecture Services – This smaller $31.8M program sees a 90% total budget jump for FY 2017. Architecture Services will establish the Department-level business case for ongoing and future projects and activities associated with IT architecture, including those that support the DOS IT strategic goal to create a modernized global infrastructure. 93.1% of the total funding is for DME.
- Steady State IT Infrastructure & Technology Modernization – USAID slates $55.2M (-0.4%) for its largest IT line item for enterprise-wide IT infrastructure, communications, desktops, applications, etc. 16.2% of this is DME funding. This single initiative accounts for more than 35% of USAID’s FY 2017 IT budget.
After seeing their total IT budgets receive significant increases from FY 2015 to FY 2016 – State and USAID received a 25% and 15% total budget increase respectively – both have flattened or decreased slightly in the latest budget proposal. Yet, both remain at or above FY 2015 levels and FY 2016 appears to be a good year for IT spending at each organization.
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