Election 2024: Forecasting the Impacts on Federal IT Programs

As the Fall of 2024 approaches, many in the government contracting community are looking toward the upcoming federal election with wonder and, in some cases, concern about the impact of the election outcome on our industry. At first blush, one might assume that there could be significant impacts on contracting budgets depending on who wins the White House and Congress. Does the data bear out those fears? What should savvy contractor companies be doing to prepare for the outcome of the election?

Over our 20-year history, Red Team has conducted market assessments on the federal contracting industry spanning four administrations, and these assessments show that federal contract spending continues to remain strong, especially with growth in the IT modernization, AI/ML, data analytics, cybersecurity, and across the national security and health sectors. In fact, over the last four administrations, we have seen a steady increase in federal IT spend across all cabinet level departments (see table below).

Federal IT Spending by Administration and Department (2004-2024)

While there is always a chance that radical change in the contracting market could result from the outcome of the election, history would seem to even out those concerns. In the interest of supporting and informing our federal contracting community members, we have compiled the below major IT priorities which the new administration will need to lead and require collaboration with the federal contracting community:

1. Cloud Migration Specialization

Many federal agencies are transitioning legacy IT systems to the cloud to enhance service delivery, reduce costs, and improve disaster recovery capabilities.

• The USDA’s Farm Production and Conservation (FPAC) is migrating its systems to the cloud to streamline disaster assistance for farmers and improve data access.
• The The Department of Justice (DOJ) is undergoing a massive cloud migration effort to improve its case management systems, supporting agencies like the Federal Bureau of Investigation (FBI) and Drug Enforcement Administration (DEA) to securely store and analyze large amounts of data from criminal investigations.
• In defense, the DoD’s Joint Warfighting Cloud Capability (JWCC) program is enabling cloud services across all mission domains, with a focus on security and scalability.

2. Cybersecurity Compliance

Cybersecurity is a national priority; especially as federal agencies face increasingly sophisticated cyber threats.

• The DoD’s Cybersecurity Maturity Model Certification (CMMC) is set to be fully implemented by 2026, requiring defense contractors to meet stringent cybersecurity standards to handle controlled unclassified information (CUI).
• The Department of Energy (DOE) has focused on securing critical infrastructure like power grids, making cybersecurity solutions for industrial control systems (ICS)
• The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) is modernizing its IT systems to protect against cyberattacks targeting critical infrastructure, focusing on rapid detection and incident response capabilities.

3. Advanced Data Analytics Solutions

Data analytics is crucial for agencies to process large volumes of information, forecast trends, and make evidence-based decisions.

• The USDA’s National Agricultural Statistics Service (NASS) is integrating advanced analytics into its data collection systems to improve food security and market forecasting and to provide more timely and accurate agricultural statistics.
• The Census Bureau, preparing for the 2030 Census, is implementing big data processing and analytics tools to handle the massive amounts of population count data involved in the decennial census.
• Similarly, the Centers for Disease Control and Prevention (CDC) is modernizing its public health data systems to better track, analyze, and respond to health threats like pandemics, using real-time analytics and predictive modeling to improve public health responses.

4. Telehealth Infrastructure Development

The rise in demand for remote healthcare services, accelerated by the pandemic, has made telehealth infrastructure a critical part of the healthcare ecosystem, especially the Department of Veterans Affairs (VA) and HHS.

• The VA’s Telehealth Expansion is centered on increasing access to healthcare for millions of veterans, particularly in rural areas, through secure and scalable telehealth platforms.
• The Centers for Medicare and Medicaid Services (CMS) within HHS is modernizing its IT infrastructure to support Medicaid and CHIP, ensuring that these systems are interoperable and can securely handle telehealth data.
• The Department of Health and Human Services (HHS) is working on securing these platforms under HIPAA compliance to protect sensitive health information during telehealth sessions.

5. Smart Grid Technology Integration

Modernizing the grid is essential to meeting national energy goals, particularly the integration of renewable energy sources such as wind and solar.

• The Department of Energy (DOE) is modernizing the national electric grid to enhance resilience, efficiency, and the integration of renewable energy sources. Through its Grid Modernization Initiative, the DOE is developing smart grid technologies that leverage data analytics to optimize power distribution and prevent widespread outages. For example, the DOE is investing in grid-edge technologies that provide real-time monitoring and management of energy consumption. The DOE’s focus on cybersecurity ensures that the grid is protected from potential cyber threats, particularly in areas involving critical infrastructure.

6. Biometric Identification Systems

Biometric identification systems are essential for enhancing security and streamlining identity verification processes at critical entry points, such as airports and borders.

• The Department of Homeland Security (DHS) is advancing its use of biometric technologies for identity verification through its Office of Biometric Identity Management to incorporate more advanced biometric modalities, including facial recognition, iris scanning, and fingerprinting.
• Customs and Border Protection (CBP) relies on these technologies to enhance security at borders and airports.
• Immigration and Customs Enforcement (ICE) uses biometric systems to improve immigration enforcement and management.

7. Educational Technology Development

Educational technology plays a crucial role in improving access to education and managing vast amounts of sensitive student information.

• The Department of Education is focused on modernizing its IT infrastructure to support student aid systems, cybersecurity, and data sharing across federal and state education platforms. For example, the Student Aid IT Modernization program is improving the processing of student loans and grants, ensuring faster, more secure access to financial aid services.
• The Education Data Exchange Network (EDEN) is being revamped to improve data sharing between states and the federal government, allowing for better tracking of educational outcomes. The department is also prioritizing cybersecurity improvements to protect sensitive student data from growing cyber threats.

8. Digital Modernization for Public Health

Real-time public health data is critical for national preparedness and rapid response during health crises. Public health agencies, particularly the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA), are pushing for significant IT infrastructure upgrades to enhance their ability to track, analyze, and respond to public health threats.

• The CDC’s Public Health Data Modernization Initiative is aimed at improving data collection and analysis methods to provide real-time tracking of pandemics and other health emergencies.
• The FDA’s Platform Modernization Initiative focuses on upgrading its cloud infrastructure and enhancing data analytics capabilities to handle drug approvals and medical device reviews more efficiently.

9. Robotic Process Automation (RPA)

Robotic Process Automation (RPA) is becoming increasingly popular across various federal agencies for automating repetitive tasks and freeing up human resources for more strategic and high-impact activities.

• The Department of the Treasury is leveraging RPA to automate portions of the tax processing system in the IRS, speeding up routine administrative tasks and improving accuracy in financial reporting.
• The Department of Veterans Affairs (VA) is adopting RPA to streamline claims processing within the Veterans Benefits Administration (VBA), reducing manual workloads.
• The Social Security Administration (SSA) is using RPA to handle routine case processing and improve service delivery timelines for disability claims.

10. Federal Financial Management Solutions

Modernizing financial management systems is critical to address the growing number of financial crimes and need for transparency in government financial operations.

• The Department of the Treasury is modernizing its financial management systems to enhance transparency, improve efficiency, and combat financial fraud. For example, the IRS Core IT Modernization project is upgrading outdated systems to improve tax collection and fraud detection capabilities.
• The Financial Crimes Enforcement Network (FinCEN) is also modernizing its systems to better track and prevent financial crimes such as money laundering and terrorist financing. These upgrades will leverage data analytics and cloud solutions to enhance the Treasury’s ability to monitor financial transactions in real-time.

11. AI and Machine Learning Integration

Several federal agencies are integrating Artificial Intelligence (AI) and Machine Learning (ML) into their IT infrastructure to enhance decision-making and automate processes.

• The Department of Defense (DoD), for example, is utilizing AI for predictive analytics in command and control systems to enhance battlefield decision-making through DoD Chief Digital and Artificial Intelligence Office (CDAO).
• CMS is using AI to better detect fraud and abuse within Medicare and Medicaid and identifying at-risk populations, particularly during public health emergencies such as pandemics.
• Department of Transportation’s (DOT) NextGen Air Transportation System initiative, which aims to modernize air traffic control, relies on AI to help improve traffic flow management by optimizing flight paths, predicting delays, and improving safety protocols.

How Do Federal Contractors Prepare?

The 2024 election is expected to have a notable impact on federal government contracting, particularly in areas like IT modernization, AI/ML, and cybersecurity. Despite concerns that a change in leadership could significantly alter contracting budgets, market assessments by Red Team Consulting show continued strength in federal contract spending, especially in sectors like national security and healthcare. Federal contractors should focus on aligning their capabilities with these growth areas regardless of the election outcome. By understanding these priorities and the associated federal IT spending trends, contractors can better prepare for the potential shifts that may arise after the 2024 election.

To hear more of our thoughts on this compelling topic, tune into our webinar, Navigating Strategic Growth Through an Unsettled Political Landscape, on September 26 at 11:00am ET. This webinar is co-hosted with Deltek.