How Do Government Agencies Spend Their IT Budgets?

Learn 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 provides 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 2024 budget, you can explore, which includes an interactive Spending Explorer tool. The tool lets you click on a government agency and see how its budget breaks down into categories. For example, some IT products and services are listed in their own category. In other cases, it may take a little digging to find them.

For example, in the Spending Explorer, click on spending by an agency, then the Department of Housing and Urban Development or Office of Personnel Management. Select filters, and you will see recent project awards.

State and Local Contracts

When considering 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 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 the necessary information 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 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, it can take more than a year. During that period, you will deal with multiple decision-makers – from the IT department or personnel using your systems to their supervisors, 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 most significant 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 learning curve, your practice could expand to offer in-demand IT products and services to government entities. Consider whether this path is the right one for your business.

Mike Monocello

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 Managed Services Journal (formerly XaaS Journal) and DevPro Journal.