6 minutes

What the Biden Administration's Fiscal 2022 Means for IT & Defense Priorities

James Hanson, Group Publisher, Federal; shares how President Biden's proposed $6 trillion budget will bolster the ability of federal agencies to serve Americans.

June 16, 2021

Introduction

President Biden’s fiscal 2022 lays out several priorities “recommitting to good government” by empowering the federal workforce, investing in research and development, and bolstering the ability of federal agencies to serve Americans though:

Focus on equity in federal management and policy making
Maximum accountability, transparency and results in administering American Rescue Plan funds
Scientific integrity and evidence-based approaches in decision-making and program evaluation
Keeping sensitive data and systems secure
Improved customer experiences and furthering the vision of digital government
Supporting American manufacturing and champion a clean energy future
A “modern and diverse” federal acquisition system.

To achieve these objectives, Biden’s proposed $6 trillion budget includes a whopping 16% increase in non-defense discretionary spending ($769 billion) and 1.7% increase for defense spending ($753 billion). Taken together, these actions will support the President’s Management Agenda as it takes shape in the coming month.

Federal Civilian and IT Outlook

This March marked a turning point for federal IT modernization projects when Congress passed a $1 billion infusion of cash for the Technology Modernization Fund (TMF) as part of the American Rescue Plan Act. Now, with the release of the fiscal 2022 budget, the Biden administration is doubling down with a proposed additional half a billion dollars. The request pushes federal agencies to continue modernization efforts of “standards-based platforms and commercial capabilities that replace highly customized government technology.”

As part of that modernization effort, the White House is asking Congress to appropriate $9.8 billion for federal agencies to improve their cybersecurity. Agencies will spend the requested funds according to the five functions of the National Institute of Standards and Technology’s cybersecurity framework with $3.6 billion towards protection – followed closely by identification, then detection, response and recovery. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) will receive the bulk with $1.7 billion plus $20 million reserved for a cyber response and recovery fund and support of the government-wide Continuous Diagnostics and Mitigation (CDM) program.

The job of coordinating all this activity across the various civilian agencies will fall to the office of the national cyber director. The marquee recommendation of the congressionally mandated Cyberspace Solarium Commission, the national cyber director’s office—which is expected to have a staff of more than 70 personnel—will be funded at $15 million.

The budget also calls out support for the implementation of the Federal Data Strategy to provide a consistent framework of principles and practices that are intended to guide agencies as they continue to implement existing and future data initiatives. The federal civilian IT spending request is divided up into three “IT Portfolio” areas:

45% - IT infrastructure, security, and management
44% - Mission delivery solutions and services
11% – Administration services and support systems

Agency-by-Agency Budget Highlights

The Agriculture Department Office of the Chief Information Officer will receive $101 million, a 50% increase over FY21, with the requirement to spend at least $56 million on cybersecurity efforts.
Commerce Department will receive $2.6 billion to spend—on IT. About $127 million is earmarked for technology modernization projects, including $20 million for the successor to Commerce Business Systems and $107 million to mitigate cybersecurity risks. As proposed in the American Jobs Plan, the request also asks for $10 billion for regional innovation hubs that will focus on certain technology areas but spreads them around the country. NOAA will receive $40 million for the proposed Advanced Research Projects Agency for Climate, a new research group to find “high-risk, high-reward” solutions to address climate change and clean energy.
Education Department funding is tied up in loan and grant administration, though the agency would get a new working capital fund, a “Education Nonrecurring Expenses Fund,” set aside for “information and business technology system modernization and facilities infrastructure.”
The Energy Department would receive “significant investments to address cyber vulnerabilities identified as a result of SolarWinds incident of December 2020,” and $2 million for the Artificial Intelligence Technology Office.
The Department of Health and Human Services is among the top three IT budget requests for 2022 and includes $6.5 billion to launch the Advanced Research Projects Agency for Health to boost federal research on cancer and other diseases, $8.7 billion to the Centers for Disease Control and Prevention to improve readiness for future public health crisis, and $715 million for cybersecurity needs.
The Department of Homeland Security is expected to spend just over $8 billion and more than any other civilian agency on cybersecurity—$2.4 billion.
The Housing and Urban Development Department would receive $437 million for IT programs under the 2022 proposal, as well as $69.8 million set aside for the Office of the Chief Information Officer.
The Interior Department—who is responsible for managing the nation’s lands among other responsibilities—would get $1.5 million for IT. Interior was one of the earliest agencies to get a working capital fund for IT investments after the MGT Act passed. The president’s budget proposal continues the use of that fund, authorizing it up to $91.4 million for “the operation and maintenance of a departmental financial and business management system, information technology improvements of general benefit to the department and cybersecurity.”
The Justice Department proposal kicks off with a $113 million request for development and deployment of an IT system to improve information sharing within the Department and with other law enforcement agencies. One of the biggest Justice components, the FBI, asked for $40 million to “bolster its cyber investigative program,” as well as “$18.8 million to address threats posed to the nation by foreign intelligence actors, $6.2 million to store data from the body-worn cameras of federal task force officers, and $15.2 million to defend the organization against cybersecurity threats.” The U.S. Marshals Service component requested $20.2 million to “upgrade electronic surveillance equipment” and $4.4 million for body cameras for its officers. The National Security Division also requested $5 million for general IT needs. Overall, the department requested close to $3.5 billion for IT and another $1.2 billion for cybersecurity.
The Labor Department request includes $37.3 million explicitly for IT modernization efforts, including funding for support systems and infrastructure modernization. While $32 million would go toward a centrally managed IT environment and the unified IT infrastructure for common data sources.
The State Department would receive a $2.8 billion in IT spending where improving cybersecurity is a key priority for the agency, especially in the wake of reports that one of its sub-agencies, the U.S. Agency for International Development, or USAID, was breached by Russian hackers. Other tech-related investment priorities include secure and mobile communications tools.
The Transportation Department has an established working capital fund for multi-year improvement projects, and plans to put $93 million of that fund toward a “shared services environment for commodity information technology investments.” Transportation is also asking for $39.4 million—specifically for security improvements to IT infrastructure, new identity and access management capabilities, data protection, and “implementation of federal cybersecurity initiatives and implementation of enhanced security controls on agency computers and mobile devices.
The Treasury Department would spend $5.9 billion on IT, or roughly 10% of its total budget, including more than $130 million for cybersecurity expenses. The IRS would receive a total budget of about $13 billion, “including funding for services to taxpayers using a variety of in-person, telephone, and web-based methods.”
The Veterans Affairs Department (VA) would receive the largest budget increase – $8.5 billion in IT funding. The single largest IT apportionment at VA is $2.7 billion for “activities related to implementation, preparation, development, interface, management, rollout, and maintenance” for the agency’s electronic health records modernization effort.
The Environmental Protection Agency would be funded at its highest level since fiscal 2011 with $370 million in IT funding for EPA’s largest systems, including its Central Data Exchange and its Superfund Enterprise Management System.
The General Services Administration’s biggest IT investment would go towards the Technology Transformation Service—which includes programs such as 18F and FedRAMP—at $57 million.
NASA would receive a slight IT funding decrease under Biden’s budget to $2.1 billion. The budget will provide funding to scientific and engineering workstation procurements; the agency’s Information Technology Infrastructure Integration Program, which centralizes management of the agency’s tech services, including customer service; and the National Center for Critical Information Processing and Storage, which provides federal customers redundant collocation services from the national power grid to the server rack level.
The National Science Foundation would receive $165 million in IT funding through Biden’s budget proposal, its largest IT budget in more than a decade, though it does not lay out specific IT investments for the agency.
OPM would receive $141 million for IT including $9 million for “information technology infrastructure modernization,” specifically its Trust Fund Federal Financial System.
The Small Business Administration would receive $109 million for IT. $6 million would be slotted for the ongoing modernization of its loan management accounting systems. Those systems provide oversight to SBA’s $835 billion portfolio of loans and loan guarantees.
SSA is slotted about $2.2 billion for IT. The request does not call out specific IT line items for SSA, but it does request $2 million to modernize the SSA OIG’s IT infrastructure.

Defense Budget Outlook

The fiscal 2022 budget is the first since 2011 that will not be limited by the Budget Control Act of 2011. Pentagon officials, who had long circumvented the budget caps by moving billions of dollars through the “emergency” Overseas Contingency Operations fund, are now requesting funds for wars and contingencies in the main, or base, budget.

Biden’s Pentagon budget focuses largely on R&D and forward leaning technologies that drive innovation and development of next-generation capabilities, calling for the largest-ever RDT&E investment with $112 billion, but getting Congress on board with plans to divest in legacy platforms to fund new capabilities will be a challenge. The key topline RDT&E numbers unveiled include:

$14.7 billion for science and technology
$2.3 billion for microelectronics
$874 million for artificial intelligence
$398 million for 5G
$1.8 billion for the Global Positioning System Enterprise
$10.4 billion for cyberspace activities

Kathleen Hicks, the second-highest ranking civilian at the Department of Defense (DOD), spotlighted innovation as critical for computing with China, “we are in an era where platforms will always matter, but it’s the software, it’s the quick turn, it’s the munitions, it’s those pieces that make such a critical difference in our capability set, and that’s a different funding picture.”

While the DOD’s chief information officer is still working to finalize the aggregate cyber and IT budget items, one area that is certain to receive investment is the Defense Department’s commitment to a data-centric DOD. Laid out in the first enterprise wide data strategy, the Pentagon is working on a plan for major data programs like Advana, which integrates business systems into a unified platform, into the hands of the combatant commands. While JEDI is still under ongoing litigation, the Deputy Secretary of Defense recently noted that the move to a cloud architecture will be vital to how the Department innovates and achieves a data-centric military.

Also critical to the Administration’s new defense agenda will be how the Department approaches the future of work. The Air Force and Navy recently released memos and guidance to keep in-person staffing at the Pentagon at just 50 percent after the pandemic subsides. Officials rushed to expand remote access to defense networks in March of 2020. The forced experiment proved successful; nearly 90 percent of Pentagon employees say working remotely hasn’t hurt productivity. In June, the DOD CIO plans to release its higher impact level solution called Commercial Virtual Remote (CVR) to support mass telework.

Service-by-Service Budget Highlights

The U.S. Army would receive $173 billion under the Pentagon’s fiscal 2022 budget request, down from $176.6 billion in 2021. To make room for its shrinking budget, the U.S. Army has listed 37 programs to be trimmed in fiscal 2022. Most of the reductions and investments are tied to programs where the funding is being used for the service’s “31+4” modernization efforts – 31 signature systems that are critical for realizing multi-domain operations.
- The topline budget includes $65.5 billion for operations and maintenance; $66.2 billion for personnel, $21.3 billion for procurement; and $12.8 billion for RDT&E.

$11.3 billion is included for the Army’s Big Six: long-range precision fires ($1.5 billion), the next-generation combat vehicle, future vertical lift ($1.6 billion), the network, air-and-missile defense, and soldier lethality.
$980 million on upgrading 70 M1A1 Abrams tanks to the M1A2 configuration, which includes improved tank and crew survivability, night vision, and computers.

$854 million on its Integrated Visual Augmented System goggles, or IVAS, which increases situational awareness for soldiers during operations.

The U.S. Air Force requested a $156.3 billion budget – a $2.3 billion increase over 2021 – and is looking to cut thousands of flying hours and scores of combat aircraft to make room for modest increases in personnel and modernization spending.
- The topline budget request includes $63.2 billion for operations and maintenance, but that number now includes overseas operations funds that have been shifted from the now-closed overseas contingency fund account; $22.8 billion for procurement; and $28.8 billion for RDT&E
- The Air Force proposes retiring 42 A-10 Thunderbolt II ground attack aircraft, 20 C-130 aircraft of multiple variants, four E-8 Joint Surveillance Target Attack Radar System (JSTARS); 48 F-15 C/D and 47 F-16 C/D fighter jet variants; 18 KC-135R/T receiver-capable tankers and 14 KC-10 tankers.
- Increased funding for the B-52 from $483 million in 2021 to $716 million in 2022 to support “the most comprehensive modernization of the B-52 in its history, including new engines and radar systems to extend this 1950s-era bomber as a credible deterrent through 2050.
- The Air Force’s RDT&E request prioritizes $2.5 billion for continued development of the Ground Based Strategic Deterrent; $609 million on the Long Range Standoff Weapon; $1.52 billion for the service’s sixth-generation fighter program, Next-Generation Air Dominance; and $2.87 billion on the B-21 next-generation strategic bomber
- Lawmakers are already pushing back on some of the proposed retirements, particularly the C-130s, which are part of National Guard units across the country.
The U.S. Navy spending proposal defies calls to buy extra ships to free funds for operations and maintenance while the U.S. Marine Corps gets a boost. The President’s decision to withdraw resources from Afghanistan means that the Department of the Navy will get a portion of the Army cuts, with the Navy receiving $163.8 billion and the Marines $47.8 billion.
- The topline Naval budget includes $71.2 billion for operations and maintenance; $56.6 billion for personnel; $58.2 billion for procurement; and $22.6 billion for RDT&E
- $22.6 billion of procurement spending will go towards shipbuilding—eight new ships, including two Virginia-class submarines, one destroyer, one guided missile frigate, one replenishment oiler, one ocean surveillance ship, and two towing, salvage, and rescue ships
- $16.5 billion to buy 107 aircraft, including 20 F-35C and 17 F-35B Lightning II stealth fighters, eight MV-22B Ospreys, six Medium Altitude Long Endurance-Tactical unmanned systems, and 36 TH-73A training helicopters.
The U.S. Space Force budget outlook calls for $17.4 billion up from $15.2 billion in 2021. The 2020 request seeks to grow its active duty end strength to 8,400 Guardians, which includes 2,020 civilian positions for space acquisition. Congress has repeatedly pressed the Space Force to build up its acquisition workforce and speed the delivery of new systems.
- The topline budget requests includes $3.4 billion for operations and maintenance; $2.8 billion for procurement; and $11.3 billion for RDT&E
- $1.4 billion for two GPS III Follow-on satellites that have new spot beam anti-jam capabilities
- Funding for five National Security Space Launch vehicles
- $2.451 billion for a Next-Generation Overhead Persistent Infrared missile warning system, which is meant to replace the Space Based Infrared Systems as well as reshape missile warning and missile defense to provide better protection for overhead satellites
- $43.2 million to create a Space Warfighting Analysis Center to support new wargaming and modeling
- The Space Force is seeking an additional $831.7 million in unfunded priorities to improve building the force on Earth and in space, including:
  - $83 million for Critical blast door, water, ventilation, and sewer improvements at the Cheyenne Mountain Complex in Colorado; $61 million for new payload and propulsion system development; $22 million for space-related crypto systems that support anti-jamming tactical satcom satellites, wideband global satellites, and next-gen OPIR satellite launches