Federal Contracting in 2021: Pandemic Focus Predicted

Operation Warp Speed saw several COVID-19 vaccines approved for use just before the end of 2020, but it is clear we are not out of the water yet. As this unprecedented time continues its reign, the federal contracting market should expect the pandemic to shape the outlook for 2021. Federal Agencies contract spending in 2021 will likely be dominated by pandemic related requirements. Bloomberg Government predicted spending to be high on vaccines, telework and digital services.

Bloomberg Government published a report earlier this month about the landscape for federal contracts as the new year begins and the new Biden administration prepares to take over. This comes after civilian agencies’ contract spending hit a record high of $228 billion in fiscal 2020––an increase of 17% ($33.5 billion) from 2019––mainly due to the pandemic.

According to the Bloomberg report, “legislators are considering future economic stimulus spending that could replenish disbursement to select agencies such as the Small Business Administration.” With an additional stimulus package still possible, the landscape for the federal contracting market is largely uncertain, though a pandemic focus and small business inclusion seems to be a good bet.

Besides the pandemic, another major trend Bloomberg predicted is an increase in agency spending on artificial intelligence initiatives in fiscal 2021. “The GSA’s AI Center of Excellence and the Pentagon’s Joint AI Center are aimed at speeding the adoption of AI technologies by civilian and defense agencies, respectively, while the departments of Energy and Veterans Affairs have opened AI research offices,” said the report. “Meanwhile, federal contract spending on AI is on pace to grow by almost 50%, according to BGOV projections, reaching $3 billion in fiscal 2021.”

Author: Paul McVeigh

Source: https://www.govexec.com/management/2020/12/report-pandemic-likely-dominate-federal-contracting-fiscal-2021/171032/

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