Though the Defense Department’s actual numbers won’t come out until January, federal contract spending for fiscal 2020 is projected to land somewhere upwards of $600 billion — an $89 billion increase over 2019. Around $30 billion of that increase was COVID-related spending.
With a vaccine still on the horizon, and a presidential transition now underway, projections on contract spending for 2021 are murkier than usual. That said, Kevin Plexico, senior vice president for Information Solutions at Deltek, said there are a few things that can be expected.
First, the topline budget caps are already set for next year due to the Bipartisan Budget Act of 2019. They provide for modest increases in discretionary spending, which tends to lead to increases in contract spending. It’s worth noting as well that 2021 is the final year subject to the restrictions of the Budget Control Act.
Second, President-elect Joe Biden has presented a seven-point pandemic response plan, which includes testing and tracing, as well as potentially $25 billion for vaccine development and distribution. It’s likely to include significant spending on personal protective equipment as well, and it’s possible he could invoke the Defense Production Act toward this end.
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