Intermedium research shows that federal agencies start ramping up their procurement activities in October. While the election may dampen activity this year, we expect that many agencies will increase their procurement activity during the coming months.
While overall agency budgets are announced in May each year, agencies take some time to digest their allocations, and to translate this into ICT projects. This is even more pronounced in the largest agencies with ICT budgets of more than $100m.
Many agencies are adopting a cautious approach to purchasing in the lead-up to the federal election, in anticipation of many changes, irrespective of the election result.
However, life goes on, and agencies continue to issue tenders and finalise contracts, particularly for routine purchases that are unlikely to be impacted by election undertakings. Even during the caretaker period after the election is called, procurement activity continues, albeit at a reduced level.
Intermedium expects that the slowdown in contracting activity evident in this pre-election period to continue for 6-9 months after the election. However, we expect the ICT market to rebound strongly next financial year, the result of spending deferred because of the election, and major new projects required to implement new policy initiatives announced by both parties. Click here for more information about Intermedium's analysis of trends in federal spending during elections.