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Is the GSA Gearing Up to Reshape the Federal Cloud Market?
Hey Federal Contracting Community!
Have you been following the news about the GSA sending out letters to various firms regarding their spending under certain NAICS codes? While these letters initially seemed focused on consulting services, a closer look at the data reveals something potentially bigger – a significant overlap with federal cloud spending. It looks like the General Services Administration (GSA) might be getting ready to shake things up in the cloud market.
The GSA is reportedly scrutinizing spending under several specific NAICS codes, including 541330, 541511, 541512, 541611, 541690, and 541990. What’s interesting is how much cloud-related work falls under these categories. Over the past three fiscal years (FY 2022-2024), identifiable spending on cloud projects under these six codes has averaged a whopping $5.4 billion per year. That’s a sizeable chunk, representing roughly 33.5% of identifiable federal cloud spending annually.
Digging into the data, it’s clear that 541512, Computer Systems Design Services, is the dominant code. Contracting officers assign this code to cloud-related work more than any other across all sectors of the federal government. This includes significant spending on both Cloud Capabilities (application provided) and Cloud Engineering (work implementing). While other codes like 541511 (Custom Computer Programming) also see cloud spending, and there are variations between DOD and Civilian agencies, 541512 stands out.
So, why does this matter? The GSA’s stated intent behind these reviews is to drive down costs. Given the substantial amount of cloud spending flowing through codes like 541512, it seems highly likely that the GSA’s review of work under this code will have a direct impact on the federal cloud market.
It’s worth noting the complexity here. Some companies receiving these GSA letters are identified as resellers, not traditional consulting firms, highlighting potential inconsistencies in how NAICS codes are applied by contracting officers. Despite these nuances and sector-specific spending patterns, the sheer volume of cloud work coded under review categories, particularly 541512, indicates that cloud contractors could be significantly affected.
While we don’t know exactly how deep the impact will go, the GSA’s focus on codes tied to billions in cloud spending, coupled with their goal to reduce costs, suggests changes are on the horizon for the federal cloud landscape.
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