Government networks are aging faster than agencies can fix them. If you’re planning a network upgrade, managing IT procurement, or justifying a capital investment to leadership, you need current data, not headlines. Here are 50+ government IT infrastructure statistics that actually matter for digital government.
Key Takeaways
- The federal government spends over $100 billion on IT annually, but approximately 80% of that goes to maintaining aging systems — not building new ones.
- SLED agencies budgeted $59 billion for IT services in 2024, with physical network infrastructure — cabling, wiring, and voice systems — representing a significant but often undercounted share.
- A cyberattack hit 60% of state and local governments in the past 12 months — and legacy physical infrastructure is a direct contributor to that vulnerability.
- Labor accounts for 64–72% of fiber installation project costs, making contractor selection — not materials — the primary budget variable in government and commercial network projects.
- Only 3 of the 10 critical federal legacy IT systems flagged in 2019 have been fully modernized as of 2025, leaving billions in annual operational costs unresolved.
- Cooperative purchasing vehicles like CMAS and PEPPM are now expanding beyond commodities — procurement officers can use them to contract complex network installation services without a full RFP cycle.
What Are the Latest Government IT Infrastructure Statistics?
Digital government spending has never been larger — or more misallocated. Federal, state, local, and education agencies are among the world’s largest IT buyers. Still, most of that money goes to keeping old systems running rather than building the modern infrastructure that commercial buildings, government facilities, schools, hospitals, and warehouses actually need.
These statistics cover federal and SLED spending, legacy system failures, cybersecurity impact, fiber deployment, and procurement trends — organized to help IT directors, facilities managers, and procurement officers navigate digital transformation in the public sector.
How Much Do Governments Spend on IT Infrastructure?
1. Federal IT spending exceeded $102 billion in 2024.
Reported by the White House Office of Management and Budget, this figure excludes classified spending and Department of Defense IT — meaning the real total is considerably higher. As governments shift toward modern technologies, this number is expected to grow.
2. The FY 2025 civilian federal IT budget was approximately $75 billion.
This covers 24 major federal agencies, excluding the Department of Defense, per OMB’s annual Analytical Perspectives — the primary dataset for tracking government technology investment trends.
3. The Department of Homeland Security’s IT budget jumped 23% year-over-year in FY 2025 to around $11 billion.
That increase reflects cybersecurity priorities and infrastructure modernization across FEMA, CBP, and CISA — each requiring physical network upgrades, including structured cabling and fiber runs, as departments expand their digital government capabilities.
4. The Department of Energy’s IT budget rose 37% in FY 2025 to $5.5 billion.
National lab network upgrades, data center consolidation, and energy grid IT integration are driving the increase — all of which require high-density cabling and fiber-optic installations to support operations at scale.
5. SLED agencies budgeted $138.9 billion across all categories in 2024, with IT services accounting for $59 billion.
The state, local, and education market rivals the federal civilian IT budget in scale, with both IT services and software products expected to grow through 2025 and beyond.
6. SLED IT spending grew at 6% per year from 2021 to 2024 — up from just 1% annually in prior years.
The ARPA stimulus era accelerated technology adoption at the state and local levels, with structured cabling, fiber, and high-density Wi-Fi emerging as downstream requirements for every new system deployment.
7. The SLED market is projected to grow from $74 billion in 2024 to nearly $100 billion by 2026.
Network infrastructure services — structured cabling, fiber installation, and wireless deployment across government buildings, school campuses, and healthcare facilities — are expected to hold steady through this growth period as agencies build the physical foundation for digital transformation.
8. Chicago Public Schools allocated $20 million specifically for technology wiring, cabling, and voice network maintenance in a single fiscal year.
One of the few publicly available data points on what a large school district actually spends on physical network infrastructure — a useful benchmark for K-12 IT directors evaluating cabling line items.
9. SLED bid volumes declined about 5% in 2024 following the end of ARPA stimulus, but IT maintained a stronger priority than most sectors.
IT spending continued to grow in dollar terms even as bid counts dipped, consistent with the efficiency mandate most facilities managers and IT directors are operating under in the near term.
10. Total IT services spending worldwide hit $1.61 trillion in 2024, with government representing one of the largest verticals.
This figure reflects the infrastructure investment priorities and demand that trickle down to state, county, school district, and commercial enterprise projects — driving innovation across every sector.
What Percentage of Government IT Spending Goes to Legacy Systems?
11. Approximately 80% of federal IT budgets go to operating and maintaining existing systems — including legacy infrastructure.
This means roughly $80 of every $100 spent on information technology is consumed before any new investment begins — a dynamic that plays out equally at the state and local level, where facilities managers often inherit buildings with decades-old cabling plants.
12. Only 3 of the 10 critical federal legacy IT systems flagged by GAO in 2019 have been fully modernized as of 2025.
The remaining seven range in age from 23 to 59 years and carry known cybersecurity vulnerabilities that cannot be patched without full modernization, which requires physical infrastructure upgrades before new platforms can be deployed at scale.
13. The remaining seven unmodernized legacy systems cost hundreds of millions of dollars annually in operational costs alone.
GAO’s July 2025 audit confirmed that agencies lack comprehensive modernization plans, meaning both the software and the physical network infrastructure supporting these systems will continue to consume budgets indefinitely.
14. The IRS spent over $39 million in FY 2024 to maintain and operate its legacy IT systems.
Despite $2 billion in Inflation Reduction Act modernization funding, approximately 63% of IRS IT systems remain legacy systems, and none have been decommissioned. Budget constraints continue to slow the transition to modern platforms.
15. Eight of the 11 most critical federal legacy systems use outdated programming languages like COBOL or Assembly.
Four have unsupported hardware or software, and seven are running with known security vulnerabilities that only full replacement — not patching — can fix. The physical cabling and switching infrastructure connecting these systems is often equally outdated.
16. Nearly 70% of government agencies cite legacy infrastructure as their single biggest modernization hurdle.
A 2024 EY survey found this consistent across federal and state agencies. Software modernization stalls not because of a lack of planning, but because the physical infrastructure underneath — cabling, switching, and wireless layers — is too old to support modern platforms, digital identity systems, and governance requirements.
17. The VA paused its EHR modernization in April 2023 after deployment to five sites, and users remained generally dissatisfied as late as early 2025.
The agency deployed new software without adequate physical infrastructure at each site, and network performance failures directly contributed to clinical staff frustration — underscoring why infrastructure strategy must precede software rollout.
18. The FAA found that 105 of its 138 legacy air traffic control systems were deemed unsustainable or potentially unsustainable.
Of those, 58 had critical operational impacts on national airspace safety. Integrating emerging technologies into these environments is impossible without first replacing the physical network infrastructure and tools that connect them.
What Are the National Metrics for Digital Infrastructure & Public Services?
19. Over 60% of U.S. households now have access to fiber broadband, with 11% growth in fiber deployment in 2025 alone.
The Fiber Broadband Association’s 2025 annual report confirmed this milestone, driven primarily by private-sector investment as the BEAD program implementation proceeds through state-level planning. Broader access to fiber infrastructure is a direct enabler of digital government services and public service delivery at the local level.
20. The federal government committed $42.45 billion to broadband infrastructure through the BEAD program.
For contractors serving schools, government buildings, and commercial facilities, the transition from policy to physical deployment creates sustained demand and market growth through 2027 and beyond.
21. Fiber deployment in rural areas lags — only 45% of rural U.S. locations had fiber access as of June 2025.
Urban and suburban coverage is 70% and 62%, respectively. Government facilities in rural areas — county courthouses, rural schools, public health offices — represent a meaningful share of the remaining installation gap, where secure, high-speed connectivity directly supports public services.
22. Labor accounts for 64% of fiber project costs when installed above ground and 72% when installed below ground.
This Fiber Broadband Association finding reframes the government and commercial infrastructure conversation: contractor expertise — not hardware — is the primary budget variable in any fiber optic cable installation project.
23. The 2025 ASCE Infrastructure Report Card graded U.S. broadband at C+ — its debut category in the report.
ASCE estimates $9.1 trillion would be needed to bring all 18 infrastructure categories to a state of good repair. Broadband’s inclusion in the report signals growing recognition of digital infrastructure as foundational to public services and economic development.
24. An estimated 12.7 million U.S. households still do not have a broadband subscription, whether at home or through a mobile device.
This availability gap is concentrated in areas where government-funded broadband expansion and E-Rate programs are most active — and where physical installation contractors are most needed to close the digital divide and improve public service delivery.
25. Nearly 450 municipal broadband networks are now operating across the country as of January 2024.
Local governments building their own fiber networks require physical installation partners with government contracting experience and access to cooperative purchasing vehicles to deliver these projects efficiently and transparently.
26. The wireless infrastructure industry deployed more than 651,000 structures supporting wireless infrastructure nationwide by the end of 2024.
The U.S. cellular industry invested more than $10.8 billion in network capacity expansion in 2024, including fiber backhaul — the structured cabling and fiber runs connecting towers and small cells to the broader network — enabling faster adoption of connected services across both public and private sector environments.
27. The digital infrastructure market is projected to grow from $360 billion in 2025 to over $1 trillion by 2031 at a 20% CAGR.
Government agencies, commercial enterprises, healthcare systems, and education institutions are all significant contributors to this growth — all requiring physical network installation and ongoing operations at the facility level.
What Is Driving Government Network Modernization and IT Upgrades?
28. SLED IT spending grew more than 6x faster from 2021 to 2024 than in prior years.
State and local governments used ARPA funds to accelerate deferred digital transformation — including cabling replacements and wireless overhauls in schools, courthouses, and government office buildings.
29. Artificial intelligence, cybersecurity, and cloud computing are the three strongest growth categories in SLED IT spending through 2028.
All three require upgraded physical infrastructure: artificial intelligence needs higher-bandwidth cabling, cybersecurity requires network segmentation, and cloud computing demands reliable high-throughput LAN infrastructure and Wi-Fi network installation at every facility.
30. Over 35% of government legacy applications are predicted to be replaced by low-code or cloud computing solutions by 2025, per Gartner.
New cloud-based applications frequently run on old cabling and switches — a performance and security gap that facilities managers and IT directors need to address proactively as part of any digital transformation strategy.
31. The SLED contracting market is expected to return to 4% annual growth by 2026 after the post-ARPA reset.
Network infrastructure services — cabling, fiber, Wi-Fi — are typically among the first projects agencies restart after a budget freeze, making 2025–2026 an active window for digital government implementation across the public sector.
32. Zero-trust architecture adoption is accelerating across federal agencies following CISA guidance and Executive Order 14028.
Zero trust requires network segmentation and digital identity verification at every access point — which cannot be implemented effectively on flat, unstructured networks. Properly structured cabling is a prerequisite for zero-trust governance in any government or commercial facility.
33. Cloud computing adoption in government is creating downstream demand for in-building network upgrades.
Agencies — and commercial tenants — frequently discover their buildings’ physical networks were never designed for cloud computing workloads, and aging cabling becomes the performance bottleneck after migration.
34. The IT Infrastructure Services Market was valued at $76.85 billion in 2024 and is projected to reach $247.11 billion by 2035 at an 11.2% CAGR.
Government agencies, commercial office buildings, healthcare facilities, and educational institutions are core customers, with physical infrastructure services serving as the foundation for all IT system categories, driving this market growth.
35. Post-ARPA, many SLED governments are prioritizing consolidated IT contracts over fragmented vendor relationships.
Contractors who handle cabling, fiber, and Wi-Fi under a single contract vehicle reduce procurement complexity and improve operational efficiency for agency IT directors and facilities managers.
What Are the Biggest Government IT Infrastructure Challenges?
36. 60% of state and local governments experienced a cyberattack in the past 12 months.
Government is a high-value target because of the sensitive data it holds and the disruption potential of taking public services offline, and because poor physical network segmentation makes lateral attacker movement significantly easier once access is gained.
37. Government ransomware attacks increased 300% in 2024 compared to 2023.
This acceleration ties directly to legacy infrastructure vulnerabilities: outdated network equipment and unsegmented cabling in government buildings undermine data security and make it easier for attackers to achieve lateral movement once inside a perimeter.
38. The average cost of a data breach for government entities reached $9.5 million in 2024.
That figure covers incident response, remediation, and service disruption — and does not include the cost of emergency physical infrastructure replacement that often follows a major breach affecting sensitive government data.
39. During the first eight months of 2023, malware attacks against state and local governments climbed 148%, with ransomware incidents also rising by 51%.
The physical network layer — how devices are connected, segmented, and authenticated — directly determines how far an attacker can spread through government systems and datasets after initial access.
40. 45% of municipalities reported service interruptions due to cyber incidents in 2024.
911 systems, permit processes, tax payments, and benefits administration all depend on functional IT infrastructure. The physical network — including properly installed low voltage contractor services — is the foundation that keeps these public services connected and available.
41. 79% of nation-state cyberattacks target government agencies, NGOs, and think tanks.
This threat profile requires a secure network infrastructure designed with governance and data security as primary constraints across every facility in a government agency’s portfolio.
42. Supply chain attacks targeting government contractors have risen 150% since 2023.
Network installation contractors on government projects are now subject to stricter personnel screening and documentation requirements as agencies strengthen governance and tighten third-party vendor security controls.
43. 88% of cybersecurity breaches have a human error component.
Properly installed and documented physical infrastructure — labeled cabling, clean patch work, documented network maps — reduces misconfiguration vulnerabilities and supports transparency in network operations across government environments.
How Are Federal Agencies Spending on IT and Procurement?
44. The federal government spends approximately $102 billion on IT annually, but only about 20% goes to new investment.
Addressing this imbalance requires accelerating digital transformation — which means upgrading physical infrastructure in federal buildings before new software and cloud services can be deployed effectively.
45. Federal agencies increasingly use cooperative purchasing vehicles to bypass slow RFP cycles.
CMAS, PEPPM, NASPO ValuePoint, BuyBoard, and OMNIA Partners allow agencies to purchase structured cabling and fiber installation from pre-vetted contractors without issuing a new competitive bid — improving procurement efficiency across departments.
46. SLED governments saw a 5% decline in formal bid volumes in 2024 — but cooperative purchasing activity continued to grow.
Agencies under budget constraints preferred the speed and simplicity of existing contract vehicles over new competitive procurements — an important planning consideration for contractors and agencies targeting 2025–2026 project cycles.
47. The E-Rate program funds network infrastructure for schools and libraries — and remains underutilized by many eligible institutions.
Eligible uses include structured cabling, fiber optic installation, and wireless access point deployment. Many smaller rural districts don’t fully leverage available annual funding despite clear benefits for student connectivity and public service delivery.
48. DHS implemented new vendor security requirements across 70% of federal agencies as a result of supply chain attacks.
Network installation contractors on government projects are now subject to stronger documentation, screening, and data security control requirements to maintain compliance and protect sensitive systems.
49. The Technology Modernization Fund provides inter-agency loans for IT modernization at federal agencies.
Network infrastructure upgrades are eligible uses when tied to a documented modernization plan — making TMF a viable funding pathway for cabling or fiber projects supporting a system migration and broader digital government strategy.
50. SLED contracting is expected to grow from $74 billion in 2024 toward $100 billion by 2026, with IT maintaining priority despite budget constraints.
Government IT contracting is consolidating around vendors with proven compliance track records, cooperative purchasing participation, and multi-scope capabilities that deliver efficiency at scale.
How Is AI Reshaping Government Digital Transformation?
51. Artificial intelligence is by far the strongest growth category in SLED IT services through 2028, per GovWin forecasts.
Every AI deployment requires high-throughput network infrastructure — low-latency cabling, reliable wireless, and adequate bandwidth at every government building or campus facility to support real-time data processing and automation workflows.
52. 66% of organizations expect artificial intelligence to have a significant impact on cybersecurity in 2025, but only 37% have processes to assess AI tool security before deployment.
AI-driven security tools depend on the physical network layer for data feeds — and facilities without modern structured cabling and interoperability between systems cannot fully support these technologies.
53. Federal agencies are adopting Generative AI tools to improve productivity across document management, research, and procurement processes.
This shift in agency culture toward automation and AI-assisted workflows increases demand for reliable, high-throughput network infrastructure — and favors contractors with multi-scope capabilities and strong workforce capacity.
54. AI and cloud infrastructure combined are expected to be the top two drivers of SLED IT dollar growth through 2028.
Both require physical infrastructure investment. AI workloads push bandwidth demands beyond what most aging government and commercial building networks were designed to handle — making network modernization a strategic foundation for any digital transformation initiative.
55. The global AI infrastructure market is growing at 16–30% annually, depending on segment, with government a top-five end user.
Defense, intelligence, and public health agencies are among the earliest AI infrastructure investors — and physical network installation is the foundation for each deployment, whether in a federal building, a school data center, or a hospital network operations environment.
How Are Local Governments Using Digital Infrastructure to Improve Public Services?
56. Nearly 450 municipal broadband networks are now operating across the U.S. as of January 2024.
Municipal fiber projects generate follow-on work for in-building network installation across government offices, libraries, community centers, and public safety facilities — directly improving local public services and expanding digital government capabilities for residents.
57. The city of Chattanooga’s EPB fiber project generated over $5.3 billion in economic impact and 10,400 jobs in the 15 years following deployment.
The project required extensive structured cabling and low-voltage installation across a 600-square-mile service area and is now a national model for how digital infrastructure investment drives local economic development and innovation.
58. Household income in Chattanooga doubled over the period of the EPB fiber buildout — from $36,000 to $72,500 by 2024.
Local governments increasingly understand that fiber investment builds public trust while driving economic development — and that every project requires a skilled low-voltage workforce to execute at scale.
59. New York State’s ConnectALL Municipal Infrastructure Program distributed $268 million for fiber infrastructure projects across 24 counties.
These projects delivered more than 2,300 miles of new fiber across 68 wireless hubs, each requiring licensed low-voltage contractors with established government procurement relationships and the workforce capacity to deliver on schedule.
60. The Bipartisan Infrastructure Law included $65 billion for broadband — the centerpiece of which is $42.45 billion in BEAD funding distributed to all 50 states and territories.
The transition from planning to construction by state broadband offices is creating ongoing demand for fiber installation and structured cabling contractors with verified government project experience across a broad range of facilities and conditions.
Also read:
- School Safety Technology Statistics
- What Is the CJIS Security Policy
- Key Statistics of the Digital Divide
FAQs
How long does a government network infrastructure upgrade typically take?
A structured cabling upgrade for a single government building typically takes 2–8 weeks. Campus-wide fiber installation — serving a school district, hospital complex, or multi-building government campus — runs 3–12 months depending on trenching permits, inspection schedules, and scope. Projects in occupied facilities require phased implementation to avoid service interruption. Underground fiber runs add permitting lead time that must be built into the project plan from the start.
What is zero-trust architecture and why are government agencies adopting it?
Zero trust is a security framework in which every device, user, and connection is continuously verified before being granted access — eliminating the assumption that anything inside a network perimeter is automatically trusted. Digital identity management is central to zero trust: every access request is tied to a verified identity, logged for transparency, and evaluated against governance policies. Federal agencies began adopting zero trust following Executive Order 14028 in 2021, and CISA provided a maturity model for civilian agencies. Structured cabling designed to support VLANs, microsegmentation, and access layer authentication is a prerequisite for zero trust in any government or commercial facility.
What network infrastructure standards must government facilities meet?
TIA-568 governs structured cabling for commercial and government buildings, including Cat6A, fiber runs, and telecommunications room design. BICSI standards apply to low-voltage systems in government facilities. NDAA Section 889 prohibits the use of certain Chinese-manufactured network equipment in federal facilities, affecting hardware selection for any government network project. State and local facilities follow TIA-568, along with state-specific building and fire codes governing low-voltage installations. Contractors must also meet data security and access control requirements tied to the specific agency environment.
How do government agencies procure network installation services?
Most SLED agencies use one of three paths. A competitive RFP takes 90–180 days from publication to award. Cooperative purchasing through CMAS, PEPPM, NASPO ValuePoint, BuyBoard, or OMNIA Partners allows agencies to contract directly with pre-vetted vendors without running a new bid. Sole-source procurement is available for urgent or specialized needs, subject to strict justification requirements. Cooperative purchasing is now a standard pathway for network infrastructure services at the school district, county, and state agency level — improving efficiency and enabling faster digital government implementation.
In Summary
Government IT infrastructure is under pressure from aging systems, rising cyber threats, post-ARPA budget constraints, and the physical demands of artificial intelligence and zero trust architecture. The statistics in this article point to one consistent conclusion: the physical layer — cabling, fiber, and wireless — is the foundation that software spending alone cannot replace. That reality applies equally to commercial office buildings, warehouses, manufacturing facilities, hospitals, and school campuses.
The Network Installers holds a C7 Low Voltage Systems Contractor license, is an approved CMAS and PEPPM vendor, and has 19+ years of experience serving government, commercial, education, and healthcare facilities nationwide. If you’re planning a network upgrade for a government or SLED project, explore our government and SLED network installation services or contact us to discuss your project scope.
References
- https://www.whitehouse.gov/omb/budget/analytical-perspectives/
- https://www.gao.gov/products/gao-25-107795
- https://oversight.house.gov/release/hearing-wrap-up-it-modernization-will-increase-government-efficiency-and-effectiveness/
- https://federalnewsnetwork.com/it-modernization/2025/09/irs-touts-major-progress-on-it-modernization-but-has-yet-to-decommission-legacy-systems/
- https://www.govtech.com/opinion/in-2024-sled-it-spending-takes-a-whole-of-state-focus
- https://www.deltek.com/en/blog/sled-contracting-growth-2025-2026
- https://www.govtech.com/network/with-private-investment-fiber-broadband-deployment-is-rising
- https://infrastructurereportcard.org/cat-item/broadband-infrastructure/
- https://statescoop.com/ransomware-malware-cyberattacks-cis-report-2024/
- https://www.marketresearchfuture.com/reports/it-infrastructure-services-market-8639
