A new Deltek study on the future of the federal information technology sector projects the IT outsourcing market to increase from $26 billion in fiscal year to $26.7 billion for fiscal 2018.

The GovWin IQ report projects agencies to increasingly on outsourcing and contractor support driven by budget and skills gap issues as agencies work harder to meet objectives within their means, Deltek said Monday.

“Agencies will continue to pursue solutions that deliver capabilities such as cloud computing and data center optimization,” said Deniece Peterson, director of federal industry analysis at Deltek.

“The ability to do so without the burden of their own capital investment makes outsourcing a very attractive option in this constrained environment,” she added.

Deltek predicts spending on IT hardware and software to decline from $59.1 billion in fiscal 2013 to $55 billion in fiscal 2018.

The market research firm suggests that contractors adopt new teaming and pricing strategies and study contracting vehicles to pursue acquisition wins.