First Quarter Federal Contracts Total $28 Billion

The value of federal contracts awarded in the first quarter increased 40 percent compared to the same time last year, with almost $3 billion going to small businesses, according to a report released by Reston, Va.-based research firm Input. Professional services remain in high demand among agencies.

The federal government awarded more than $28 billion in IT-related prime contracts during the first quarter of fiscal year 2006, according to the report; Input expects an additional $75 billion in contracts to be awarded during second quarter.

"A lot of factors can be attributed to the growth, including just an increase in the amount of information being made public," says Marcus Fedeli, manager of federal contract opportunity products at Input. "But you have to say 'wow. It's already starting at $28 billion. That's pretty incredible.'"

The Air Force awarded six contracts valued at more than $10 billion for work relating to its Contract Augmentation Program, which was created to provide military commanders with the ability to augment or relieve forces involved in MOOTW (Military Operations Other than War) environments.

"There are a lot of IT services included in that, including integration, professional engineering services, project management, infrastructure support and contingency operations on the worldwide level," Fedeli says.

In addition to the Air Force, the Army and Department of the Treasury awarded more than $10 billion in contracts combined, including a follow-on for the Army's Total Engineering and Integration Service II (TEIS II) contract and a $3 billion award to multiple vendors for the Total Information Processing Support Services-3 (TIPSS-3) contract. The Department of Energy and other Defense agencies divvied out more than $4.5 billion. Looking ahead to the rest of the year, the majority of opportunities will come out of DoD and to a lesser degree Homeland Security; among the largest contracts awarded will likely be Eagle, which will establish multiple IT support service contracts for DHS.

"Professional services in general usually take the cake," Fedeli says. "While the typical systems integrators continue to win a lot of that business, a lot is being awarded to small businesses, which grew 80 percent this quarter" compared to the same time last year.