Federal IT Spending Heads Toward $93.4 Billion

Federal spending on IT is expected to increase 24 percent in the next five years, according to Reston, Va.-based research firm Input, with $80.5 billion contracted to the private sector. Driving that growth will be continued efforts by agencies to meet requirements passed down by the Office of Management and Budget (OMB), increased emphasis on security and health IT, and the Defense Department's ongoing transformation to networked-based processes.

Input expects the federal government to spend a total of $93.4 billion in 2011, with $32.4 billion coming from civilian agencies, $29.8 billion from defense, and the remainder predominantly from a separate intelligence IT budget. Of the various segments, Input expects spending on communications, professional services and outsourcing to grow up to 6 percent. Driving that growth is a shrinking workforce, the Department of Homeland Security's increased focus on interoperability, and agencies' continued move toward commercial off-the-shelf solutions. As outsourcing grows more prevalent, demand for equipment will slow somewhat, with growth hovering around 4 percent, according to Input.

To best position themselves for future opportunities, Input recommends that solution providers respond to OMB's Lines of Business initiative with an understanding of the role technology plays in a given agency's processes, particularly as more and more internal staffs compete to win those opportunities. For that same reason, solution providers should also focus efforts toward teaming with vendors and even the agencies themselves to better accommodate IT requirements.