Fed IT Update: Defense Spending Down, Civilian Spending Up

New research reveals that civilian-related spending is on the rise, although spending by the Department of Defense slipped dramatically in the first quarter, according to Input, a Reston, Va.-based research firm. The DoD results come as no surprise; a downturn was predicted by CIO Linton Wells in a January executive briefing.

Civilian agencies increased spending 205 percent from 4Q '04, according to Input, thanks largely to five departments that awarded a combined total of $15 billion. The Department of Defense, in contrast, dropped nearly 59 percent to $15.6 billion as a result of wartime efforts and increased cost of employee benefits.

Among the big spenders were the Postal Service, which awarded a $3 billion Universal Computing Connectivity (UCC) contract to Lockheed Martin, and the Department of Energy (DoE), which led spending with a $4.8 billion management and operations contract to Battelle Energy Alliance. The DoE could look to VARs moving forward in its effort to ensure IT underpinnings are firming in place.

"The Department of Energy is steeped in technology," said CIO Rose Parkes at a panel discussion sponsored by the Bethesda chapter of the Armed Forces Communications and Electronics Association (AFCEA). "But the utility has to be there. An understanding between vendor and government becomes easier when the proper tools are available."

Parkes expects reliance on contractors to continue into 2005, as the agency strives also to "turn the lights off" through energy conservation. "We do a skills assessment and look for the gaps, then depend on contractors to bring specialized expertise," Parkes says. "It starts with an agreement between contractors and government, then moves to a place where both benefit from that cooperation."