The U.S. government awarded nearly $11 billion in federal contracts to companies in the information technology sector between January and March of this year, according to a report released Wednesday by INPUT, a leading authority on government business.
There was no growth in the sector over the same period in the prior year, with the total value of IT contracts hovering around $11 billion in the second quarter of fiscal 2005. However, the report forecast an uptick for the third quarter. Nearly $65 billion in contracts should be awarded between April and June.
The fact that the sector remained flat could reflect a slowdown in the government’s binge on defense spending in a post-9/11 world, said Bob Cohen, senior vice president of the Information Technology Association of America, an Arlington-based trade association that represents many of the country’s top IT firms.
“The federal government is basically coming through a period where they have made substantial investments in information technology,” Cohen said. “After having a large infusion of technology into various agencies, you would expect to see a flattening out as agencies assimilate those investments and decide how they’re going to move forward.”
The Air Force accounted for $2.45 billion of the total figure, including a contract awarded to Bethesda-based Lockheed Martin in January for a transformational satellite mission operations system potentially worth $2 billion over the next 10 years.
While the report didn’t break out all of the federal contract locations, much of the activity is happening in the Washington region, Cohen said.
“One just needs to look around at the tremendous growth in the Washington area to realize D.C. has become a substantial regional hotbed of information technology, and federal spending is a big part of the reason,” he said.
Where the money is
Top five departments for IT sector federal contracting:
» Department of Energy – $2.5 billion
» Air Force – $2.45 billion
» Navy – $84 million
» NASA – $83 million
» Department of Transportation – $65 million
» IT contracts represented about 7 percent of all federal contracts in 2005 and 2006.
Source: INPUT, second quarter, FY 2006
