US gov't awarded $11B in IT contracts in Q2

03.05.2006
New U.S. government IT contract awards totaled almost US$11 billion in the second quarter of fiscal year 2006, down just a bit from one year ago, when slightly more than $11 billion in IT contracts were awarded by federal agencies, according to a report from Input, a Reston, Va.-based business development consulting firm.

The report, which was issued Wednesday, said the top five federal agencies for awarding new prime IT contracts in the quarter ending March 31 were the Department of Energy, with $2.5 billion in spending; the Air Force, with $2.45 billion; the Navy, with $840 million; NASA, with $830 million; and the Department of Transportation, with $650 million.

Marcus Fedeli, an analyst at Input, said the $11 billion in new government IT spending represents only contracts that are publicly known through vendor and government reports. Federal IT spending is often not announced because of national security reasons, and sometimes details about IT spending are delayed because of government reporting procedures. Taking those factors into account, Fedeli said the actual figure for the quarter is probably between $15 billion and $20 billion.

Compared to a year ago, overall federal IT spending is down a bit, "but it's nothing out of the ordinary," Fedeli said. "There's major contracts coming up for award in the next quarter," including a 10-year, $45 billion deal for the Department of Homeland Security's Eagle IT procurement centralization project and a $5 billion Veterans Technology Services contract, which is aimed at IT businesses owned by disabled American war veterans.

Overall, federal government IT spending is up over the past few years because of programs fueled by the Iraq war and the fight against terrorism. "You can just look at that Eagle program with DHS," Fedeli said. "Had it not been for the war, there's no way we'd be seeing that now."

Highlights of the government's IT spending in the last quarter included the following: