Agencies' IT budgets on 'roller coaster,' group says

The effort to create a Homeland Security Department has placed several federal agencies' information technology budgets on a "roller coaster," according to an analysis released last week by the Government Electronics and Information Technology Association (GEIA).

The Defense Department and homeland security programs are likely to be the "real winners" in the battle for discretionary dollars in the coming years, according to GEIA, which released a summary of its findings to reporters as a preview of a conference it plans to hold later this month.

The study found that since many civil agencies are becoming "bill payers" for the nation's homeland security requirements, their budgets barely will keep pace with inflation.

"There is a direct correlation between discretionary and information technology budgets, so many of the civil agencies have lower-than-expected information technology growth rates," said Mary Freeman, director of business development for Verizon Communications and GEIA budget forecast team chairwoman.

Freeman added that the ongoing war on terrorism, the potential for war with Iraq and numerous temporary funding resolutions to keep the government running while Congress debates its fiscal 2003 appropriations bills have made the overall budget picture "cloudy, to say the least."

Those factors present "a continuously evolving scenario whose implications will not be fully understood for some time to come," Freeman said.

Despite those concerns, IT budget experts at GEIA still are predicting "solid growth" in federal IT spending over the next five years. The total federal IT budget for fiscal 2003 is projected to be about $53 billion, which would be a 10 percent increase over fiscal 2002.

By fiscal 2008, federal IT spending is likely to reach $67 billion, according to the analysis, which also predicted that the creation of a Homeland Security Department would require "significant" shifts in spending from the Treasury, Transportation and Justice departments.

High-tech companies hoping to do business with the federal government should keep a close watch on those types of budgetary changes, according to Angela Firkins, director of business development for Affiliated Computer Services and chairwoman of GEIA's forecast team for civil agencies.

"Industry has ample opportunity to partner with government today, but they need to know each agency's business drivers and offer solutions, not just products," Firkins said. "The challenge is finding the real opportunities out there amongst the noise of the roller coaster."