Defense spending fuels surge in IT contracts

The federal government awarded more than $115 billion in information technology-related prime contracts in 2003, according to a study released Tuesday.

The new figures represent a huge surge in federal technology spending, surpassing the $60 million worth of IT contracts granted in 2002. The 90 percent increase was fueled by the Defense Department, which awarded more than $83 billion in 2003 contracts. The study was conducted by IT consulting firm INPUT.

Pentagon IT contracts emphasize "the impact increases in defense spending have had on the federal IT market," said Brian Terrill, the manager of federal IT contract opportunities at INPUT. "For the first time in a long time, we are seeing growth in defense IT spending outpace growth in civilian IT spending."

Army contracts topped the list of IT awards, bolstered by the $23 billion Communications and Electronics Command Rapid Response Program, which is designed to allow agencies to quickly find, develop, improve, install, test and operate new systems and platforms. Army IT contracts as a whole were worth almost $40 billion.

NASA doled out the most IT awards of any civilian federal agency, with $5.5 billion in contracts.

Excluding the Army's CECOM contract, the top category for federal IT spending was "professional services," according to the INPUT report. The company broadly defined that category as project management, training, planning, engineering, IT support and software development.

Agencies also spent $15.5 billion on outsourcing IT -- including space communications for NASA and oil reserve management for the Energy Department. The report's authors defined outsourcing as a function that is taken over entirely by a contractor.