Hard times push IT associations to consider merger

An increase in congressional oversight on procurement and reduced money for technology programs have prompted two of Washington's largest information technology associations to discuss merging, according to government IT industry experts. A merger between the Information Technology Association of America and the Government Electronics and Information Technology Association would create an organization that would represent more than 380 technology companies, many of which contract with federal agencies. The merger would combine GEIA's expertise in business development, market forecasts and standards development with ITAA's strong government relations and policymaking efforts. The merger also gives the lucrative IT industry in Washington more power to influence changes in the landscape that have begun to hurt business, including stepped-up oversight of procurement practices led by Rep. Henry Waxman, D-Calif., chairman of the House Committee on Oversight and Government Reform. "The tone has changed" in Washington, said a veteran IT industry executive, "and it has reverberated into [the IT] space." The executive, who talked on condition of anonymity, said Waxman's investigations into possible procurement abuses and a call for tighter procurement regulations pushed the two organizations to consider merging, and other events also influenced the decision. Those include the Iraq war, which is draining funds from IT initiatives in both civilian agencies and the Defense Department; the frequent occurrence of Congress not passing appropriation bills on time, which delays spending on agency IT projects; and a perceived abuse of power by inspectors general in investigating agencies' IT procurement practices, which has stifled innovation among federal procurement officers."This is a result of those influences," the executive said. Leaders of the two organizations put the merger in a different light. "Both boards saw that the memberships and value propositions of the two organizations are very complementary," said Charlie Greenwald, vice president of communications for ITAA. "Over 30 prominent contractors are members of both organizations. "Their membership is a mix of companies focused on IT and electronics, while our membership consists primarily of IT companies. Both have similar concerns and frequently partner with each other on government contracts."Another benefit of the proposed merger would be the consolidation of influence within the IT industry. "This is a great opportunity for the high-tech industry to start to consolidate their organizations in the same way companies have been consolidating for years," said Dan Heinemeier, president of GEIA. "We hope to create a market leader that other organizations would want to align with."Harris Miller, former president of ITAA and now president and chief executive officer of the Career College Association, said the consolidation was long overdue. "I've long been an advocate of consolidation among the IT industry associations," said Harris. "There are too many policymakers out there. People on the Hill get confused by all the acronyms and organizations. Often the message that they are trying to convey is very similar with a slightly different emphasis. That doesn't help anybody." Harris left ITAA to run for the Senate in Virginia in 2006. He lost to eventual winner Sen. Jim Webb in the Democratic primary. ITAA Chairman Dave Sanders echoed the same sentiment. "We intend to carry industry's message to Washington with a louder and clearer voice," he said. "For too long, our nation's leaders have had to sort through a complex and sometimes inconsistent series of statements and positions to understand industry's needs. This is the first step toward solving that problem." It is likely the merger will be approved by the boards of both organizations since members view the merger "positively," said spokesmen for the ITAA and GEIA. Heinemeier said the boards will vote in early 2008, citing the difficulty of convening during the holiday season. When president of ITAA, Miller said, "We tried many times to combine with other organizations, unsuccessfully. In the 14 years, no one has ever presented me with a counter argument against consolidation. Having two boards and two associations for the same cause doesn't help anybody."