Report: Labor Shortage May Double Fed IT Outsourcing

Facing a growing shortage of information technology workers, the federal government may double its spending on outsourcing over the next four years, according to a report released Dec. 10 by IT research company Input Inc. of Chantilly, Va.

The new report, Federal Outsourcing MarketView, FY 2001, estimates government spending for IT outsourcing will jump from $6.3 billion in 2001 to $13.2 billion in 2006.

The largest driver of this growth will be the government's human capital crisis, said Payton Smith, lead analyst for strategic market research at Input.

"As significant numbers of federal employees retire from program management and technical positions over the next five years, outsourcing may become the only viable option for many agencies," Smith said.

Outsourcing demand is expected to grow in areas such as infrastructure services, applications services, desktop services, network management and application management.

The report was prepared by Input's public-sector services group and may be purchased by contacting Smith at psmith@input.com.