Report: Fed IT spending to top $67 billion by 2008

Federal government spending on information technology is expected to grow to $67.1 billion by fiscal 2008, an increase of $14 billion over planned 2003 spending, according to a new market forecast by an IT trade association.


The Government Electronics and Information Technology Association is predicting that by 2008, spending on defense IT will hit $34 billion, up from a planned $26.6 billion in 2003. Spending by civilian agencies will reach $33.1 billion, up from $26.5 billion.


The estimates are based on Office of Management and Budget documents and interviews GEIA conducts with defense and civil agency leaders, industry officials and analysts. The full results of the forecast are the cornerstone of GEIA's annual conference to be held Oct. 29-31 in Tysons Corner, Va.


In the near term, the two biggest influences on government IT spending are the economy and the war on terrorism, according to GEIA.


Agencies are under pressure to control discretionary spending because of falling tax revenue, but at the same time the government is increasing spending to combat terrorism.

The real winners in the battle for discretionary dollars are the Department of Defense and homeland security, said Mary Freeman, chairwoman of GEIA's budget forecast and director of business development for the government unit of Verizon Communications Inc., New York. The result is a cloudy budget picture for many agencies that may not clear up for some time, she said.


One government official described the environment as a roller coaster, GEIA said.


"Industry has ample opportunity to partner with government today, but they need to know each agency's business drivers and offer solutions, not products," said Angela Firkins, chairwoman of GEIA's civil agency forecast team and director of business development for the government unit of Affiliated Computer Services Inc., Dallas. "The challenge is finding the real opportunities out there amongst the noise."