Forecast sees federal IT spending on the rise

Federal IT spending will remain on the fast track through the end of the decade, according to a forecast released today by Input.

Government spending for IT is expected to rise at an annual rate of 5.3 percent, from $70.7 billion this fiscal year to $91.4 billion in fiscal 2010, said Payton Smith, director of public sector market analysis for the Reston, Va., company.

Contracting and outsourcing will play an increasing role in spending patterns, Smith said. Spending for outsourcing will grow 7 percent annually between now and 2010, he said. That compares with projected growth rates of 5.9 percent for communications, 5.8 percent for software, 5.5 percent for professional services and 5.2 percent for equipment.

Several factors underlie Input's projections, among them an anticipated shortfall of qualified IT workers. Homeland security IT spending, which is expected to level off in fiscal 2007 after a rapid rise, also will affect spending patterns. A continued transformation of Defense Department strategies is a third factor, with Defense spending expected to focus on communications, networking, knowledge management and business infrastructure.

Consolidated business platforms and the growing demand for secure systems, as well as the Office of Management and Budget's influence on agency operations, are also expected to play a role in keeping federal IT spending at 7.3 percent of total discretionary spending in 2006.