Services, support dominate second quarter federal IT awards

Nearly half of the $11 billion in federal IT contract awards in the second quarter of fiscal 2006 were made for professional services or maintenance support services, according to a new report from Input Inc.

"Older hardware and software has to be maintained which is extremely costly," said Marcus Fedeli, Input's federal opportunity products manager. "But agencies are continuing to look at new options replacing these legacy systems."

The Energy Department and the Air Force drove the majority of contract award activity in the second quarter with nearly $5 billion in combined contract awards, the Reston, Va., market research firm reported.

The bulk of the Energy Department's contracting dollars stemmed from its $2.5 billion award to a joint venture led by Northrop Grumman Corp. called National Security Technologies LLC, Herndon, Va., for the management and operation of the department's Nevada test site, along with its facilities and laboratories.

The Air Force awarded a 10-year, $2 billion contract in January to Lockheed Martin, Bethesda, Md., for a transformational satellite mission operations system.

Nearly $1 billion in set-aside competitions also were awarded, a 17 percent increase from the second quarter of fiscal 2005, Input said. Sixty-three set-asides went to small businesses out of the total of 86 set aside contracts.

Only six set-aside contracts were awarded to Service-Disabled Veteran-Owned Businesses for a total of $40 million. Sixteen set-asides went to 8(a) companies and one award went to a HUBZone firm.

Input is tracking nearly $65 billion in federal programs with award dates expected during the third quarter of fiscal 2006, Fedelli said. "We anticipate the federal government will award more than $4 billion in contracts via set-aside competitions during the third quarter of this fiscal year."