Report: Outsourcing to boom

Federal spending on information technology outsourcing services will increase from $6.6 billion in fiscal 2002 to nearly $15 billion by fiscal 2007, a compound annual growth rate of 18 percent, according to a report released by Input Inc., the Chantilly, Va., market research firm.

Pressures to compete nongovernmental activities and difficulty retaining and replacing qualified technical and program management personnel are driving the increase, said Payton Smith, manager of public-sector market analysis services. Legislative obstacles to outsourcing that arose at the end of 2001 largely disappeared in 2002.

"Even though the subject remains politically sensitive, Input expects that the new congressional leadership will foster a generally favorable atmosphere for outsourcing vendors in 2003," Smith said.


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