Spotlight on Procurement

The Air Force will spend $5 billion for equipment and services from fiscal 1997 to fiscal 2001

The proposed fiscal 1997 Department of the Air Force information technology budget of $2.1 billion puts the Air Force second among the largest agency infotech budgets.


The service is currently pursuing at least 42 major infotech contracts. They include the $1 billion Desktop V contracts held by Hughes Data Systems and Zenith Data Systems, which were held up due to a series of protests and other hurdles. Air Force buyers are at last able to purchase PCs, notebooks, servers, application software and other components from these contracts.

In addition, the Air Force recently awarded its portion of the DoD-wide Global Combat Support System initiative to Lockheed Martin Corp., Bethesda, Md. The $900 million indefinite-delivery, indefinite-quantity effort promises to replace the Air Force's 35 remaining "stovepiped" base-level information systems.

Considering the current major infotech contracts, potential new awards and the steady growth in the contracted portion of the infotech budget, the Air Force will spend $5 billion for equipment and services from fiscal 1997 to fiscal 2001, according to projections by Input, a market research company in Vienna, Va. The contracted to vendors portion of the Air Force's infotech budget is estimated to increase to $915 million in 1997 from $864 million in 1996. A look at all executive agencies for the contracted portion of the infotech budget shows a drastically different distribution, with the Air Force dropping to 10th among all executive agency infotech budgets.

The Air Force spends more than 50 percent of its infotech dollars on personnel, as compared to 30 percent for the other services and 15 percent for the Office of The Secretary of Defense. By contrast, civilian agencies average 20 percent. Historically, the Air Force has not contracted as large a portion of its total infotech budget as other defense agencies. Nevertheless, this figure should grow to $1.1 billion in 2001.

The infotech budget of the Air Force is projected to grow at a 1 percent compound annual growth rate over the next several years. High growth is expected for capital purchases of infotech equipment and for purchases and leases of software. Spending on personnel comprised 56 percent, or $1.1 billion, of the Air Force's total infotech budget in 1996, and is declining 3 percent annually. At least 80 major infotech contracts have been awarded at the Air Force. Currently, the agency has 27 major IDIQ contract vehicles in place, which have a potential combined life-time value of $10.5 billion. The Air Force will significantly increase its use of agency and interagency IDIQ contracts and General Services Administration Multiple Award Schedules in response to the simplification of regulations governing the purchase of commercial items, according to Input projections.


Norm Berthaut is director of Input's Federal IT Market Analysis Program. His e-mail address is nberthaut@inputgov.com


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