DHS, military spur IT growth

The Homeland Security Department and the Pentagon are the main drivers behind federal IT spending growth, but systems integrators can still expect to see the Office of Management and Budget exerting pressure to control spending.

From 2005 to 2010, the federal IT budget will grow at an annual rate of 5.3 percent to $91.4 billion in fiscal 2010 from $70.7 billion in fiscal 2005, according to the market research firm Input Inc. of Reston, Va.

Of the $91.4 billion in 2010, $78.6 billion will go to contractors, compared to $59 billion in 2005, Input said. The contracted portion will grow at an annual clip of 5.9 percent.

The civilian IT budget will grow by 5.5 percent annually to $33.1 billion in fiscal 2010 from $25.4 billion in 2005. The defense IT budget will grow by 6.1 percent annually to $28.3 billion in 2010 from $21.1 billion.

DHS has been a primary recipient of budget increases since it's creation in 2003. The department will have $4.4 billion in contracted IT spending in fiscal 2005 and is projected to have $6.4 billion in 2010, although department spending will level off in fiscal 2007, Input said.

The department has spent huge amounts of money on IT-related projects, including the U.S. Visitor and Immigrant Status Indicator Technology, Registered Traveler and the Transportation Worker Identification Credential programs. The latter two programs are in pilot stages but are expected to be implemented fully throughout the country.

Now, the department is looking to link programs with common functions, so it can work more effectively and efficiently. DHS Secretary Michael Chertoff and his deputy Michael Jackson are reviewing consolidation plans for DHS' screening services and some of its 22 agencies.

The department is looking at an initial consolidation of a handful of IT-related screening projects under one centralized office, called the Office of Screening Coordination Operations, in the Border and Transportation Security Directorate. These programs add up to $847 million, according to the president's proposed budget for fiscal 2006.

In its efforts to screen cargo more quickly, DHS is also working on developing and deploying new electronic manifest technology to get detailed lists of what ships and trucks are hauling and where they are coming from before they reach U.S. borders, said Charles Armstrong, chief information officer for the department's Customs and Border Protection division and the department's acting resource director.

The electronic manifest system would allow quicker border crossings for traded goods and a more effective means of locating suspicious cargo.

DHS is also working to develop a common operating picture across the department with its homeland security network, which will ramp up in 2006, Armstrong said. This consolidation project will deploy some standard tools across all DHS' agencies.

Congress is keeping a watchful eye on DHS spending, said Scott Hastings, CIO for the U.S. Visit program. Lawmakers want a second look at the appropriated dollars for major projects.

"We have our spending plan reviewed on a yearly basis, even after the appropriation is made," Hastings said.



The Defense Department also has been a major driver of the federal IT budget to fulfill the administration's plan of transforming the military in communications, networking, knowledge management and business infrastructure.

"Right now, we're focusing on how to structure and reorganize better," said James Buckner, CIO of the Army Materiel Command. He called the fiscal 2005 budget "adequate," but said the proposed 2006 numbers are down significantly.

However, the military expects a significant supplemental budget because of the war in Iraq.

The Army is reworking its Knowledge Management program, its strategy to transform itself into a network-centric, knowledge-based organization, Buckner said. The Army Knowledge Management strategy includes Web-enabling all applications and managing IT from an enterprise perspective to improve performance and let soldiers get information and services via the Internet from anywhere in the world.

OMB will maintain its strong hold over IT budgeting, placing high importance on security, federal enterprise architecture and e-government initiatives, according to Input.

OMB is the primary force pushing agencies to comply with IT goals set by the President's Management Agenda, which has set quarterly targets for agencies to meet. Bush's victory in last year's presidential election ensures four more years of his management agenda.

OMB will have a "very steady, stable and predictable influence" on IT spending, said Payton Smith, director of public sector market analysis for Input.

Staff Writer Roseanne Gerin can be reached at rgerin@postnewsweektech.com.

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