Input: Large companies share of federal IT pie growing

Subhead: No. of companies in federal market increases at all levels

The percent of federal IT prime contract dollars going to large companies increased by 15 percent from 2003 to 2005, sharply cutting into the share held by small and mid-sized firms, according to Input Inc.

In specific numbers, the large companies' share of federal IT dollars for prime contracts increased from 50 percent in 2003 to 65 percent in 2005, said the Reston, Va., market research firm. For the purposes of its study, Input considered large companies as those with earnings of more than $250 million.

"We have seen a dramatic shift in the way the U.S. federal government acquires technology in favor of the GSA multiple award schedule and major task order contracts," said Kevin Plexico, Input's executive vice president.

"These tools give the government more flexibility than ever in selecting their prime vendor of choice and the trend suggests a strong preference for larger businesses," he said.

During the course of its study, Input found that the number of companies participating in the market has increased at all levels. Those earning less than $10 million in spending on prime contracts has increased from 11,000 in 2003 to 18,000 in 2005.

"While the percent of federal IT spending with small companies has decreased, the number of companies participating has increased by 63 percent. The money spent by the federal government is getting spread over a significantly larger number of companies, which demonstrates that the barriers to entering the market have decreased," Plexico said.

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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