Can the fed IT market break $100B? You bet

New Input survey forecasts 5.4 percent annual growth rate

Even if the national economy remains sluggish, federal spending for information technology will continue to accelerate at least through 2015, according to a new report from federal marketing analysis firm Input.

Federal IT spending will grow from $86 billion in 2010 to $112 billion in 2015, for a compound annual growth rate of 5.4 percent, according to Input’s new report “Federal Information Technology Market, 2010–2015.”

“There’s no doubt that the [Obama] administration will continue to push for cost-cutting measures,” said Input Principal Analyst John Slye, one of the co-authors in a statement unveiling the report. “However, the criticality of IT to government operations and priorities, as well as the gap in federal IT expertise, suggests that IT spending will continue with modest growth.”

“Factoring out the drawdown of census- and stimulus-related spending shown in the [fiscal] 2011 IT budget request, we see moderate budget growth,” he said.

According to the report, overall spending growth has decreased, but the administration’s management priorities, coupled with empirical spending trends, "strongly suggest that IT spending has some protection from significant reductions.”

“Historical spending data shows that the government, which typically receives more funding than requested, continues to invest in IT despite its fiscal circumstances,” Slye said.

According to Input, the report supports the notion that federal IT budgets are somewhat insulated from major cuts because government initiatives for cost reduction, increased efficiency, and program oversight and performance all depend on IT.

Input analysts also predict that the government will face difficulty in expanding its workforce to a degree required to significantly reduce its reliance on contractors, especially as agencies strive to fulfill more requirements using fewer resources.

“Agencies will still need to meet the administration’s numerous mandates,” Slye said. “They are just going to be required to be more thoughtful and spend smarter.”

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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