RESTON, Va. - The U.S. government awarded more than $123 billion in information technology (IT)-related prime contracts in fiscal year 2005, a 20 percent decrease from 2004 awards of $155 billion, according to a report from INPUT, an analyst group in Reston, Va.
Although annual contract awards decreased in 2005, overall federal IT spending increased 5 percent over2004. And the numbers will continue to rise-INPUT expects IT-related prime contract awards in 2006 to spike more than 60 percent.
The U.S. Department of Defense is expected to continue spending consistently on IT, but through fewer open-market contracts. Civilian agencies such as the Department of Homeland Security (DHS), General Services Administration (GSA), and the Department of Energy (DOE) are expected to award several major open-market contracts, contributing heavily to the spike in total contract awards next year.
“With more departments utilizing existing contract vehicles including multiple new department-wide indefinite delivery, indefinite quantity contracts, fewer open-market contracts are originating,” says Marcus Fedeli, manager of federal technology opportunities at INPUT. “This trend will continue next year; however, we will see contract awards rise significantly due to several anticipated billion dollar-plus program awards.”
The U.S. Navy was the leader among all federal departments, awarding more than half of all prime contracts in 2005. The Navy’s Seaport II Rolling Admissions program accounted for $54 billion of the total $63 billion in Navy awards. The dollar value of Navy contract awards increased 72 percent compared to 2004.
“The Navy has continued to dominate in awards in the past couple years due to a handful of substantial dollar value programs,” Fedeli says. “The large dollar value awards we’re seeing within Seaport II are being driven by the highly technical services being procured, which include support of all phases of weapon systems acquisition and lifecycle support.”
INPUT is tracking more than 1,600 IT-related contract opportunities worth more than $200 billion with award dates during 2006. The report, FY2005: Where did the Money Go?, can be purchased at www.info.input.com.
