After drop in FY05, federal IT contracts will rise 60 percent in FY06

RESTON, Va., 1 Dec. 2005. The U.S. federal government awarded more than $123 billion in information technology (IT)-related prime contracts in fiscal year 2005 (FY05), a 20 percent decrease compared to last year's awards of $155 billion, according to a report released today by INPUT, an analyst group.

RESTON, Va., 1 Dec. 2005. The U.S. federal government awarded more than $123 billion in information technology (IT)-related prime contracts in fiscal year 2005 (FY05), a 20 percent decrease compared to last year's awards of $155 billion, according to a report released today by INPUT, an analyst group.

Although annual contract awards decreased in FY05, overall federal IT spending increased five percent from FY04. And the numbers will continue to rise -- INPUT expects IT-related prime contract awards in FY06 to spike more than 60 percent.

The Department of Defense is expected to continue spending consistently on IT, but through less 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, less open-market contracts are originating," said 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 Department of the Navy was the hands down leader among all federal departments, awarding more than half of all prime contracts in FY05. Navy's Seaport II Rolling Admissions program accounted for $54 billion of the total $63 billion in awards from Navy. While Navy also led in awards last year, the dollar value of Navy contract awards increased 72 percent compared to FY04.

"The Navy has continued to dominate in awards in the past couple years due to a handful of substantial dollar value programs," said Fedeli. "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 life-cycle support."

DHS did not make the list of the top five awarding federal departments this year and the only non-Defense agencies on the list were the Agency for International Development (USAID) and the DOE.

INPUT is currently tracking over 1,600 IT-related contract opportunities worth more than $200 billion with anticipated award dates during FY06. The complete report, "FY2005: Where did the Money Go?" is available for purchase at www.info.input.com.

Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 1,000 members, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information, see www.input.com.

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