Defense IT budget could grow 4.9 percent

CHAPEL HILL, N.C., 8 February 2005. The FY2006 President's Budget demonstrates a continued commitment to information technology and network-centric warfare, a study says.

Feb 8th, 2005

CHAPEL HILL, N.C., 8 February 2005. The FY2006 President's Budget demonstrates a continued commitment to information technology and network-centric warfare, a study says.

The new budget request, released yesterday, includes a 4.9 percent increase over the 2005 budget for Department of Defense information technology programs. Overall, the IT budget for the entire federal budget increased 7.1 percent.

Clear Point Group analyzed the recently released budget and noted several significant insights:

-- The DOD spending for FY2006 is budgeted at $30.1 billion. This represents no change over the projected amount for 2006 released in the FY2005 budget.

-- The Department of Defense represents 46 percent of the total federal IT budget of $65.2 billion. The Department of Homeland Security, with an IT budget request of $6 billion, represents only 9.1 percent of the total federal IT budget.

-- The OMB did not release detailed program spending on DoD IT programs, stating that detail for the Department of Defense will be provided in an update published in April 2005.

-- Over the past four budgets, DOD IT spending has grown an average of 3.3 percent.

This latest budget represents the largest growth in IT spending seen over the past four years. While the single-digit growth in the new budget supports the widely-held view that the budget deficit is being squeezed, program managers are increasingly turning to information technology to solve warfare, security, and cost management challenges.

"The release of the new budget gives vendors an opportunity to understand the Defense Department's emerging priorities with respect to information technology," said Keith Symmers, CEO for Clear Point Group. "Understanding such priorities and following the money allows for the best investment of research, development, marketing, and sales efforts when penetrating the government market."

Clear Point Group helps clients understand the subtleties of the federal budget and the market opportunities therein. Examples include estimating the market size and growth opportunities for specific technologies and devices across the thousands of IT programs within the DOD and the federal government as a whole.

The consultants of Clear Point Group combine in-depth government and industry knowledge with years of consulting experience to bring the best possible solutions to clients. Clear Point Group is dedicated to helping clients find solutions to their most pressing strategic and operational business challenges -- allowing companies to take information and move from insight to action.

Symmers has led dozens of strategic and operational initiatives in the defense, healthcare, high tech, utility, and manufacturing industries. He is a retired Naval officer and founder of Clear Point Group, based in Chapel Hill, NC. For more information, see www.clearpointstrategies.com.

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