Value of New IT Contracts Falls 20%

By Renae Merle
Washington Post Staff Writer
Wednesday, November 30, 2005

Federal agencies handed out information technology contracts worth $123 billion this year, 20 percent less than in 2004, according to a report to be released today by Input Inc., a Reston market research firm.

But the hawkers of the government's computer software and technology systems shouldn't panic. The value of new contracts fell because agencies used more existing agreements rather than holding competitions, said Megan Gamse, Input's manager of defense opportunities. Information technology spending overall increased 5 percent this year.

The report reflects a trend among agencies opting for wide-ranging contracts that allow them to hold one competition, select numerous winners and then parcel out work over several years. That approach is easier for contracting officials, who can then choose among the pre-qualified companies for the work without holding a new competition, which can take months, industry officials say.

For example, in May, the Navy selected more than 500 companies for its $54.7 billion information technology program, which includes providing "qualified personnel, materials, facilities, equipment, test instrumentation, data collection and analysis hardware and software and services," the report said. It was among the largest information technology contracts last year, Input said.

Input forecasts that the value of contracts awarded next year will increase 60 percent as agencies decide several high-dollar competitions. The Department of Homeland Security, for example, is expected to announce winners for its EAGLE program, which is worth about $45 billion. The contractors picked for that program could provide a range of services -- including software development and information technology support, Gamse said.

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