Federal IT Spending to Reach $102 Billion by 2012

Information technology (IT) spending by the U.S. federal government will grow 5 percent annually, from $79 billion in 2007 to $102 billion by 2012, according to initial findings from the five-year Federal IT Market Forecast released by INPUT, a provider of government market intelligence.

Growth will be slow in 2007 and 2008 due to appropriations delays and discord between the priorities of the new Democratic-controlled Congress and the Bush Administration, but will resume to a more historical norm in 2009.

“In the short term, the Global War on Terror, heightened Congressional scrutiny, and the continued concerns held by the Office of Management and Budget (OMB) about the performance of major IT initiatives will produce three to four percent, far below the six percent average we’ve seen over the past 15 years,” says Kevin Plexico, Executive Vice President for INPUT. “However, the fundamentals are still in place for long-term growth: flat federal employment levels coupled with continued expansion and scope of government programs which brings about investment in IT to drive productivity and effectiveness in those programs.”

In efforts to achieve long-term efficiencies, federal agencies will focus spending on system consolidation and modernization initiatives to reduce IT infrastructure management costs and free up money for mission- oriented applications.