Federal IT spending to stay flat for next two years

by Editor 10/24/2008 11:50:00 AM
IT consulting jobs
Government spending on information technology will remain flat in fiscal 2009 and 2010, in the aftermath of the financial crisis, the bailout package that Congress has passed to rescue banks, and a record deficit, according to industry analysts.

It will take no less than two fiscal years for the new administration to develop a new strategy. “2009 is a planning year,” says Payton Smith, a strategic business associate at Booz Allen Hamilton. “Once we get a new administration, IT won’t be the first thing they think about… It will be at least two years out. We don’t see a lot happening until 2011.”

Cybersecurity will remain the top priority when creating the budget plans, says Smith. “Cybersecurity and information assurance are obviously not going away. They are the mainstays of every program and the costs should be built in to program budgets.”

Smith was one of the representatives from federal contractors who shared their assessment of the outlook for federal IT spending at the Government Electronics and Information Technology Association’s Vision conference in Washington on Thursday.

Regardless of who becomes president, analysts agree that it will take months for the new administration to determine its priorities and develop a plan for IT investments.

“Fiscal year 2009 is really sort of a period of hold. Our takeaway thought is that this year is a great time to think about the years ahead, though we will see some growth in civilian IT spending,” says Meredith Luttner Groff, an associate in the strategic business intelligence group at Booz Allen Hamilton.

IT spending in civilian agencies will increase 4.1 percent each year between fiscal 2009 and 2014, predicts the association, with growth concentrated at several agencies, such as the Health and Human Services, Homeland Security, Veterans Affairs and Treasury departments.

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