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Federal IT Spending To Rebound In 2009

Flat federal employment levels coupled with continued expansion and scope of government programs should boost spending, analysts with Input said.
The U.S. government is likely to increase spending on information technology by an average of 5% annually over the next five years, according to market research released this week.

Input, a government spending analyst group, forecasts federal IT spending will rise from $79 billion this year to $102 billion by 2012. Analysts expect slow growth in spending this year and next because of struggles between Congress and President George W. Bush and subsequent budget delays. That should change in 2009, when they expect growth to return to historical growth rates.

Kevin Plexico, executive VP at Input, said the global war on terror, heightened Congressional scrutiny, and concerns about the effectiveness of IT initiatives will slow growth, from 6% in the previous 15 years, to 3% or 4% before it rises again in 2009.

"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," Plexico said.

Federal employment stagnation and the need for information-sharing impact federal IT spending, and agencies are likely to spend on system consolidation and modernization to cut IT management costs, according to Input's five-year Federal IT Market Forecast, released at the fifth annual MarketView Conference this week. Agencies are likely to use the savings toward mission-oriented applications, according to the report

The figures are a bit more optimistic than those put out by the federal government last month.