Value of top US gov't IT contracts drops for '07

The total estimated value of the US government's top 20 IT contracts in fiscal year 2007 is $118 billion, an analyst says.

The value of the top 20 U.S. government IT contracts in fiscal year 2007 will be US$118 billion, less than half the value of the top 20 government IT contracts in 2006, according to a report released Tuesday.

The top 20 U.S. government IT contracts in fiscal year 2006 totaled US$240 billion, according to Input, a firm that assists private companies win government contracts.

Contracts with the U.S. Army, General Services Administration (GSA), and Department of Homeland Security (DHS) account for half of the procurements in the top 20 list for 2007, Input said.

A couple of factors have contributed to the lower 2007 numbers -- belt-tightening in the U.S. Congress and a number of large multiyear contracts awarded in 2006, said Ashlea Higgs, manager of new markets at Input. "The IT spending has more of a chance to go through existing contract vehicles," he said.

Among the contracts awarded in fiscal year 2006 were a US$45 billion contract for a variety of IT services at the Department of Homeland Security, and a US$42 billion contract at the Department of Energy. Two GSA contracts from Input's 2006 list, totaling an estimated US$65 billion, were held over and are back on the 2007 list.

Congress has also focused on reducing the government's US$339 billion budget deficit this year. The U.S. government's IT budget grew by less than US$1 billion between 2006 and 2007, Input said.

"It's another sign in the 'there's less money out there' column," Higgs said. "Budgets are tightening."

While IT vendors may be disappointed with the total value of the 2007 contracts, each contract has "still has enough revenue potential to attract hundreds of vendors," he said.

Among the largest IT contracts for fiscal year 2007, which started Sunday:

-- GSA's Alliant full and open contract, estimated value US$50 billion over 10 years. The request for proposals was released in September, and Input predicts the contract will be awarded in June. This contract provides a broad range of IT services in areas including biometrics, business process re-engineering, communications and distance learning. It is available to all government agencies. This contract was held over from 2006.

-- The Army's Services for Operations, Planning, Training, and Resource Support Services for Warfighter Operations, phase 2, estimated value US$30 billion over five years. Estimated request for proposal date, August. Estimated award date, January 2008. The contract focuses on operational planning, training, flight operations, modeling and simulation, and other areas.

-- Alliant small business contract, estimated value US$15 billion over 10 years. Request for proposals was released in September, estimated award date in June. This contract is similar to the full and open contract, but the scope is narrowed to two areas, information systems engineering and systems operation and maintenance.

-- U.S. Department of Treasury's Project Support Solutions contract, estimated value US$10.8 billion over five years.

-- GSA's contract for historically underutilized business zone firms, estimated US$2.5 billion over five years.

-- The Department of Agriculture's Multiple Award Information Technology Support Services contract, phase 3, estimated US$2 billion over five years.

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