Value of top US govt IT contracts drops for 2007

Contracts value will halve in coming year as budget belts tighten

The value of the top 20 US 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 from Input, a US firm that helps private companies win government contracts.

The top 20 US government IT contracts in fiscal year 2006 totalled US$240 billion (NZ$364 billion).

Contracts with the US 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 says.

A couple of factors have contributed to the lower 2007 numbers — belt-tightening in the US Congress and a number of large multi-year contracts awarded in 2006, says Ashlea Higgs, manager of new markets at Input.

“The IT spending has more of a chance to go through existing contract vehicles,” he says.

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, totalling 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 US government’s IT budget grew by less than

US$1 billion between 2006 and 2007, Input says.

“It’s another sign in the ‘there’s less money out there’ column,” Higgs says. “Budgets are tightening.”

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

Included among the largest IT contracts for fiscal year 2007 are:

• GSA’s Alliant full and open contract, estimated value US$50 billion over ten years. The request for proposals was released in September, and Input expects the contract will be awarded in June. This contract provides for a broad range of IT services in areas including biometrics, business process re-engineering, communications and distance learning. It is available to all US 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 two, estimated value US$30 billion over five years. The estimated request for proposal date, August. Estimated award date is January 2008. The contract focuses on operational planning, training, flight operations, modelling and simulation, and other areas.

• The Alliant small business contract, which has an estimated value of US$15 billion over ten years. Request for proposals was released in September. Estimated award date is 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.

• The US Treasury’s Project Support Solutions contract, which has an estimated value of US$10.8 billion over five years.

• GSA’s contract for historically under-utilised business zone firms, which is estimated at US$2.5 billion over five years.

• The Department of Agriculture’s Multiple Award Information Technology Support Services contract, phase three, estimated $2 billion over five years.

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