Washington Cranks Up Contracts

Washington is splashing its cash on some major IT projects -- security vendors could be in for a big payday

August 25, 2005

2 Min Read
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Vendors, particularly in security, could be in line for a bumper payday as the U.S Government flashes its cash in massive IT contracts, according to analyst firm Input (see Federal Awards Increased).

Contract awards totaling a colossal $67 billion were made during the third quarter of this year, an increase of 190 percent on the same period last year, says Input. Although contract awards in the next quarter will not reach these heady heights, Input says that $34 billion worth of contracts are due to be awarded in Q4, which is still 70 percent up on the year-ago quarter.

This could be good news for vendors in cyber security and information security, says Megan Gamse, a manager at Input and the author of the research. Given obvious recent events, as a nation we see a need to further protect ourselves as a whole, as well as our information infrastructure.”

Gamse says that if past quarters are anything to go by, then the big spenders will be the likes of the Department of Defense and the Department of Homeland Security.

Recent events in Washington appear to bear this out. After months of pressure from industry, the government recently agreed to appoint a cyber-security tsar who will be responsible for leading the country’s response to cyber threats. This will raise the profile of security on Capitol Hill and force departments to think seriously about how they share (and secure) information (see Search for the Czar and Where's the Cyber-Security Quarterback?).The development means that vendors will need to work across a number of different government agencies or departments, says Gamse. “What we’re starting to see is a lot more intra and cross-departmental contracts,” she adds.

But it was just one part of the U.S government, the Navy, which accounted for most of Q3’s contract activity, with $57 billion in awards. Some $54 billion of this went to the Navy’s SeaPort Enhanced Rolling Admissions initiative, a preferred list of more than 500 vendors that the Navy will use for future technology projects.

Gamse told NDCF that the initiative “runs the whole scale of IT.” As well as security, servers, and storage, Gamse says that the Navy is also focused on systems engineering, simulation and modeling technologies.

Input’s research also revealed that federal agencies awarded nearly $18 billion in set-aside competitions during the third quarter, a massive leap from the previous quarter, when just $826 million was awarded. Set-asides are contracts that can only be awarded to organizations that satisfy certain criteria, such as firms owned by service-disabled veterans.

Although Gamse expects the total value of set-aside contracts to drop to $11 billion during the fourth quarter, this is still a much larger amount than prior quarters, she adds.— James Rogers, Site Editor, Next-Gen Data Center Forum

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