Report Predicts Fourth-Quarter Federal IT Spending Spree

Aug 27, 2007 12:00 AM, By Josh Cable

According to a report by Reston, Va.-based INPUT, federal spending on information technology (IT) in the final months of the government's fiscal year 2007 should reach more than $20 billion – over 33 percent of the federal government's total IT spend for the year.

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The report suggests that IT spending over the last 10 years has been steadily shifting from other fiscal quarters to the fourth quarter.

“Over the last decade we have seen a consistent move toward agencies spending 30 percent or more of their annual IT budgets in the final quarter of the fiscal year,” explained John Slye, manager, federal industry analysis, for INPUT. “The spending among the 10 agencies with the largest IT budgets alone could translate into roughly $17 billion.”

INPUT noted that the federal government's fiscal year – which ends Sept. 30 – often is marked by vendors receiving a flurry of orders as agencies use up remaining funds. According to the report, this trend appears to be fueled in part by the nature of the appropriations process.

“Agencies are instilled with a use-it-or-lose-it mentality that drives them to spend their remaining budgets before the end of the year,” Slye said, referring to the common belief that agencies not spending their full budgets receive less funding in the future. “We've also seen an impact from the recent history of delayed appropriations bills forcing agencies to spend their budgets in a narrower window of time.”

The report suggests that the increased purchasing activity in the fourth quarter favors vendors who already have built relationships and established their value.

“Federal agencies tend to look to their established vendors when they have money to spend in a hurry,” Slye asserted.

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