Political climate could make agencies wary of undertaking new IT projects, Input says

Proposed new administrative rules and reporting requirements for federal contracting would dampen information technology sales, according to market research firm Input. Company analysts say those accountability measures could slow an already slow-growing federal IT market.

Federal IT spending will maintain its modest growth rate for the next two years because the political climate will make agencies wary of beginning major new projects, according to Input’s new market report. President Bush’s fiscal 2008 budget proposal would increase civilian agency IT spending to $65.5 billion, a 2.6 percent increase compared with budgeted spending for fiscal 2007.

Kevin Plexico, executive vice president of operations at Input, said the new Democratic-led Congress is sparring with Bush over the budget and the 2007 continuing resolution, which is discouraging large agency investments and hindering robust market growth.

However, the federal IT market is stable, despite sputtering growth, according to Input. The firm expects a 5 percent increase in federal IT spending through 2012, when it will reach about $80 billion.

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