Government rife with opportunities for small IT companies, survey finds
Small businesses stand a good chance of winning large federal information technology contracts, even though the deck may seem stacked against them, a new study from a Reston, Va.-based market research firm concluded.
The study, released Wednesday by INPUT, suggested that small companies specializing in information security, computer system consolidation and development of compatible IT networks, may have an edge in winning large government awards, despite widely used contract bundling practices said to favor bigger vendors.
INPUT analyst Ashlea Higgs came to this conclusion based on a survey of available federal IT contracts valued at $500 million or more. Contracts falling into this category have a combined worth of roughly $85 billion, the report said.
Those projects surveyed displayed a common need for security devices and typically involved integrating a multitude of legacy applications, leaving plenty of room for businesses with niche expertise to compete and win work on larger projects, the INPUT report concluded.
In the security arena, federal agencies will draw on companies that have developed software to detect intrusions and scan IT systems for vulnerabilities. Agency budgets and procurements planned for fiscal 2004 also reflect a desire for products offering safe data transmission and storage, according to the report.
Agencies will also hire niche companies to help them connect their computer systems with others across the government, to facilitate information sharing. For example, the National Science Foundation's "Advanced Cyberinfrastructure Program," a modernization project seeking to help different scientific research communities interact more frequently and pool resources, will likely require software to enable all users to access shared data. This is a place where small companies could contribute, INPUT said. The NSF contract has an estimated value of $5.1 billion and will be awarded by mid- to-late fiscal 2004.
The Homeland Security Department, and other large federal agencies, will also be looking to combine hundreds to thousands of legacy applications into single computer networks. Small companies can offer technology to help agencies integrate the legacy systems rapidly, the INPUT report said.
Homeland Security is developing a Security Planning and Integrated Resources for Information Technology (SPIRIT) system that will provide such opportunities for small businesses. As part of this project, the department will award contracts in four sub-areas: information management, information systems engineering and design, information systems operations and information systems security. Together, the contracts for this project are worth about $10 billion.
Departing OMB technology chief Mark Forman, has emphasized similar opportunities for IT contractors at past industry conferences. At a February event, he told Silicon Valley tech gurus that the government is looking to secure all existing computer networks against hackers before tackling new projects.
James Kane, president and chief executive officer of Federal Sources Inc., a market research firm in McLean, Va., said at the same conference that 8 percent of $59 billion in projected federal IT expenditures in fiscal 2004 will go toward security, up about 3 percent from this year.
COMMENTS
- As more contracts are competed without bundling, and as multiple small businesses successfully compete, a robust government integration capability becomes more important. Anonymous Posted August 19, 2003 7:26 PM
- Federal contracting is a joke as seen by the recent GSA problems. In DoD the boys contract with their ex-service retirees whenever possible. Likewise, large contracts are let for a serious of small works that are bunched into a single large contract. The only hope for a small IT firm is to become a sub to the winner of the bid (primary contractor). Government people do not want the hassel of developing a bid process for several small jobs when they can do the entire mess in a single large bid. Not only does the work apply across several small jobs but across several time periods as well. We might bid out a five year deal when it could easily be five single jobs bid each year. Now you get several small jobs bunched into a single contract and then combine several years of work into a single bid so there is one large contract preferable to retired freinds. Tax payer Posted August 15, 2003 6:54 AM
