Testing the Wind

Agencies are preparing some big technology deals for 2007, and the Army is leading the charge.

Don't count on Democratic control of Congress to radically alter 2007 procurements. Federal information technology leaders caution that IT procurements slated for 2007 went through the planning stages years ago, and one budget cycle under a different political party won't significantly change the scenario. And the big picture still includes projections that technology spending will drop in the coming years, bringing with it the federal IT industry's rate of growth.

Many 2007 procurements will be issued by the Army-though most aren't for new requirements, notes Kevin Carroll, head of the Army's Program Executive Office Enterprise Information Systems. Most are successor contracts to current ones being completed faster than anticipated, he says. Why? "There's more money because of the war-more immediate money to solve soldiers' problems, even in the IT world," he says.

But even if the United States starts withdrawing from Iraq, don't immediately expect big changes in Army spending, says Ray Bjorklund, senior vice president of Federal Sources Inc., a market analysis firm in McLean, Va. "You don't just walk out of a military operation, it just doesn't happen overnight," he says. The military's IT needs won't suddenly disappear. Anticipated IT spending slowdowns will occur on the expected timetable, he emphasizes. Federal Sources predicts a compound rate of growth for IT spending (not counting new supplementals) of only 1.6 percent through fiscal 2008.

Carroll adds another reason for the relative Army upsurge: "the pressure to not go out to a [General Services Administration] and other government agencies, to use our own [contracts]." It's not that GSA is without benefits, it's just that hurdles recently have been raised at the Pentagon. "We'd like to use them more and more, so long as the business case supports it," he adds.

GSA continues to battle a customer-relations problem, made worse by limitations on holding funds from one fiscal year to another that were reimposed on the agency. Administrator Lurita Doan's quest to take over other agencies' governmentwide contracts is creating a backlash, too. She has made known her desire to take over NASA's popular SEWP (formerly known as Science and Engineering Workforce Project) contract, for example.

Jim Williams, commissioner of GSA's Federal Acquisition Service, says the agency isn't trying to re-establish a monopoly over all procurement. On the other hand, GSA should be the sole supplier of some kinds of services, including networks and charge card assistance, he contends. The prospect that dissatisfied agencies would go out on their own would be enough to keep GSA responsive. "Competition is not important-it's the threat of competition," he says.

Meanwhile, Rep. Henry Waxman, D-Calif., is expected to become chairman of the Government Reform Committee. Vendors especially are mourning the diminution in power of one of Capitol Hill's canniest IT players, Rep. Tom Davis, R-Va., the outgoing chairman. While it is almost certain that Waxman will hold procurement hearings, "it's hard to predict whether he'll delve into management level issues, which is where the IT is," says Stan Soloway, president of the Professional Services Council.

-Daniel Pulliam contributed to this story
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