Agencies likely to spend millions on technology to recover from attacks

The federal government will spend at least $75 million on information technology goods and services to replace systems damaged by Sept. 11's terrorist attacks, according to a new report from market research firm INPUT Inc.

"That's a conservative estimate," said Payton Smith, INPUT's manager for e-government services and the author of the report, "Attack on America: The Impact of the September 11 Terrorist Attacks of the Federal Government."

"The true figure will depend on the amount of services required to get the new equipment in place and operational," Smith said. Agencies located at the Pentagon and in damaged and destroyed buildings in or near the World Trade Center complex in New York might have to spend as much as $150 million to resume normal operations.

The report said that the effort to recover from the attacks "includes replacing the entire IT infrastructure-workstations, servers, telecommunications, printers, scanners and other equipment-supporting nearly 4,000 federal employees."

The Defense Department faces the biggest challenge. INPUT estimated that 10 percent of the Pentagon's office space was destroyed by the crash of American Airlines Flight 77. The attack displaced between 2,200 and 2,300 employees, Smith said. Defense will have to spend nearly $45 million to replace the IT systems used by those employees.

Agencies in New York affected by the attacks include the Customs Service, the Bureau of Alcohol, Tobacco and Firearms, the Equal Employment Opportunity Commission, the Internal Revenue Service, the Secret Service and the Securities and Exchange Commission. Each faces millions of dollars in replacement costs. The Customs Service alone could spend more than $15 million on new information systems.

INPUT predicted that the majority of new IT purchases for all the agencies will be made under existing contracts and General Services Administration schedules.

The attacks show that the government must fix computer security problems and increase its capacity for disaster recovery, the report argued. Agencies can't simply purchase replacements for all that was lost. "Data stored in workstations and servers destroyed in the attacks are gone," the report said. "Only data that was stored in off-site locations will be recoverable." The Secret Service and the Defense Finance and Accounting Service both benefited from off-site storage locations, the report noted.