IT Spending Slows

THE DAILY FED

IT Spending Slows

Federal government spending on information technology in fiscal 1998 will be about the same that it will be for fiscal 1997, the Bureau of National Affairs, a Washington newsletter firm, reported today.

IT expenditures peaked in fiscal 1996 at $26.2 billion, but are slated to fall to $24.7 billion this year, Office of Management and Budget numbers show. The budget projection for fiscal 1998 IT outlays of $24.8 billion shows a slight rise. But expressed in constant 1992 dollars, the 1998 amount is $400 million below 1997.

The Defense Department accounts for about 42 percent ($10.3 billion) of IT spending projections in fiscal 1998. The Department of Health and Human Services tops civilian agencies with $2.3 billion in IT spending.

One executive told the bureau the IT stagnation is sobering for contractors.

"It shows that no sector is immune from budget realities; the salad days are over," the executive said.