Small group of contractors draws 35 percent of IT dollars

A review of the government's information technology contractors reveals that nine of the top 10 are primarily service-oriented companies and 35 percent of the government's fiscal 2004 technology dollars went to the top 10 contractors.

Of the $50 billion spent by the agencies in fiscal 2004, 73 percent of the money, or $36 billion, went to 150 contractors, according to the Reston, Va., IT consulting firm INPUT.

The list of contractors is based on an analysis of contracts worth more than $25,000 from the Federal Procurement Data System, the General Services Administration's central repository of government purchasing records. It does not include subcontractor payments or spending by the intelligence community, Congress, the judiciary, or quasi-governmental organizations such as the U.S. Postal Service.

The top three contractors - Northrop Grumman Corp., Science Applications International Corp. and Lockheed Martin Corp. - each received $2.5 billion or more in IT contracts, according to INPUT.

• Northrop Grumman: $3,198,547,000
• SAIC: $2,587,875,000
• Lockheed Martin: $2,547,677,000

Two of the top 10 companies are private - Booz Allen Hamilton and SAIC - while Dell Computer Corp., at number eight on the list with $957,066,000, was the only company in the group to receive a majority of its contracts for the sale of products rather than IT services.

Because the size and scale of government IT can be quite broad, a single contract can make a big difference in a companies' revenue, according to INPUT. The firm's analysis showed that 41 percent of top 10 companies' government business came from the companies' top three contracts. For five of the top 10 companies, a GSA Schedule was one of their top three contracts.

INPUT found that Electronic Data Systems' three largest contracts accounted for 83 percent of its business, followed by Dell at 74 percent, IBM at 56 percent and SAIC at 45 percent.

Seventy percent of EDS' government business came from the Navy-Marine Corps Intranet project.