Preview: Opportunities for DoD IT contracts

Thursday - 11/4/2010, 10:08am EDT

Deniece Peterson, Manager, Federal Industry Analysis, INPUT

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By Jolie Lee
Federal News Radio

The Defense Department is headlong into a multi-year effort to cut costs. But will that also extend to information technology spending?

For the answer to that question, hundreds of IT vendor executives heard the latest forecast at the Input Fed Focus conference on Thursday.

Deniece Peterson, manager of Federal Industry Analysis at Input, told Federal News Radio's Tom Temin that she predicts IT spending to continue to grow at DoD -- just not as much as it has in the past.

"IT is so critical to mission goals, but it won't be the growth we'd seen a decade ago in the 11-12 percent range," Peterson said.

Over the next five years, DoD's IT spending is expected to grow by 4.5 percent and Intelligence to grow by 6 percent, Peterson said.

IT spending within the armed services will be "fairly flat," she said. Peterson said slow IT growth is partly attributed to higher priority procurements the military must make in aircrafts, ground vehicles and warships.

However, Peterson suggested contractors find "bright spots" in agency-wide projects, such as the health program.

Peterson predicted more IT spending will also be put into the Defense Information Systems Agency (DISA), which will take on more work as part of DoD's cost-cutting efforts.

The data center consolidation efforts are another bright spot. DoD has the most data centers in the government with 722 centers.

Peterson's advice to businesses: Pick your battles. Contractors should focus on core IT functions, such as infrastructure and information security.

For newcomers, she recommended partnering with an organization that already has footing within DoD.

Working with DoD is still "a good place to be, if you choose carefully and be aware and cognizant of where you're dedicating your resources," Peterson said.

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