September 2, 2003 1:11 PM PDT

Report: Feds have IT money to burn

A recent report suggests that U.S. government agencies still have plenty of money to spend on information technology projects as they approach the end of the federal fiscal year.

In a report issued last week, McLean, Va.-based consulting company FedLeads said agencies still had more than $20 billion to spend on IT as they moved into their final quarter, which ends Sept. 30.

The $20 billion translates to roughly 35 percent of the estimated $58.1 billion given to agencies this year, and amounts to more than 1,000 projects started in the quarter, according to FedLeads.

"There's just a pell-mell rush to get rid of a ton of money before it goes back to the treasury," FedLeads CEO Keith Bickel said.

Federal IT spending was $49.8 billion in the 2002 fiscal year and should rise to $59.3 billion in 2004, according to an estimate from research firm FSI. One reason for the expected hike is growing IT spending by the Department of Homeland Security, according to FSI.

FedLeads based its estimate for fourth-quarter spending on past-year trends, the relatively late dates that federal agencies were awarded their annual appropriations this fiscal year, and sources inside the government, Bickel said.

FedLeads does not have an estimate on how much was spent in July and August.

Based on past experience, about 60 percent of the spending this quarter will go to companies with more than $500 million in annual revenue, FedLeads said. A quarter of the spending will go to companies with annual revenue between $20 million and $500 million, while the remaining 15 percent will go to companies with annual revenue below $20 million, FedLeads said.

FedLeads advises small companies on getting federal contracts and sells directories with contact information for federal procurement officials.


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