Small Firms Land More Federal IT Contracts

Small businesses are landing a bigger share of federal information-technology spending this year, according to a recent report.

While the overall value of prime contracts for IT-related services awarded over the past three months has flattened out at $11 billion, compared to the same period last year, the value of set-aside contracts — which are typically awarded to smaller firms — has grown by 17 percent, according to INPUT, a Reston, Va.-based firm that tracks government IT spending.

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A full 63 of 86 set-aside contracts worth nearly $1 billion in total went to small businesses during the second quarter, including a single $305 million five-year contract awarded by NASA, the report said.

Just last week, NASA awarded another $14 million contract to Lanham, Md.-based IT firm Sigma Space Partners, a Small Business Administration certified 8(a) small disadvantaged business with 90 employees and an annual revenue of $8.5 million. The five-year contract includes scientific programming and analysis, computer facility support, and program management, among other responsibilities.

Apart from NASA, total IT spending this year is being driven by the Energy Department and the Air Force, which together have awarded more than $5 billion in contracts, according to INPUT.
More than half of the contracts awarded in the second quarter went toward professional services, maintenance, or support, said Marcus Fedeli, manager of INPUT's federal opportunity products division.

"Older hardware and software has to be maintained, which is extremely costly, but agencies are continuing to look at new options in replacing these legacy systems," Fedeli said in a statement.
Fedeli said he expects set-aside contracts to hit the $4 billion mark within the next few months.
Outside of defense and security spending, overall federal spending on IT is expected to increase by just one half of one percent in 2007 as the government tries to cut internal costs, INPUT reported in March.

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