Government IT Contracts Will Increase over the Next Five Years

Looking for IT contract work? Look no further than the federal government. The market for its IT contractors is set to increase substantially from $86 billion in 2010 to $112 billion in 2015, according to the Federal Information Technology Market 2010-2015 from government research company INPUT.

The 5.4 percent compound annual growth rate is primarily driven by the government’s need for technology contract work to help reduce costs and waste from existing systems. While the federal government says it wants to insource talent and hire full-time workers, pressing needs and recent examples where insourcing hasn’t saved money will continue to drive the demand for contractors.

Federal IT budgets are somewhat insulated from budget cuts because of initiatives for cost reduction, increased efficiency and program oversight, which all depend on IT. The Obama administration’s priorities of leveraging shared services, automating processes to improve delivery of citizen services, cybersecurity and investing in technology infrastructure all require IT efforts.  

"There’s no doubt that the administration will continue to push for cost-cutting measures," Input Principal Analyst John Slye says. "However, the criticality of IT to government operations and priorities, as well as the gap in federal IT expertise, suggests that IT spending will continue with modest growth."

President Obama’s focus of cybersecurity as a national priority, along with legislation aimed at expanding the role of the Department of Homeland Security in cyberwarfare, is already fueling a demand for security contractors. Plus, the government’s adoption of Web 2.0 technologies like cloud computing and social media has created a huge demand for encryption and firewall systems to shield networks from intruders. Because of this, contracts in cybersecurity are projected to increase from $7.9 billion in 2009 to $11.7 billion in 2014.

— Chandler Harris