IT spending remains flat

Total federal spending on information technology systems and services will hit $24.8 billion in fiscal 1998 up slightly from $24.7 billion in the current fiscal year according to Bruce McConnell director of the information policy branch of the Office of Management and Budget.

McConnell said that while IT spending remains "static " showing little year-to-year growth "we're holding our own [compared with] the rest of the budget " which was cut by the president and Congress during the last four years.

Bob Dornan senior vice president of Federal Sources Inc. McLean Va. said that in an era when agencies have seen their overall spending slashed by 10 to 20 percent "remaining flat is a monumental victory. It means that IT continues to account for a growing percentage of overall agency budgets."

Defense IT Budget Edges Up

McConnell said the 1998 Defense Department budget edged up slightly to $10.2 billion from approximately $9.5 billion in fiscal 1997 with OMB unable to "capture the spending on embedded systems." He put spending by Defense agencies at $3.4 billion and pegged the Air Force's 1998 IT budget at $2.3 billion. The Navy asked for $2.2 billion with the Army's 1998 spending coming in slightly above $2 billion he said.The Electronic Industries Association in its five-year forecast of DOD IT spending generally agreed with McConnell's estimates of "slow" growth in Pentagon IT budgets. Michael Kush director of marketing analysis for Electronic Data Systems Corp. and chairman of the EIA Defense team projected only incremental increases in IT spending from 1998 through 2002.

Though modest these increases still run counter to the downward slope of the overall federal budget. Based on wide-ranging interviews the EIA conducted with DOD officials Kush said top Pentagon management views IT as the "best way to modernize [and] to achieve the biggest bang for the buck."

The Department of Health and Human Services led civilian agencies in the IT sweepstakes with its 1998 computer communications and services spending set at $2.3 billion.

The Transportation Department came in with the second-highest 1998 IT budget among civilian agencies at $18 billion.


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