IT services fall to large firms

Large businesses get the lion's share of federal information technology services contracts, according to a General Accounting Office study.

Rep. Tom Davis (R-Va.), chairman of the Government Reform Committee asked GAO to provide the information.

In 2001, the last year for which GAO had figures, large businesses took 62 percent of the $17 billion that the government spent on IT services. Small businesses got 14 percent of the total, medium-size firms got 21 percent.

GAO also found that the purchase of IT services through the General Services Administration's schedule system soared from $405 million to $4.3 billion from 1997 through 2001.

Davis plans to soon re-introduce the Services Acquisition Reform Act, which he first proposed in March 2002.

William Woods, GAO's director of acquisition and sourcing management, compiled the information in a letter to Davis sent in mid-February. As it often does, GAO agreed to not distribute the letter until 30 days from its issue date.

Total spending on IT services rose from $9.1 billion to $17.1 billion, an 87 percent increase, during the same period.

GAO used the Small Business Administration's definition — annual revenues up to $21 million — to delineate small companies, then chose $500 million as an arbitrary minimum revenue for large companies. It defined medium-size companies as falling between $21 million and $500 million.

Woods offered no specific recommendations in the letter.


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