GAO report tracks the rise of IT services

Federal spending on IT services nearly doubled from 1997 through 2001, with the most significant increase coming through General Services Administration contracts, according to a recent report from the General Accounting Office.

And while the vast majority of companies involved in providing services were small and midsize businesses, the lion’s share of money spent went to large companies.

Total spending on services jumped steadily over the five-year period GAO studied, going from $9.1 billion in 1997 to $17.1 billion in 2001, the report said. Services bought through GSA’s Federal Supply Service schedule program increased over the period from $405 million to $4.3 billion.

GAO conducted the study at the request of Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee. Davis had asked GAO to break down the data according to company size, because midsize companies had expressed concern over their share of the pie.

In 2001, the report said:

  • A total of 2,167 small businesses—those with annual revenue of $20 million or less—provided services worth a total of $2.34 billion. There were 635 midsize companies—with revenues of $21 million to $500 million— that sold $3.62 billion in services. And 281 large companies delivered services worth $10.58 billion.


  • Small businesses accounted for 61 percent of the companies and 14 percent of the contract dollars; large businesses 8 percent of the companies and 62 percent of the money, and midsize businesses 18 percent of the companies and 21 percent of the money.


  • GAO said it couldn’t determine the size of 492 companies that had services contracts, but that they accounted for 3 percent of the total contract dollars.

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