IT spending expected to climb during Obama administration

A report released by the Office of Management and Budget on Monday projects a 7 percent increase in information technology spending in fiscal 2010, and that number could go even higher as agencies factor in projects from the recently passed Recovery Act.

According to the IT portion of the budget, spending is budgeted at $75.8 billion for fiscal 2010, an increase of $5.1 billion or 7.2 percent over the previous year. The budget perspective also leaves open the possibility that figure could rise.

"New directions for federal information technology in 2009, as well as final determinations on investments funded in the American Recovery and Reinvestment Act, mean that estimates for spending on IT systems over 2009-2010 will likely change as firm plans are made to address the administration's goals of greater openness in government, wider participation by citizens in government, and a more collaborative, cost-effective federal IT enterprise," the report said.

Ray Bjorklund, senior vice president and chief knowledge officer for McLean, Va.-based consulting firm FedSources, said OMB's calculations don't actually capture the total amount of federal IT spending, which he estimates is more than $100 billion annually.

He called the budget figure an "important benchmark," but emphasized that no one knows precisely how much the government is spending on information technology because it has become ubiquitous and much harder to separate from day-to-day operations.

"We would love to have some hard numbers to work with," Bjorklund said. "But in the bigger scheme of things, IT has become so pervasive as a normal way of doing things in the government that we don't really need a precise number ... it's not like the 1950s where you're investing in a mainframe computer."

He said OMB's projected spending increase is probably high by a few percentage points because it factors in existing projects that hadn't been counted in the IT column before. Obama's reputation as a tech-savvy president led industry to believe IT spending would climb, Bjorklund said, but it has taken the administration some time to get up to speed. He still expects to see a rise during fiscal 2010.

"With somebody tech-savvy in the White House and hiring someone [federal Chief Information Officer Vivek Kundra] with a fresh vision of where to go with technology, I see [IT spending] going up," Bjorklund said. "It's still going to be a great industry segment to play in."

The report identifies three areas likely to see significant increases in funding: cybersecurity, cloud computing and projects aimed at increasing transparency or reducing the cost of IT investments. OMB acknowledges government has a ways to go when it comes to cybersecurity and outlines Homeland Security Department initiatives aimed at securing federal networks.

"As the Federal Information Security management Act of 2002 enters its seventh year, it is clear that agencies and departments are not yet secure," the report said.

The perspective also outlines the importance qualified program managers to oversee major IT investments, something the government has struggled with. In 2009, 88 percent of major IT investments involved a qualified program manager, the report said, a 5 percent increase over the previous year. Bjorklund welcomed the call for additional program management talent.

"[Program managers] are so essential," he said. "There just aren't enough. It's one of those areas in the government that is still lacking."