Civilian IT outlook strong

The Sept. 11 terrorist attacks have put an unprecedented focus on the federal information technology market and created a shift in priorities now and in the years ahead, according to the Government Electronics and Information Technology Association.

The total federal IT budget for fiscal 2002 is expected to be $49 billion, a 15 percent increase over the previous year, and it should be $65 billion by fiscal 2007, said Mary Freeman, market research manager for Verizon Federal and GEIA's budget forecast chairwoman.

The civilian agencies' fiscal 2002 budget is $24.2 billion and will grow 5.9 percent during the forecast period.

Freeman said that because of the Sept. 11 attacks, "there are new requirements for redundancy; security, security, security; and telecommunications with multiple paths."

Overall, the attacks that targeted New York City and Washington, D.C., have resulted in a string of demands to fund:

* Homeland defense.

* Financial recovery for the economy and the airlines.

* Physical recovery at the Pentagon and in New York City.

* Military action in the Middle East.

* Critical infrastructure protection.

The departments of Transportation, Treasury, Justice and State and the Federal Emergency Management Agency are expected to have an "overwhelming need" for increased funding to meet those demands, she said.

"It could cost more than $100 billion," Freeman said. "We don't know what funds are going to be needed to recover from the tragedy."

Funding for counterterrorism initiatives, including critical infrastructure protection, is expected to surge past the $13 billion allocated for fiscal 2002, with several agencies, including the departments of Defense, Health and Human Services, State and Justice having large counterterrorism requirements.

"IT is at the core of the new national agenda," said Mary Ann Wangemann, chairwoman of GEIA's federal IT forecast and a fellow/director of government strategy at Electronic Data Systems Corp. She said that IT is now, more than ever, a "weapon of war."

Jeanmarie Klitzner, director of business development at Computer Sciences Corp. and GEIA's civil forecast chairwoman, said the Sept. 11 attacks will increase the focus on crossagency cooperation and the creation of a "seamless government."

To make that happen, Klitzner said there will be:

* An initial shift from mission support to counterterrorism initiatives.

* A shift of agency functions as the Office of Homeland Security begins operations.

* An increase in IT requirements for security, redundancy and biometrics.

* An increase in physical security initiatives.

* Heightened visibility on critical infrastructure protection programs.

"When they start moving, industry has to be ready because when the government moves, they're going to be moving quickly," Klitzner said, adding that at least one agency manager had already asked department heads to be prepared to cut budgets by 10 percent in anticipation of having to reallocate funds.

Despite the GEIA forecast's rosy outlook for federal IT spending during the next several years, no one really knows what that future will look like, Verizon's Freeman said.

"At this point, exactly four weeks since the tragedy, I feel like I'm in the first act of a play with budgets and spending going forward," she said.

To compile its forecast, GEIA conducted more than 275 confidential interviews with government officials at 65 agencies and also sought Wall Street and congressional perspectives and internal industry research.