Transformation drives DOD IT budget

The Defense Department's information technology budget will increase steadily, driven largely by Defense Secretary Donald Rumsfeld's vision of transformation.

DOD's fiscal 2003 IT budget, at $26.6 billion, should increase 5 percent each year for the next five years, according to the annual forecast by the Government Electronics and Information Technology Association (GEIA).

DOD's transformation activities affect "every nook and cranny of the services" and are the main drivers of IT budget dollars, said Mike Kush, chairman of GEIA's defense forecast team and director of public-sector marketing for Identix Inc. Although the IT budget is expected to increase, it will remain about 6 percent of the total DOD budget.

Rumsfeld has made transformation a top priority as he seeks to improve DOD's efficiency. Most of the department's transformation initiatives rely on IT.

GEIA analysts also estimate that civilian agencies' IT budgets will increase at a 4.6 percent annual rate during the next five years. However, significant amounts of money will be shifted within the agencies that could become part of the proposed Homeland Security Department.

Many civilian agencies are seen as the "bill payers" for homeland security requirements. As a result, those agencies have budgets that will barely keep pace with inflation, warned Mary Freeman, chairwoman of GEIA's budget forecast team and director of business development for Verizon.

In addition, civilian agencies' projects are facing tougher scrutiny from the Office of Management and Budget as well as pressure to reduce redundancies and build a business case for funding IT efforts, she said.

Industry leaders have ample opportunities to work with the government, but the real challenge is finding "opportunities out there among the noise," said Angela Firkins, chairwoman of GEIA's civilian agency forecast team and director of business development for Affiliated Computer Services Inc., a provider of business process and IT services based in Dallas.

Speaking Oct. 30 at the association's annual 2002 Vision Conference in Tysons Corner, Va., Kush said GEIA conducted more than 80 interviews with defense, civilian and Capitol Hill staffers to analyze the budget numbers, identify trends and suggest the best ways for industry to help.

Alan Blandamer, manager of business development at AT&T, said the intelligence community's overall IT budget is estimated at about $30 billion, which includes the CIA's budget of from $3 billion to $5 billion, and the National Imagery and Mapping Agency's, at about $1 billion. The National Security Agency also will see a major increase, he said.

Judi Hasson contributed to this report.