Analyst: 2006 budget constraints could affect IT

The federal government wants more for its money this year and will be scrutinizing investments for their value to agencies’ core missions, according to a public-sector analyst's predictions for 2006.

Teresa Bozzelli, chief operating officer and managing director of Government Insights, said the government will face greater budget constraints this year, which could result in a reduction in information technology spending.

That spending totals about $138 billion annually, and Bozzelli said this year’s IT budget is likely to decline by as much as $180 million. She added that the cuts could stretch into 2007.

She predicts that core mission demands will drive IT spending. “Scrutiny is often and largely based on the value of your program," she said.

Government officials and vendors will be held accountable for returns on investments. Programs must show value in the first 15 to 18 months or risk cancellation, Bozzelli said.

The government also intends to become more efficient and root out redundancies. It will make collaboration among departments and with the private sector a top priority. Moreover, Bozzelli said government buyers should consider integrating the needs of federal, state and local agencies. Given the failures in the response to Hurricane Katrina, the government will seek integrated services that can be delivered when needed.

“This is an opportunity for the private sector to lead the government,” Bozzelli said.

Also in 2006, IT services will become more geographically based, and that base is moving with the population to the South and Southwest regions of the country, she said. That shift is occurring because more people are moving to those areas and the services are following them, Bozzelli said.