Spending on outsourcing to increase

American government IT outsourcing spending will reach US$15 billion in fiscal 2007, up 127 per cent from the $6.6 billion spent in fiscal 2002, according to a report released by market research firm Input Inc.

The Chantilly, Va.-based company said federal agencies will be forced to outsource those functions because of administrative pressures to complete non-governmental functions as inexpensively as possible, and because of difficulty in retaining and replacing qualified technical and program management personnel.

“Essentially, we’re just following the trends we’ve seen in government thus far,” said Payton Smith, manager of public-sector market analysis services at Input.

Smith also said that 2001, legislative changes that would have placed tremendous administrative burdens on agencies hoping to pursue outsourcing contracts probably won’t be reintroduced in the new Republican-controlled Congress.

In fact, Input said it expects the new congressional leadership to “foster a generally favourable atmosphere for outsourcing vendors in 2003.”

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