Cloud

Most federal IT funding expected to escape super committee's knife

Agency technology spending should be able to withstand the outcome of any super committee deal as well as steeper cuts if deficit reduction negotiations collapse, information technology industry groups say.

While feds worry their pay and benefits may take a hit, IT contractors expect lawmakers to preserve substantial funding for replacing decades-old hardware and software and securing networks.

"We are one of the leading sectors. We have been throughout the recession," said Trey Hodgkins, senior vice president for national security federal procurement policy at interest group TechAmerica. "The need for technology, whether it's refreshments or cybersecurity, those needs don't go away, and in some ways they may increase."

The bipartisan super committee has until Nov. 23 to provide Congress with a $1.2 trillion package of budget savings. Currently, the Obama administration is preparing fiscal 2013 and 2014 spending proposals that Hodgkins said may shave off between 10 percent and 20 percent of agency IT budgets. The deficit deal or lack thereof could further trim companies' government sales, he said.

The retrenchments, however, likely will spare IT investments anticipated to save money long term, such as health IT, Web-based cloud computing and cybersecurity, he said.

"The reality is the government still does not have sufficient workforces in many skill sets," which require private sector support, Hodgkins added. "There are some bright spots for the government sector in tech spending, despite the impending cuts in 2013 and maybe the super committee cuts."

It is unclear whether the financial unknowns are prompting tech firms to pull out of the government space.

"If there were to be cuts into discretionary funding that trickle into the government, that's obviously going to affect hardware and software providers," said Liz Hyman, public advocacy vice president for CompTIA, a trade association for IT companies. "It's already so hard for small and medium-size companies to participate in contracting, that there are a lot of question marks out there."

Congress resolved one uncertainty in contractors' favor Wednesday night by clearing a measure to repeal a 3 percent withholding tax on federal suppliers. The law was set to take effect in 2013.

Officials with the Software and Information Industry Association, which represents cloud providers, said, surprisingly, they are not getting calls from members concerned about the super committee's impact.

Firms are saying, "It's so far out of our hands. They are going to do what they are going to do," SIIA Public Policy Director David LeDuc said.

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// December 19
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