Contracting for Information Technology Services

GAO-03-384R: Published: Feb 14, 2003. Publicly Released: Mar 17, 2003.

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William T. Woods
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Federal agencies spend billions of dollars annually acquiring information technology (IT) services from thousands of contractors using a variety of contracting methods. IT services include computer and telecommunication services, as well as the testing, quality control, installation, and operation of computer equipment. We (1) identified trends in federal spending for IT services from fiscal years 1997 to 2001 and (2) determined the distribution of federal spending for IT services among small, medium-size, and large businesses in fiscal year 2001, the latest year for which such information was available.

Federal spending on IT services almost doubled from fiscal years 1997 to 2001, increasing from $9 billion to more than $17 billion. While the Department of Defense remained the single largest purchaser of IT services throughout the period, spending on IT services through the General Services Administration (GSA) greatly increased, mostly the result of spending by GSA's Federal Technology Service on behalf of other agencies. Spending on IT services through GSA's federal supply schedule program grew from about $405 million to $4.3 billion. The distribution of IT services spending in fiscal year 2001 was 14 percent to small businesses, 21 percent to medium-size businesses, and 62 percent to large businesses.

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