Fiscal cliff or not, it's already rough for federal IT vendors

White House bars vendors from warning of sequestration-related layoffs

By , Computerworld |  IT Management

The White House wrote that memo at the end of September. It is now less than two weeks to the New Year and uncertainty about Congress remains. Ray Bjorklund, vice president and chief knowledge officer at Deltek, a market research firm, believes federal agencies will continue with routine IT purchases post sequestration. But big program spending may be cut.

IT agencies are going to be careful in any case, because if they were to award a contract now and if sequestration happens, "that contract would probably have to be broken later in the year," said Bjorklund.

Sequestration may well slow down the ability of the government to keep up with projects that require some upfront investment, such as data center consolidation. The government has plans to close 962 data centers, out of 2,800, by 2015. A government data center, by definition, can be as small as large closet.

Sequestration-mandate cuts "slows down the ability to realize the savings, because of acquisition programs are not moving forward as smartly and swiftly as they would in a regular year," said Bjorklund.

Steve Charles, co-founder of ImmixGroup, which helps tech firms do business with the government, said the budget turmoil may help some tech firms that sell products, such desktop virtualization and cloud services, get contracts, especially if they can quickly deliver ROI.

"This very disruptive environment that we are in actually favors the disruptors," said Charles.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

See more by Patrick Thibodeau on Computerworld.com.

Read more about it industry in Computerworld's IT Industry Topic Center.


Originally published on Computerworld |  Click here to read the original story.
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