SMB Share of Federal IT Contracts Shrinking to 35%: INPUT 

The percent of federal IT prime contract dollars going to large companies increased from 50% in 2003 to 65% in 2005, while small- and medium-sized businesses saw their share decline by 15% during the same period, according to a recent study conducted by INPUT.  
  • 65 percent of federal IT prime contract dollars go to companies earning more than $250 million annually. 
  • The number of companies earning less than $10 million in spending on prime contracts has increased from 11,000 companies in 2003 to 18,000 companies in 2005. 

 “While the percent of federal IT spending with small companies has decreased, the number of companies participating has increased by 63%,” said Kevin Plexico, executive vice president for INPUT.  “The money spent by the federal government is getting spread over a significantly larger number of companies, which demonstrates that the barriers to entering the market have decreased.”

The top twenty information technology (IT) contracts to be solicited by the federal government in fiscal year 2007 (FY07) will be worth a combined potential value of nearly $120 billion, according to INPUT. The potential value of the awards represents a more than 50 percent decrease from last year’s top twenty IT contracts which were worth $240 billion.

The average ceiling value, the maximum possible value of the contract over its life, dropped year-over-year from $12 billion to $6 billion. 

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