Report Sees Fast Growth in e-Gov Spending Federal agencies’ spending on e-government solutions is expected to increase 38% over the next five years, according to a report by the market research firm Input. Input says agencies spent a little more than $4 billion on e-government projects in fiscal 2004; it forecasts an increase to nearly $6 billion by 2009. The departments of Defense and Homeland Security are likely to be the biggest spenders, the report says. The Office of Management and Budget divides e-gov initiatives into four categories: government-to-citizen, government-to-business, government-to-government, and internal efficiency and effectiveness. Input says OMB is a major driver of agencies’ efforts as part of the President’s Management Agenda. “Pressure from OMB continues to make e-government initiatives a priority for federal agencies,” said Chris Campbell, senior analyst, federal market analysis at INPUT. The huge bulge of federal IT employees who will reach retirement age over the next few years will force agencies to look outside for technical expertise, Campbell added. The impact of legislation such as the Government Paperwork Elimination Act and the E-Government Act of 2002 will also fuel the drive for expanded e-government programs. Input expects the greatest growth in new e-government spending will occur in the government-to-business segment. Software for e-government solutions will be the fastest growing segment of spending. “Due to the nature of e-government programs, much of the work is targeted at specific areas of operation, such as Web development,” Campbell noted. “As a result, vendors looking to team should consider looking beyond large-scale IT vendors and seek opportunities with smaller subject matter experts.” However, Congress has cut the administration’s budget requests for e-gov projects as critics questioned the savings projections. Campbell’s report suggests more money will start flowing as agencies provide evidence of real savings.