The growth of federal IT spending will slow dramatically over the next five years, according to the market research firm Input.

The researchers forecast a compound annual growth rate of 3.9% between fiscal 2008 and 2013, from $71.9 billion to $87.8 billion. During the past two decades IT spending has increased at an annual rate of about 7%.

The report blamed the slowdown on “the transition of power [to a new presidential administration] during both an active and expensive war and a souring national economy.”

“After a sustained period of relatively unbridled increases in federal IT expenditures, the market has entered a period fettered with uncertainty and complexity that has slowed the growth in IT spending to near historical lows,” the report said.

“The spending environment may seem gloomy, but in light of fiscal and economic conditions, IT spending growth remains healthy,” Input principal analyst John Slye said.

He said factors driving IT spending include information sharing, the need for better IT management techniques, and relatively flat federal employment levels.

The Defense Logistics Agency plans to increase its scrutiny of payments to contractors in an effort to reduce improper payments.

Auditors for the Defense Department inspector general estimated DLA made $93.3 million in improper payments in 2005 and 2006, but had no process to identify and report on the payments. The agency spent $35.2 billion in fiscal 2006.

The auditors said DLA identified four areas at risk for significant improper payments: Customer Pay, Integrated Prime Vendor, Fast Pay Contracts, and Contract Closeout. The agency agreed to develop an Improper Payment Plan to track the payments, and develop an action plan to improve its contract-closeout process.

“Unless it improves its identification and reporting process, DLA cannot show that it is making progress in reducing the amount of DLA improper payments and correcting payment problems in programs that are at significant risk for improper payments,” the auditors said.

GSA plans to establish a mentor-protégé program for its contractors. According to a proposed rule in the June 10 Federal Register, the program would be open to small business, small disadvantaged business, HUBZone companies, veteran-owned and service-disabled veteran-owned small businesses and woman-owned small businesses.

The proposed rule is GSAR Case 2006-G501. Comments are due Aug. 11.

Congress voted to add $101 million to the president’s SBA budget request for 2009. Both houses have passed the federal budget bill, but the spending levels will be determined by appropriations bills.

Senate Small Business Committee Chairman John Kerry, D-MA, and the committee’s ranking Republican, Olympia Snowe of Maine, sponsored the SBA increase. The budget blueprint provides increased funding for Small Business Development Centers, Women’s Business Centers, microloans, contracting assistance, veterans outreach programs, and technical assistance programs, and increases loan oversight while reducing oversight fees paid by lenders.

A bipartisan group of Congress members proposed creation of a Small Business Information Security Task Force within SBA to help small firms understand and respond to threats to their IT systems.

The Small Business Information Security Act, S. 3102 and H.R. 6206, is sponsored by Senators John Kerry, D-MA, and Olympia Snowe, R-ME, and Reps. Michael Michaud, D-ME, and Donald Manzullo, R-IL.

Sen. Snowe said a 2005 Small Business Technology Institute survey found that nearly one-fifth of small businesses do not use virus-scanning for e-mail, over 60% do not protect their wireless networks with encryption, and two-thirds do not have an information security plan. “It is clear that we must get serious about helping firms to protect themselves from cyber predators, she said.

The SBA unit would identify information security concerns and possible solutions and recommend how SBA can better assist small businesses to react to cyber-security challenges.

SBA is considering a waiver of the nonmanufacturer rule for televisions, NAICS code 334220 product number 5820. The agency believes no small business is supplying those products to the government.

Comments are due June 19.