Beyond the Beltway
By the standards of the federal government's top contractor, the money involved in a deal with the Texas Department of Information Resource several weeks ago is almost pocket change.
Lockheed Martin, the No. 1 go-to corporation for both civilian and defense agencies, will take the lead on a $400 million initiative in Texas to outsource an array of technology services over the next five years. That includes providing computers and other technology, as well as providing technical advice and services.
The take from the contract will be a pittance compared to the more than $26 billion Lockheed took in from the Pentagon and federal agencies in fiscal 2005. But it's an important indication that the defense giant, like its rivals, continues to press hard on strategies to diversify beyond the DoD and Beltway.
Sure, the federal government is spending more than ever on the increasingly vast variety of stuff that Lockheed and its rivals sell. Last year, the DOD alone spent $298 billion on contracts -- 10 percent more than the previous year.
But as Government Executive magazine noted, what goes up must come down. The swell of spending on IT by federal agencies over the last decade has begun to wane and likely will be relatively flat for awhile to come. And surely the war in Iraq, which has created a mammoth surge in DoD spending on just about everything, can't last forever.
Can it?
By Robert O'Harrow |
July 19, 2007; 6:04 AM ET
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Posted by: Michael Lent | July 19, 2007 8:02 AM
I'm not sure I even understand what this blog post was about. It has no point other than to let readers know that LM has non-DoD customers and a war can shift military spending priorities. Shocker. Thank you Washington Post.
Posted by: WSG | July 19, 2007 12:30 PM
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The budget prognistication in the blog post today has been widely known and accepted for up to a year back.
The "Can it?" question appears to mean, literally, "can the Iraq war last forever?" While somewhat surprising in this blog's scope, the question is a political one. The beginnings of an answer are: it can last, for the US, at least as long as the current administration.
What needs to be brought out WRT acquisition is that it is causing significant diversions of spending on discretionary projects, including many DoD IT systems. Even F-22 purchases have been cut a little because of the war. The war is also sucking funds out of the civil agencies that could have spent it on other worthy contracts.
War spending has been a plus for the makers of some military systems, supplies, and e quipment, and services providers like the fabled KBR. It will have a persistent effect long after the US "redeploys," as the "recapitalization " of worn-out systems
will continue to siphon funds from other kinds of programs supported by contractors for other important national needs.