Government technology contracts continue to expand

Government technology spending will increase but at a slower rate, reports the Washington Post. Despite industry consolidation, contractors are going to have a competitive year vyying for $200 billion in information technology contracts. 

Small and mid-size contractors are likely to have a competitive year as industry giants such as Lockheed Martin Corp. and General Dynamics Corp. compete for more than $200 billion in information technology contracts. An industry consolidation, in which at least 40 local firms were gobbled up in 2005, will also continue.

Will the war on terrorism keep the local economy afloat, or will $400 billion deficits start to pinch technology spending, which has fueled the Washington region's economic boom in recent years, will continue to increase, according to industry experts. But after growing nearly 30 percent since 2001, the sector is expected to expand more slowly.

Meanwhile, large defense contractors -- the makers of the military's ships and planes -- await the Pentagon's 2007 budget request in February. Initial fears that large weapons programs would be severely cut have eased, but some trimming is still expected.