Defense Spending Bill Shifts Tech PrioritiesDefense Spending Bill Shifts Tech Priorities

The Department of Defense spending bill includes nearly $680 billion for 2008, an increase of 8.4% over 2007, and the department's priorities are likely to affect the technology industry.

The Acquisition Improvement and Accountability Act of 2007 also will affect vendors, according to a report from Input.

"The global war on terror has spurred spending on advanced technologies, such as net-centric and embedded technologies, but has siphoned away funds for traditional or pure-play IT projects, resulting in a slight slowing of the annual growth rate of such technologies over the next few years," Lauren Jones, principal analyst for Input, said in a statement.

"While spending on traditional IT in DoD will still increase, Input forecasts that it will do so at a rate of about 5.5% over each of the next few years."

Jones said that the bill and related acquisition reforms could hurt technology vendors and integrators. A portion of the conference report would prohibit use of lead system integrators beginning in October 2010.

"Vendors should monitor how the acquisition reform is implemented and be ready to accommodate the changes it will require in their business processes and dealings with the department," Jones said.

The report states that vendors with core competencies related to embedded technologies and specialized networking will benefit from generous war appropriations.

Input helps more than 1,300 companies, organizations, contractors, and agencies develop business relationships with federal, state, and local entities. Its report, FY 2008 DoD Appropriation and Authorization -- Technology Investments Amid Conflicting Priorities, is available on Input's Web site.