State and local spending on outsourcing levels off

State and local spending on outsourcing levels off

Spending on IT outsourcing among state and local governments grew little in 2004, according to a new report from Input.

The Reston, Va., research firm found spending reached $11.3 billion this year, slightly higher than spending levels in 2003.

But replacing an aging workforce and legacy equipment will spark growth in 2007, reaching $17.7 billion in 2009, the Input report projected.

The political debate surrounding offshore outsourcing was likely a factor in the slow spending growth. More than 30 states introduced legislation during the last year to restrict or prohibit contract work from being performed outside the United States. Input officials expect these bills will impact the market over the next two years.

'The increasing demand for outsourcing in the coming years will be borne out of necessity, which politics will be unable to refute,' said James Krouse, manager of state and local market analysis at Input.

About the Author

Doug Beizer is a staff writer for Federal Computer Week.

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