Cowboy contractors pocket $19bn from US government

The US government wasted $19bn last year in payments to IT contractors for projects that failed to meet their objectives.

In total the US government spent $42bn on IT in 2001. That budget is set to grow to $52bn by 2003.

Speaking today at the Information Builders summit in Baltimore, Alan Balutis, executive director and COO of US IT industry body the Industry Advisory Council (IAC), said the government needed to show greater financial responsibility.

"Most financial accountability in government is down to the Herculean efforts of the financial staff, not down to good systems," he said

Balutis also said the US government needed to adopt a more result-orientated approach to IT projects.

Federal agencies and departments spend $110bn annually on IT services contracts, money that could reap improved benefits if contracts were awarded on a performance basis.

Over 400,000 US federal employees now have to compete with private contractors for their jobs, part of a greater move that will eventually see 425,000 federal jobs put out to tender on a performance-based criteria.

At $8.3bn the US Department of Defense has the highest IT budget this year, with expenditure rising to over $9bn - or 22 per cent of the total $52bn budget - by 2003.

Twenty-eight per cent of that spend will go on technology to secure US borders, while 13 per cent will be spent on upgrading airport security. Sixteen per cent will be ear-marked for defence against biological terrorism.

In contrast just two per cent of the Department of Defense's IT spend for 2003 will go on systems that allow information to be shared between agencies.