The federal information technology market is facing another tough year in fiscal 2008, as the war on terrorism saps dollars and the lack of new appropriations forces agencies to delay plans for new projects.

The General Services Administration has awarded its long-awaited Networx and Alliant contracts, closing off those lucrative opportunities to all but the winners. Its Alliant small-business companion vehicle is yet to be announced.

The agency expects to award that contract this month.

But the outlook isn’t all bleak. Agencies will issue requests for proposals on some major contracts in 2008. Not all will actually be awarded during the year, but companies should be ready to bid on those that are suitable, analysts say.

The year will begin with a lame-duck president and many agencies still operating under continuing resolutions, the congressional mechanism that allows agencies to continue ongoing activities while awaiting new funding, said Arash Ardalan, senior analyst of federal research at Input Inc.

Ardalan and other Input staff earlier this month issued a report on the Top 20 Federal Technology Opportunities in 2008. The top six opportunities are with defense agencies and the military. Of the top 20, 13 are with the Defense Department.

“It doesn’t look to be any one common trend driving those dollars,” he said. “New dollar spending doesn’t look like it’s going to be there. It’s a lot of [operations and maintenance] dollars. Keeping systems maintained — you’ve got a lot of that.”

Many of the big opportunities Input identified are recompetes — old contracts entering new phases and reopening competition. They are solid, nuts-andbolts IT projects without a lot of sizzle, he said.

“In past years, we’ve had some real juicy opportunities in the report,” but not this year, Ardalan said. “You’ve got some larger recompetes coming out, and big companies will be vying for the opportunities. I feel like competition is going to be really tough.”

The pressure is on for companies to convince agency leaders that they offer the best value among competitors, he said.

“You’ve got your options out there for you,” he said. “The pricing obviously will be a big factor. You’re going out there telling people you’ve got the best price, you have to be able to show people that’s actually what will happen.”

Operating under continuing resolutions has become a normal part of the budget cycle in recent years, said Greg Baroni, president of the federal systems division at Unisys Corp. Businesses have no choice but to adjust their cycles to match, he said.

“It’s nothing new,” he said. “If I’m looking at the ’08 appropriations cycle, it seems to be following a path that’s kind of familiar. Not saying we appreciate it, but it appears to be nothing new.”

Such stopgap measures become just a normal part of doing businesses, he said. “The issue that it really impacts is new awards.”

Unisys will bid aggressively on some of Input’s Top 20 list, he said. One is the Homeland Security Department’s Information Technology and Managed Services contract, the next incarnation of which will be awarded in December 2008 and be worth as much as $1 billion, Input said.

The contract is for the Transportation Security Administration, a component of DHS, and Unisys has held it since TSA first awarded it in 2002.

“That’s one I can assure you we are intending to go fullthrottle at,” Baroni said. “All things considered, we are a partner that has acted in good faith. We’ve done good work for them.”

TSA is one of the company’s top priorities.

But the company sees other appealing opportunities in the coming months, too, including the Education Department’s Enterprise Development Support Services contract for development services, a $750 million deal that the department will award in May, according to Input.

Baroni said he does not expect to see many new projects launched in 2008. Most agencies will leave new work until after the November elections, waiting for the new administration to outline its plans.

“While some people are optimistically saying it means we won’t see new work until 2009, really it will be the fiscal 2010 budget that will see the new president’s priorities,” he said.

Continuing resolutions don’t end new projects but do slow them, said consultant Bob Guerra, a partner at Guerra, Kiviat Inc.

“I don’t think continuing resolutions dampen it, it just delays their implementation,” he said. “Sooner or later, the budgets are going to be approved, whether they go up, down or sideways.”

“I’ve become callous to continuing resolutions,” said Jim Russell, vice president of the public sector at Symantec Corp. “You have to plan and manage the different people that are affected by [continuing resolutions] vs. the agencies that are not affected.”

Contractors must invest in the affected agencies and not abandon them, he said.

“That investment you make while they’re in continuing resolution will pay dividends when the continuing resolution is taken away,” Russell said.

Associate Editor Michael Hardy can be reached at mhardy@1105govinfo.com.