HP starts work on $2.5B NASA contract

Government spending slowdown hurts GDP, but IT vendors may do OK

The weak first quarter growth in gross domestic product announced by the government Wednesday was blamed, in part, by a decline in public sector spending. But some tech vendors, including Hewlett-Packard, selling to the federal government may not be hurt by this.

HP said Wednesday it had won an outsourcing contract with NASA worth as much as $2.5 billion over an initial four-year period, with two three-year options -- 10 years.

This is a new contract for HP, which got the green light from NASA just last week to begin work. NASA spends about $1.8 billion annually on IT.

HP will take responsibility for all of NASA's end-user computing, including personal computers and other devices, under this contract.

"HP will modernize NASA's entire end user infrastructure, by delivering a full range of personal computing services and devices to more than 60,000 users," said Dennis Stolkey, HP senior vice president and general manager, U.S. Public Sector, HP Enterprise Services.

HP will also provide support as well for tools to "allow its employees to more easily collaborate in a secure computing environment," said Stolkey.

The overall market for all federal contracts spending from 2010 to 2012 is expected to decline about 1.4% to $752 billion, according to a recent forecast released by Federal Sources.

Federal IT spending is inching up over that period, and is set to be at $79.5 billion in 2012, about a 1% increase, said Ray Bjorklund, an analyst at Federal Sources.

The U.S. Dept. of Commerce cited declines in federal, state and local government spending as key reason for anemic first quarter GDP growth rate of 1.8% as compared to 3.1% in the fourth quarter.

Lockheed Martin had managed end user computing under a prior program at NASA, the Outsourcing Desktop Initiative. This new program is called Agency Consolidated End-User Services, or ACES.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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