http://www.washingtonpost.com/wp-dyn/articles/A32622-2002Dec9.html By Renae Merle Washington Post Staff Writer Tuesday, December 10, 2002; Page E01 For more than a year, the region's technology contractors have been waiting in vain for the big boost in technology spending that was supposed to come from the government's new focus on homeland security. Could the early stages of the boom be arriving? Yesterday, California-based Computer Sciences Corp., with 8,000 local employees, announced that it would be hiring 400 employees, mostly in the D.C. area, to satisfy an increase in demand for information technology security. "Since mid-summer, there has been a noticeable upturn in demand for information security-related services among our clients in the U.S. government and commercial sectors," said Joe Stafford, vice president of CSC's Global Information Security Services. Meanwhile, Northrop Grumman Corp.'s information technology division plans to hire 400 to 500 employees in the next month and 4,000 next year. Fairfax-based STG Inc., which provides technology and engineering services, said it will add 700 jobs over the next three years. In September a subsidiary of computer reseller Micro Warehouse Inc. opened offices in Ashburn, adding 40 employees to help it focus on government clients. The company will be adding 100 workers to that office over the next six months, officials said. "Any kind of hiring is good news right now," said Stephen S. Fuller, a public policy professor and regional economist with George Mason University. "This is just indicative of the strength of the local economy." The increase in government spending expected after the Sept. 11, 2001, attacks has been slow to materialize despite President Bush's budget proposal, which called for spending on IT security to reach $4.2 billion in fiscal 2003, compared with $2.7 billion this year. Overall, information technology spending would reach $52.4 billion, up from $47.8 billion, under the budget proposal. The delay in approving the next year's budget and the Office of Management and Budget's cautious approach to spending has translated into a disappointing year for many contractors, industry officials said. "People were looking for the windfall after 9/11 for this kind of activity, and it hasn't showed up to the degree that has been expected," Fuller said. But now some are beginning to report an increase in business, exemplified by CSC's hiring announcement. "It was slower to emerge but will last longer than had been anticipated," he added. Lagging spending from the private sector makes the anticipated public spending even more welcome. CSC's revenue in the commercial sector declined 8 percent during its second quarter, which ended in September, down to $959 million from more than $1 billion during the year-earlier period. In August, the firm asked 66,000 employees to volunteer to take extended leaves of absence -- for at least six months -- at 20 percent of their pay. Only a "relatively small portion of them did," according to a company spokesman. In addition, the firm reduced its workforce by 1,000 employees during the past year through attrition and layoffs, the spokesman said. But government work can be troubling, too. Earlier this year, CSC quibbled with San Diego County over its progress on a seven-year, $644 million contract to provide all of the county's computer and telephone services. The country declared CSC in default after it didn't reach several contractual milestones and withheld a payment until a settlement was reached. "Since then things have been on track," a county spokesman said. Still, government contracting reflects the company's fastest growth sector. Revenue from government agencies increased 17 percent during the second quarter, to $772 million. And that doesn't include more than $200 million in contracts the company's Enforcement, Security and Intelligence unit won during the past three months, much of it with the intelligence community. Many of the new hires will work on those contracts and will need security clearances, a company spokesman said. - ISN is currently hosted by Attrition.org To unsubscribe email majordomoat_private with 'unsubscribe isn' in the BODY of the mail.
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