Those feeble grades federal agencies have received recently--one report card had an average grade of a D+--means the government will continue to spend heavily on cybersecurity-related IT.

A study by government IT market-intelligence firm Input projects federal IT cybersecurity spending will grow 27% over the next five years. "The effects of 9/11 have changed the way federal agencies approach cybersecurity," Marcus Fedeli, Input manager of federal opportunity products, said in a statement accompanying the report. "Continued fear over potential terrorist attacks has caused an almost desperate need for improvement of current standards and levels of security. New requirements will cause federal IT security spending to grow steadily this year."

Among the shortfalls in IT security in federal agencies cited by Input were insecure VPN connections, faulty firewall protection, and the need for customized systems. These vulnerabilities open IT systems to potential fraud, sabotage, and destruction.

Nearly 20%, or the $1.6 billion, of the money that federal agencies are spending this fiscal year on developing, modernizing, and enhancing IT is earmarked for cybersecurity.

"As demonstrated by the current security evaluation, there are still important advancements to be made in the area of cybersecurity, particularly within federal agencies," Fedeli added. "These agencies [will likely] rely heavily on outside contractors to provide the products and services necessary to secure IT systems governmentwide. The need to satisfy legislative mandates will create opportunities for technology vendors to work in the public sector."