Uncle Sam Still Ranks As The Best Customer In Tech Services Field; Spending On The Rise; Firms that cater to feds are in a rare tech sector that actually can grow.(INTERNET & TECHNOLOGY)

Byline: J. BONASIA

These days, investors can run but they can't hide.

Tech stockholders especially have suffered from the stalled economy.

Where can they turn? To companies that provide government tech services, say a number of analysts.

"This is the single best end-market of any technology or business services industry," said Brett Manderfeld of U.S. Bancorp Piper Jaffray. "Overall growth is accelerating in the federal market, and there are not many end markets where that is the case."

The U.S. government already is the nation's largest information technology customer. President Bush has proposed spending $52 billion on IT in fiscal 2003, a 15% hike over 2002.

As a result, companies that offer consulting and tech services to federal agencies are faring well. For example, Lockheed Martin Corp. has seen per-share profit and sales rise year-over-year for the last four quarters. Its sales fell in four of the five previous quarters.