Homeland Security relying more on fixed-price contracts, report says

The share of Homeland Security Department contracts that fulfill the Obama administration's preference for fixed-price awards rose steadily over the past four years to reach 10.3 percent, or $7.5 billion in fiscal 2010, a new think tank study reports.

That rise followed an earlier hike in dependence on time-and-materials or cost-reimbursement contracts in the wake of natural disasters such as Hurricane Katrina in 2005, according the Center for Strategic and International Studies. Its study, "DHS Contract Spending and the Supporting Industrial Base," released Thursday, analyzed federal data from from fiscal 2004 to fiscal 2010, dealing primarily with service contracts. It incorporated input from DHS officials.

Homeland Security's move toward fixed-price awards coincided with reduced use of purchase orders and contracts awarded without competition, the report noted. David Berteau, the project's director who runs CSIS' defense-industrial initiatives group, applauded efforts by the Office of Management and Budget to "require agencies for the first time to use the Federal Procurement Data System as a management tool to track improvements and enhance competition."

The report also noted a doubling in the use of multiple-contract awards at Homeland Security and a 10.6 percent yearly decline in single-contract awards. "Multiple awards not only help create competition," Berteau said, "they help the agency decide what it is seeking in the contract's requirements." The value of contracts awarded without competition shrunk from a high of $7 billion in 2006 to $1.6 billion in 2010, the report said.

Homeland Security has been successfully adhering to Small Business Administration guidelines for awarding contracts to small firms. "Unlike the Defense Department, which has a growing share going to large companies, DHS has a broad diversity of companies, which also emphasizes competition," Berteau said.

The agency controls about half the contracts dealing with homeland security, with the Pentagon running a quarter and the remainder coming out of the Justice, State, Energy and Health and Human Services departments.

The portion of contracts run out of the Office of the Secretary at Homeland Security rose 900 percent and in 2010 accounted for the largest share of contract spending, the report noted. The bulk of this increase reflects the recent transfer of the Federal Protective Service, which supervises many private contractors, from Immigration and Customs Enforcement to Homeland Security's Office of Procurement Operations, within the secretary's office, the report said. Berteau said the growth is not necessarily a reflection of the management approach of Homeland Security leadership.

The report's list of the top 20 Homeland Security contractors indicated a flip in priorities, noted project co-director Guy Ben-Ari. "It shows the dynamic nature of DHS contracting, with less emphasis today on disaster response and more on the rise of IT and defense awards," he said.

In 2005, the top five DHS contracting companies were Circle B, Integrated Coast Guard Systems, Fairmont Homes, Unisys and Graham. In 2010, the top five in were IBM, Lockheed Martin, Integrated Coast Guard Systems, Unisys and Accenture.

Established in 2002, Homeland Security is the only national security agency whose budget was not significantly increased in the years after the Sept. 11 terrorist attacks, Berteau said. Hence Homeland Security planners must remain aware that they don't have "the same cushion for the looming drawdown" in federal spending as do other agencies.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.