Thomas A. Cellucci is asking the private sector, rather than taxpayers, to fund new technology that could make Americans safer. Some companies are happy to oblige.
Cellucci, the Department of Homeland Security’s chief commercialization officer, has championed a new acquisition model that takes advantage of the growing demand for products that are both innovative and can be marketed to an array of public-safety agencies. His program shifts the government’s investment costs to the private sector, which may also reap the potential rewards.
The Defense Department and other federal agencies should follow suit, he says.
“Why on earth would we be spending money and time developing products that private companies would be ready, willing and able to use their own resources to develop?” Cellucci says as he paces around his 10th-story Washington office. His arms flail as he talks passionately about free-market principles and the federal government’s tendency to be overly bureaucratic.
“This method, to me, is as clear as the big nose on my face,” he says.
But Cellucci acknowledges that the method will never replace traditional acquisition. He sees it as a more efficient way to obtain certain technologies — ones that have potentially huge payoffs for the companies able to develop them. He also emphasizes that this new way of doing business represents only a small part of the department’s total acquisition program.
Two years ago, Cellucci left his technology-consulting firm to accept a five-year appointment as Homeland Security’s first chief commercialization officer. The position was created to improve relations between the private sector and a then four-year-old department that had already wasted millions of dollars in failed contracts, according to congressional testimony.
After two days on the job, Cellucci had a sudden realization: “Too many companies come to the department with solutions, looking for problems.”
He felt that department officials should consult with first responders and law-enforcement officers to find out what technologies and products were needed in the field. Then department officials could post those requirements online. Private companies, Cellucci believed, would invest their own money finding solutions.
The program, which launched in July 2008, is called System Efficacy Through Commercialization, Utilization, Relevance and Evaluation, or SECURE.
Today, its first product, a blast-resistant camera, is ready to hit the market.
The department has posted on its website eight documents outlining technological challenges it hopes to overcome, and an additional 40 are being drafted. These range from the ability to purify vast quantities of water during disasters to the ability to protect restricted areas from intruders.
The department is in discussions with more than 45 companies that say they can develop technology to meet those needs. If they do, they would also be required under the SECURE program to have third-party testing agencies verify that their products work. Department officials will review test results to decide whether to issue the companies SECURE certificates, which are seals of approval that can be used as marketing tools.
“The hardest part has been convincing people that the program works,” says John S. Verrico, a department spokesman. “Folks are used to the traditional acquisition model, where you go to the government, get a big fat check, do the research and development, and sell the product back to the government.”
SECURE, though, has gained considerable attention in the private sector. Steve Dennis, technical director for the Homeland Security Advanced Research Projects Agency, oversaw the program’s pilot project, the blast-resistant cameras. He wanted low-cost forensic cameras that could withstand explosions and fires. Transit agencies, he believed, would install these cameras in buses and trains, just like airlines install black boxes in planes. Dennis says he originally planned to pay a private company nearly a million dollars to develop the cameras, but he wasn’t able to obtain government funds.
“This was about the same time the SECURE program started. I said, ‘Well, I’ve got to try it,’” he says.
But Dennis, who has been involved in government research for more than 20 years, says initially he was skeptical of the new acquisition method.
“To get companies to respond to the government’s needs usually requires money — there’s no way around it,” he says. “I didn’t think it would work, but I was faced with a problem I really needed to solve, and I had run out of options.”
In June 2008, the department posted a nine-page document on its website that outlined the technological problem: “The majority of mass transit systems are not able to reliably collect, store and protect video surveillance of potential future terrorist attacks,” the document states.
Dennis was intentionally vague on details, as he hoped companies would come forward with creative solutions. The document also included an estimate of how much transit agencies would be willing to pay for the technology.
In the first two weeks, 26 companies called the department to pitch ideas. Many of them asked how much government money was available. “A lot of them didn’t understand,” Dennis says. “After we explained, some of them said there was nothing they could do, and others said they would go talk to their executive boards to see if they could get the money themselves.”
After a month, he settled on two companies that offered solid proposals and had money on hand to invest: Rhode Island-based Videology and Ontario-based Visual Defence. The companies signed agreements with the department, and they began building prototypes.
Vicki Vey Looney, Visual Defence’s vice president for business development and general manager, says her company spent about $200,000 creating its product, SecurEye. “We’re a small company with no clout, no high-level access,” she says. “But we knew there was not a low-cost, blast-resistant camera module in existence today, and that intrigued us.”
She adds, however, that some small startup companies might not have enough money on hand to participate in SECURE.
By October 2008, Visual Defence unveiled a working model.
Dennis says he was shocked by how quickly both companies moved through the process. But Verrico says it makes sense that companies would move faster when their own money is at stake. In traditional acquisition, companies sometimes draw out the process.
“When companies are using government funds or are contracted, there’s no incentive for them to make the research and development go fast,” he says. “They’re going to continue to get the money while the project is ongoing.”
Three months later, in January 2009, Homeland Security researchers began testing both companies’ products. Typically, the SECURE program would require that they spend their own money having third-party agencies verify that the products work and meet the government’s stated needs. But Dennis decided to make an exception in this case. He didn’t think it would be fair to ask the private sector to bear the cost of blowing up a bus.
In February 2009, at Maryland’s Aberdeen Proving Ground, department scientists set off an explosion that left shards of metal hanging from nearby trees. Fourteen of 16 video cameras that had been placed inside the bus survived, and their video footage was unharmed.
Over the next nine months, testing continued. Today, the two companies are pitching their products to transit agencies in the United States and abroad. Looney says she wishes Visual Defence could have rolled out its camera sooner.
“From the business side of managing the process, DHS has been exceptionally responsive to the private-sector viewpoint,” she says. “But it was never fast enough. In the private sector, there’s a sense of urgency, and we didn’t always feel that same sense of urgency in the federal process.”
Cellucci says the department isn’t used to working at such a fast pace but that he’s evaluating options for streamlining the process. In June, he released a report that says other federal agencies should adopt an acquisition process similar to SECURE.
Homeland Security has already launched a second program, called FutureTECH, which is for laboratories. They can partner with the department to develop technology — at their own expense.
The department has posted on its website 10 documents that detail its FutureTECH needs. All 10 focus on technologies that detect or prevent the detonations of improvised explosive devices. Cellucci says 10 to 15 university and national laboratories have applied to participate in the program.
“We’re trying to give to the private sector a golden platter. We’re giving them what they spend so much time and money trying to understand: What are the requirements and how many people would want it?” Cellucci says. “And nobody’s better at commercializing products than the private sector.”
In September, Cellucci flew to California to talk to firefighters and first responders who were battling forest fires. He hoped to identify operational requirements that could be met through the SECURE program.
“So much junk has been sold to first responders that they need assurance that products and services work,” he says. “And it’s hard to write detailed requirements. You have to observe. You have to question. It’s one thing for them to tell you about all the smoke, and it’s another thing to be choking in it.”
Cellucci returned to Washington with ideas for five operational needs. Documents are being drafted and soon will be posted online.