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Budget Matters 

DHS Contract Spending Set to Grow 

11  2,016 

By Jon Harper 

The Department of Homeland Security is one of the few federal agencies increasing the amount of money it obligates to contractors, according to a recent report by market analysis firm Govini.

The growth is due to overall budget increases and the allocation of a larger share to contracts, said the report, “2017 Fiscal Year Outlook: Department of Homeland Security.”

The department’s discretionary budget authority increased 3 percent from fiscal year 2015 to 2016, from $39.8 billion to $41 billion. Additionally, the share of funds allocated to contracts increased to 36 percent from 35 percent.

“The topline trend means that DHS is prioritizing purchases of products and services over additional personnel and other internal resources,” the report said.

The department is seeking to develop next-generation systems that leverage advancements in the “internet of things,” digital transformation, data analytics and cybersecurity, it said. “These investments are intended to fill capability gaps, automate procedures that currently present security risk and bring about operating efficiency all while lowering personnel costs.”

Customs and Border Protection, the Transportation Security Administration and the Office of Procurement Operations fueled a 16 percent increase in overall DHS contract obligations to $14.6 billion in fiscal year 2016, a $2 billion bump from 2013, the report noted.

Obligations from each agency are projected to continue to increase by at least 3 percent in 2017, it said.

“Providers of advanced technology and technical services should target CBP as it plans to invest in next-generation detection devices that provide the operational advantages of automation,” it said.

TSA is projected to spend $200 million on improving baggage screening technology. Support for the agency in the coming years is “likely to be strong,” regardless of whether former Secretary of State Hillary Clinton or businessman Donald Trump becomes the next president, the report said.

The Coast Guard is undergoing a major recapitalization effort. Big-ticket items in the expected buy include: $240 million for fast response cutters; $100 million for offshore cutters; and $150 million to begin work on a polar icebreaker. Fiscal year 2017 will be a “strong year” for the  Coast Guard’s industry partners, the report said.

Cybersecurity has been identified as a key investment area for DHS and the Defense Department going forward. Cyber attacks launched by Russia, China and non-state actors are a growing concern among U.S. officials and politicians.

“The flood of cyber spending will continue under either a Trump or Clinton presidency,” the report said. “The threat is simply far too large to ignore.”

Photo: iStock
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