The Department of Homeland Security (DHS) has opened up 75 percent of its contract spending to competition, an amount well above federal goals and yet it still has room to enable further competition, representing more opportunities for businesses and organizations, according to researchers with the Center for Strategic and International Studies (CSIS).
In 2008 DHS held competitions for nearly 61 percent of the work it contracted for and in 2011 75 percent of the contract dollars it awarded was competitive, David Berteau and Guy Ben-Ari say in their latest report, DHS Contract Spending and the Supporting Industrial Base, 2004-2011.
The 75 percent figure is a “very high number for any department that awards as much contracts and a diversity of contracts at the Department of Homeland Security does” and so it “is in rare territory here,” Berteau said at a briefing yesterday to discuss the new report.
The report shows that competition with multiple bids from organization is up, 51 percent in 2011 versus 34 percent in 2008, while competitive solicitations that receive a single offer have decreased slightly in the past few years, down to 24 percent in 2011 versus 27 percent in 2008, Berteau said.
Spending for work that involves no competition has fluctuated a bit but accounted for $2.8 billion in contracted work in 2011 versus $3.5 billion in 2008.
“Clearly there still is a lot of opportunity for competition,” Berteau said. “Both in terms of competitive solicitations in which there is only a single offer and in terms of awards not competed for a variety of reasons. And from a business development perspective, even in an era of declining budgets there is still tremendous opportunity for finding new work and increasing the work that you already have.”
DHS is also making progress in moving more of its contracts to fixed price work, according to the report.
The share of fixed-price contract spending rose from 56 percent in 2010 to about 65 percent in 2001, Ben-Ari said. That increase is in line with 2009 guidance from the White House Office of Management and Budget to federal agencies to increase the use of fixed price contracts to improve affordability for the government.
The data for the report shows that “DHS actually implemented this policy,” Ben-Ari said.
All told, DHS spent $14 billion in contract obligations in 2011, level with 2010, the report says. Most have that funding, $10.2 billion in 2010 and $9.6 billion in 2011, was for services. Products accounted for $3.3 billion of the total in 2010 and $4.1 billion in 2011 while research and development makes up a small amount, $400 million in 2010 versus $500 million in 2011, the report shows.
There is a lack of long-term stability in research and development spending within the DHS components, Ben-Ari said. The amount of spending that DHS’ operational components devote to R&D is inconsistent year-to-year, according to the report.
“There’s not really a trend here for any key component…where you can say there’s a steady stream of R&D dollars going to one element or another or one component or another,” Ben-Ari said. These are investments that take place over a number of years and “we don’t see that level of commitment on R&D contract dollars by DHS,” he said.