The Department of Homeland Security (DHS) had a decline in contract obligations in 2013 versus 2012 but prior year reductions dating back to 2009 meant that sequestration had a limited impact on spending last year, according to a new report by the Center for Strategic and International Studies (CSIS).
DHS funded contract obligations dipped 4 percent to $12.8 billion in FY ’13 versus $13.4 billion in FY ’12 and were down 3 percent when accounting for DHS-implemented contract obligations says the report, U.S. Department of Homeland Security Contract and Grant Spending and the Supporting Industrial Base, 2004-2013.
“Compared to the Department of Defense, which saw contract obligations decline by 16 percent, DHS executed sequestration in 2013 without drastic reductions in contract obligations,” the report says. “One factor mitigating the decline in contract obligations between 2012 and 2013 may have been the large decline between 2011 and 2012 (-14 percent)—the steep drop in contract obligations n 2012 may have helped ensure that only moderate reductions were needed in 2013 to comply with sequestration spending levels.”
The report also says that between 2004 and 2013 when overall DHS discretionary outlays increased at 6.3 percent on average, the department’s funded contract obligations increased at just 2.8 percent on average.
Breaking out contract obligations by DHS agencies and other components, CSIS finds a lot of variation between 2012 and 2013. For example, the Coast Guard actually increased its contract obligations by 6 percent to $2.9 billion while the Transportation Security Administration spent 15 percent less, down to $1.6 billion.
The Federal Emergency Management Agency also spent more during this, with contract obligations up 4 percent to $1.2 billion, while the Office of Procurement Operations, which handles contracts for various headquarters offices such as Science and Technology and the Domestic Nuclear Detection Office, stayed level at $2.5 billion.
At Immigration and Customs Enforcement and Customs and Border Protection contract obligations declined 13 percent to $1.1 billion and 6 percent to $1.7 billion respectively, the report says. An examination of CBP’s contract obligations by CSIS finds that the agency’s contract obligations awarded without competition has grown from 17 percent in 2009 to 46 percent in 2013, despite efforts by the Obama Administration to increase completion across the federal space.
The report also points out that in the past few years CBP hasn’t obligated any significant prime contract dollars to the top six defense contractors in the U.S.
Comparing contract obligations between products and services, including research and development contracts, the report says DHS contract obligations for products declined 3.7 percent between 2010 and 2013 and were down 5.7 percent for services and R&D contracts during that period on average.
Examining contract obligations by vendor size, the report says the top six Pentagon contractors saw their share of awards fall by 24 percent to $800 million in 2013 versus 2012 while large contractors as a whole saw their share dip 1 percent to $4.5 billion.
Small contractors saw their share of contract obligations slip 3 percent in that period to $3.8 billion while medium-size contractors saw their share edge up a percent to $3.3 billion, the report says.