The Department of Homeland Security’s contracting budget fared better than others under government spending reductions last year, according to a new report released last week. But that could be because the agency faced worse cuts before sequestration.
A study by Washington’s Center for Strategic and International Studies charted the major trends in contract spending by the agency from 2004. Among its findings: DHS contract obligations — which is money the department is set to spend on contracts — declined by 3 percent between 2012 and 2013. In comparison, the Defense Department experienced a 16 percent decline in contract obligations over the same period.
“Within DHS, we’re seeing a decline that’s less dramatic than other agencies,” said David Berteau, the center’s project director.
The smaller drop was a result of the department’s planning for sequestration and the fact that it had already faced steep cuts in 2011, Berteau said. Congress cut the department’s budget among broader efforts to reduce the country’s deficit. The amount of DHS contract obligations dropped by 15 percent that year.
The agency spent less on services contracts than it did on products. Under sequestration, contracts for products increased by 8 percent (primarily because of a contract for a new patrol cutter), while those for services and research and development fell by 6 percent.
The types of contracts awarded also changed in line with the government’s emphasis on fixed-price contracts. In 2013, the share of fixed-price contracts rose to 68 percent of total DHS contracts, up from 57 percent in 2010.
Faced by budget cuts, government contractors have been increasingly competitive, and the battle for DHS dollars reflected that fact. The share of sole-source contracts and those that received only one or two bids remained relatively flat or declined in 2013, the report said. The share of contracts that had at least three or more bidders went up, Berteau said.
“Across the board, sequestration increased competition,” Berteau said.
Nick Nayak, DHS’s chief procurement officer, is set to leave the agency.
He will step down in the first week of July, according to a DHS official who was not authorized to speak with the media. Nayak is a federal acquisition veteran. Before his three-year tenure at DHS, Nayak worked at the Internal Revenue Service in different capacities, including as director of strategic acquisition initiatives. A replacement has not been named.
President Obama is issuing an executive order barring workplace discrimination by federal contractors on the basis of sexual orientation and gender identity. Many contractors already have similar policies in place, so the order is not expected to cause any major changes.
“Some of the largest government contractors are already among the most progressive companies in this regard,” Stan Soloway, president of the Professional Services Council, said in a statement. “We shouldn’t lose sight of the fact that the [order] is being issued as a proxy for broader legislation and not because there is any evidence of a particular problem among government contractors,” Soloway said.
Still, members of the contracting community welcomed the formal step.
“Inclusion is a source of opportunity, enrichment, and new thinking, and it is critical to our success,” Deb DeHaas, Deloitte’s chief inclusion officer, said in a statement.
Doug Lane will take over as chief executive of Reston-based Capgemini’s government solutions business, the company said in a release. Lane, who has previously worked at Booz Allen Hamilton, PriceWaterhouseCoopers and A.T. Kearney, will “oversee the strategic direction” of the firm, and guide its solutions work for the federal and state governments.
Lane replaces Douglas Charles, who stepped down in December, a spokesperson for Capgemini said. Charles is now president at talent consulting firm Korn Ferry.
Elsewhere, Lockheed Martin named John Rood vice president of domestic business development and operations, the same position Rood previously held at Raytheon. He replaces John Ward, who plans to retire on Aug. 1. Rood’s background includes work with the State Department, Defense Department, Central Intelligence Agency and the Senate.
Ashburn-based IT contractor Intelligent Decisions has acquired intellectual property rights and assets related to a virtual training software for soldiers.
Quantum3D, a San Jose-based software company, sold the rights to its Expedition DI product line for an undisclosed sum.
The Expedition DI line — which features helmets and weapons with screen displays, wearable computers and sensors, and other equipment — is intended to immerse the wearer in a virtual simulation of real-life situations.
Intelligent Decisions originally used the system to create a training system for infantry. Acquiring all rights to Expedition DI will help the company rapidly build new training systems by tweaking the existing model, instead of starting from scratch, said Clarence Pape, Intelligent Decisions’ vice president of simulation and training.
“We have already begun to enhance the fidelity [to reality], look, feel and functionality of the weapons and are underway to redesign the backpack to meet customer needs for wider, more flexible, or more compact and more powerful capabilities,” he said.
The company also hopes to develop similar products for international customers, expanding its market, Pape said.
Mohana Ravindranath contributed to this report.