Report: Department of Homeland Security little affected by sequestration


The Department of Homeland Security’s Washington headquarters in 2010. The agency weathered government spending cuts better than others, according to a new report. (Win McNamee/Getty Images)

The Department of Homeland Security’s contracting budget didn’t suffer much under government spending reductions last year, according to a report released Tuesday. 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 nature of contract spending varied greatly within the agency, according to the report.

For example, contract obligations for the Transportation Security Administration and Immigrations and Customs Enforcement declined 15 percent and 13 percent respectively in 2013, compared with the previous year. At the same time, the Coast Guard saw contract obligations increase by 6 percent, mainly because of one large order for a new patrol cutter.

The agency spent less on services type contracts than it did on products. Under sequestration, contracts for products increased by 8 percent (primarily due to the cutter contract), 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.

The agency’s top vendors in 2013 included Falls Church-based Computer Sciences Corp., Huntington Ingalls, Lockheed Martin, IBM and Science Applications International Corp.

Amrita Jayakumar covers federal government contracting for Capital Business, The Post's local business publication.
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