Magazine article National Defense

Budget Crunch Sharply Reducing the Amount DHS Spends on Contracts

Magazine article National Defense

Budget Crunch Sharply Reducing the Amount DHS Spends on Contracts

Article excerpt

* The amount of money the Department of Homeland Security spends on contracts for goods and services is falling by about $2 billion per year, according to one industry analyst.

The department in fiscal year 2011 issued $14.2 billion in contracts. The following year saw that amount drop to $12.4 billion. And with only a couple weeks remaining in fiscal year 2013, DHS and its agencies had only spent $10.7 billion, said John Hernandez, Frost & Sullivan senior industry analyst.

"I see a downward trend as far as contracts awarded. The [agencies] are tightening their belts," he said. The delays are seen as a way for the department to contend with Congress passing continuing resolutions.

The Coast Guard and its efforts to modernize its fleets will take the biggest hit in the coming years, he predicted. Overall, the department has been delaying awarding contracts for big-ticket items, of which the Coast Guard has several.

A contract for 25 offshore patrol cutters is a long time in coming, and worth up to $12 billion over its lifetime. "Whether that is going to take place, personally I doubt that very much," Hernandez said.

The fast response cutter contract has been reduced to 30 from the original planned buy of 58. "I think they are going to get what they can get and the rebid may not come until 2015, once all the dust settles," he said.

A big spender on technology in the past, the Transportation Security Administration is also slowing down its equipment buys. …

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