Contract competition increasing at DHS, think tank says

Contract competition at the Homeland Security Department has increased significantly, according to a new report that still warns inadequate spending on research and development may hinder DHS down the road.

The paper published Tuesday by the Center for Strategic and International Studies found that the majority of contracts that DHS has issued since 2006 were subject to some form of competition during the bidding process. The scholars studied this by looking at data from the Federal Procurement Data System and analyzing the number of offers the department received from bidders, the contract’s funding mechanism and the type of contract vehicle used.

“Both total dollars and the share of DHS contracts awarded under competition with multiple offers increased significantly in 2010 and continued to increase in 2011, rising to a 51 percent share of overall DHS contract obligations,” the report said.

The report also said the department had increased the share of contracts allocated to medium-size firms. While the biggest government contractors were still pulling in the largest amount of total money, the scholars found their growth had slowed substantially.

“Relative to the guidelines set forth by the Small Business Administration, DHS has been successful in proportionally and consistently awarding contracts to small businesses,” the report said.

Guidance the Office of Management and Budget issued in March 2009  had substantially increased the use of fixed price contracts within DHS, according to the report. The need for expediency in the response to Hurricane Katrina had increased the number of combination contracts in 2005 and 2006, but that the number had fallen sharply in recent years, the report said.

“The sudden drop-offs in the combination, unlabeled and other categories in 2010 are likely responses to the Obama administration’s guidance to firm up federal contracting practices within government,” the report said.

The scholars also said DHS’ low level of research expenditures may inhibit future capabilities. According to the paper, the department has spent less than $1 billion per year on research and development, with most of that money going toward “short-term development and testing efforts,” instead of longer term basic research -- for instance, on technology or equipment development.

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