Homeland Security Update

October 2005

By Daniel Kah, Research Director

AngelouEconomics

Led by Secretary Michael Chertoff, the Department of Homeland Security is made up of 22 agencies and over 180,000 employees. Their vision remains to preserve, protect, and secure America’s homeland. As a new organization, the DHS is frequently undergoing reorganization, but a final organizational structure appears to be in place. In FY 2006, DHS proposes to finish consolidating all R&D activities within the Science and Technology (S&T) Directorate. Within the year, the Transportation Security Administration (TSA) and the Coast Guard will their R&D portfolios to the S&T, which will become responsible for 100% of the department’s funding. President Bush increased the department’s 2006 budget to $41.1 billion. This 7% increase in funding from 2005 will provide additional opportunities for research and product development.

The Department of Homeland Security is now responsible for an entire spectrum of technology research and development, from research, engineering, and design, to the deployment of new technologies. The 2006 DHS budget signals a shift in the department’s focus toward a more long-term, well-balanced portfolio of funding grounded in product development. Since its creation in March 2003, R&D was focused on near-term technology development. In 2005, the R&D budget increased 15.5%. This year the program’s budget increased $252 million or 18% from last year’s total and now is now entering a mature phase, in which large increases are no longer assured. Despite the slowing of growth, this investment in the future development of science and technology continues to provide new economic opportunities for cities and companies that can help develop America’s future innovations in Homeland Security.

WHERE IS THE RESEARCH PERFORMED?
DHS research and development programs occur in federal laboratories, academic institutions, and federally funded R&D centers. The DHS has strong relationships with key Department of Energy Laboratories, including Los Alamos, Lawrence Livermore, Sandia, Pacific Northwest, and Oak Ridge. The Homeland Security Advanced Research Projects Agency (HARPSA) awards grants to these research laboratories for projects focused in biological, chemical, radiological, and nuclear countermeasures.

RESEARCH OPPORTUNITIES
The DHS research program contains a wide variety of opportunities but the following sectors received sizable funding increase for 2006.

Emergency Preparedness - Biological Countermeasures funding increased to $384 million and accounts for 34% of total R&D funding. During 2006, this program will develop and enhance second-generation biopathogen detection (Gen 2 BioWatch) system and deploy it in top threat cities, while research and development will continue to optimize the original BioWatch system in the remaining cities. The Gen 2 system will take advantage of improved sample handling and a different detection approach to greatly expand detection and analysis capabilities.

Science And Technology – Current and future initiatives include National Bio and Agrodefense Facility (NBAF), Low Volatility Agent Warning System, Rad/Nuc Countermeasures Test and Evaluation Complex (CTEC), and Counter-MAN Portable Air Defense Systems (C-MANPADS). In 2005 the BioSurveillance program received an increase of $65 million; however this year the program received limited funding. The DHS appropriations bill signed by President Bush on October 1, 2003 created a discretionary reserve of $5.6 billion to fund the BioSurveillance through FY2013. Despite the long term funding, it was regulated not to exceed $3.4 billion during FY2004-2008, and has been almost completely spent.

The NBAF will extend the capabilities of the National Biodefense Analysis and Countermeasures Center and strengthen the nation’s ability to anticipate, prevent, respond to, and recover from the intentional introduction of biological threats. The NBAF will also attempt to heighten the awareness of the health of Americans. The Low Volatility Agent Warning system will serve as the basis for a warning and identification capability against chemical agents whose vapor is difficult to detect. Additional FY 2006 funding will be used to develop a protection-mode capability to detect these materials upon release in specific environments. The CTEC will provide the nation with new facilities and capabilities to validate the performance of systems under development to protect the U.S. from chemical attacks. It will also help to evaluate the performance of our current homeland security system. C-MANPADS will initiate in to Phase III which encompasses delivery and installation of pre-production C-MANPADS equipment on commercially operated aircraft.

Transportation Security - Under this new organizational structure of DHS, the department will eliminate the Border and Transportation Security Directorate and the Emergency Preparedness and Response Directorate. The changes made are meant to centralize and strengthen policy development, improve sharing of intelligence and information, bolster operational efficiency and upgrade preparedness.

WHAT ARE LOCAL SPENDING DOLLARS GOING TOWARD?
Most Homeland Security Department grants are formula grants, which are distributed by the federal government, based on population and other data. Under the grant program, states must pass 80% of the grants along to local government to achieve local responder needs. Some argue this legislation must be changed and the funds should be distributed based on level of threat.

These funds are then passed down to counties and localities so that large urban areas receive funds. Other recipients are the regional authorities who provide security to our ports and mass transit agencies. The mass transit and port programs fund their assessments, planning, surveillance, and physical security. Traditional first responder agencies like police and fire departments, ambulance services, and hospitals receive funding for weapons of mass destruction training and communications planning. Academic institutions, like large state and private institutions, receive funds for research in new technologies such as aviation bomb detection systems, biological countermeasures, and nanotechnology. Given the current structure of DHS grants, opportunities lie in attracting research funding and product development awards.

LINKS OF INTEREST
Department of Homeland Security - Organization

Department of Homeland Security - Budget

Department of Homeland – Procurement Forecast

Department of Homeland – Current Procurement Opportunities

American Association for the Advancement of Science

American Association for the Advancement of Science - Future DHS Funding

Homeland Security Advanced Research Project Agency

Homeland Security Advanced Research Project Agency – Small Business Innovation Research Program

Project BioShield

Congressional Budget Office, Economic and Budget Issue Brief