DHS tech budget to rise

The Department of Homeland Security will increase steadily its spending on information technology products and services during the next five years as it pushes to integrate existing systems and get new ones in place.The department's IT spending is expected to rise from $3.7 billion in 2004 to $4.6 billion in 2009, an average annual increase of 4.4 percent, according to a new report released by the Government Electronics & Information Technology Association.The department's IT budget is among the fasting growing and second largest of all civilian agencies, according to GEIA. The Department of Health and Human Services has the largest budget, which is expected to grow from $4.8 billion in 2004 to $6 billion in 2006. Overall, civilian agencies' IT budgets will grow about 3.7 percent annually, from $31.4 billion 2004 to $37.6 billion in 2009. In contrast, defense agency IT budgets will grow from $27.9 in 2004 billion to $34.9 billion in 2009, an annual growth rate of 4.6 percent.The Arlington, Va.-based GEIA, which represents technology and telecommunications trade associations, released its annual forecast of federal technology spending last month.Perhaps no department was more affected by the creation of Homeland Security than the Treasury Department. By turning over the Customs Service and Secret Service to DHS, the department effectively got out of law enforcement responsibilities, said Joe Guirreri, manager of the federal security practice at Pricewaterhouse-Coopers LLP of New York, during GEIA's annual forecast conference. Treasury has had to reprioritize its missions and deal with both programmatic and funding issues arising from the formation of DHS, he said. As a result, few of Treasury's IT projects will likely move forward, Guirreri said. For instance, the department's managed services contract opportunities, including the $3 billion Treasury Communications Enterprise contract, now are more dubious. The department could elect to use a General Services Administration governmentwide acquisition contract in their place, he said.At the same time, the department is trying to maintain old systems while bringing on new ones in the face of no real budget growth, Guirreri said. "The message to industry is, we need code conversion tools and better-scalable network monitoring and security tools," he said. The department's fiscal 2004 budget for IT is $2.6 billion.A large part of the challenge at Health and Human Services, on the other hand, is the sheer size and diversity of the organization, with offices ranging from the Administration for Children and Families to the Centers for Medicare and Medicaid Services, the National Institutes of Health to the Food and Drug Administration, said Todd Pantezzi, manager of business development with NCS Pearson Inc. of Bloomington, Minn.HHS has an IT budget of $4.8 billion for fiscal 2004. Unlike Treasury, several of its projects appear to be on track, according to GEIA, including $80 million for the Centers for Disease Control and Prevention consumer information response program, a departmentwide consolidated e-mail system, and IT consolidation at the Food and Drug Administration.While the department is attempting to carry out the "One HHS" initiative, applying the President's Management Agenda to streamlining the organization, Pantezzi said that numerous high-ranking procurement executives are leaving the various HHS agencies. The depletion of experienced procurement officials is pushing HHS to use GWACs and schedules instead of generating its own contract vehicles, he said.One of the largest of all civilian agencies, Veterans Affairs has three major components -- the Veterans Benefits Administration, Veterans Health Administration and National Cemetery Administration -- and other, smaller offices.Historically, the parts of VA have been stovepipes, said Kim Flannigan, business development manager with NCS Pearson's government solutions unit. But the department is facing the same pressures to implement enterprisewide solutions as all the other agencies. While VA has a tradition of working with vendors it already knows and feels comfortable with, Flannigan said that companies going through their own restructuring, such as those resulting from mergers or acquisitions, can use their experiences to talk to the department about how to get its agencies to work together.Despite the department's size, the VA budget for IT is relatively small, just $1.5 billion. Because of its role in providing health care to veterans, the department is concerned with cybersecurity and privacy of patient records.The Justice Department's mission has been expanded to incorporate counterterrorism responsibilities, including information-sharing between components of the department and functions outside Justice, such as DHS and the intelligence communities, said Robin Gardner, manager of business development with ITS Services Inc., Springfield, Va.With $1.9 billion to spend in fiscal 2004 on IT, the Justice Department has the green light on several major initiatives, including desktop outsourcing at the Bureau of Alcohol, Tobacco, Firearms and Explosives, worth $400 million; the departmentwide unified financial management systems project, worth up to $150 million; and the Justice Management Division's Information Technology Support Services III, worth up to $475 million. *Staff Writer Patience Wait can be reached at pwait@postnewsweektech.com.