Fed grants fortify weak state and local spending

With funding still unsteady for new state and local technology projects, contractors are focusing on opportunities fueled by federal grants, especially for homeland security and public safety. Twenty-six federal agencies and departments earmarked about $384 billion in grant money for state and local governments in 2003, with about $18 billion slated for IT products and services, according to market research firm Input Inc., Reston, Va. About three-quarters of that IT funding will go to homeland security and public safety agencies, making these the two hottest areas for state and local grants. Overall federal grant spending is expected to rise to $482 billion in 2008, according to Input.Nearly 60 government IT contractors gathered April 7 for a grants seminar hosted by Input in Falls Church, Va., to learn about major changes in the grant process, restrictions on federal funds and best practices for obtaining grants. Many state and local governments don't fully understand the grant process nor have the technical expertise to successfully apply for them, Kevin Plexico, Input's executive vice president, told Technology companies that help jurisdictions secure grants can carve out contracting opportunities for themselves when the grant is awarded, he said. "You don't want to watch jurisdictions receive a grant on their own, because then it might be too late to work with them on the project," he said.Contractors trying to grasp the nuances of the new homeland security grants find themselves in the midst of a national debate over whether conventional formula grant mechanisms are the best way to award homeland security grants.Most Homeland Security Department grants are formula grants, which are distributed by the federal government based on population and other data. Under the state and local homeland security grant program, states receiving the money must pass along 80 percent of the funds or equivalent resources to local governments for first-responder needs.Critics of the formula grant process in Congress and at the local government level believe the funds should be distributed based on the level of threat rather than population. They also question whether states are passing along the money they get from formula grants to local governments quickly enough. One solution is to provide more funding for urban-area security initiatives. Congress is expected to provide the bulk of first-responder funding directly to high-threat urban areas in fiscal 2005, said Mark Dozier, branch chief for the eastern division with the State and Local Operations Directorate in DHS' Office of Domestic Preparedness, who spoke at the seminar.French Caldwell, vice president and research director of global public policy with Stamford, Conn.-based research firm Gartner Inc., who also follows federal funding for homeland security, told Washington Technology that local governments must cope with the perennial problem of the restrictions that accompany federal grants.Local governments want guidance from the federal government related to the areas where they receive grants, but they also want the flexibility to develop creative homeland security solutions that push the envelope. "It's a tough situation to mediate," Caldwell said. "No matter which way you go, there is not a satisfactory solution."Dozier said contractors should contact individual state administrative agencies to track and pursue homeland security grant opportunities. Each state or territory has appointed a contact to manage preparedness and first-responder grants.These offices, in turn, award subgrants to local governments. They also designate a representative to administer local programs inside the state.Beverly Browning, a grant writer with BBA Inc., Mesa, Ariz., said that government contractors should help smaller cities and counties to partner with larger cities and counties in their regions to obtain federal funding. The smaller cities and counties "are just going to flounder on their own," she said. Dozier identified several trends in homeland security grants:"We're still taking baby steps toward certification and standards," Dozier said. "We see [homeland security] technology as being more regional than national in approach."Staff writer William Welsh can be reached at wwelsh@postnewsweektech.com.