Homeland security gets shortchanged

Homeland security funding for state and local governments

FY 2002FY 2003FY 2004*
Health and Human Services$1 billion $1.5 billion$1.5 billion
Department of Justice$3.4 billion$3.2 billion$1 billion
Federal Emergency Management Agency$7.3 billion$1.8 billionN/A
Department of Homeland SecurityN/AN/A$5.5 billion
Total$11.7 billion$6.5 billion$8 billion

*Proposed
Health and Human Services funding includes Centers for Disease Control and Prevention grants to increase state
and local capacity and hospital preparedness funds. Department of Justice funding includes counterterrorism grants
and public safety funds. Federal Emergency Management Agency funding includes disaster relief and emergency
management planning and assistance funding. Department of Homeland Security funding includes Office of Domestic
Relief and disaster relief funding.Source: National Governors Association

Washington Technology's 2003 Who's Who in the state and local market

Governors and mayors have been complaining for months that Congress isn't providing enough federal money to pay for first responders and other homeland security needs -- and President Bush agrees.

In a speech to governors last month, President Bush criticized lawmakers for not providing the $3.5 billion he requested for first responders in the fiscal 2003 budget.

"They not only reduced the budget that we asked for," Bush said of the spending bill approved by lawmakers in January, "they earmarked a lot of the money."

The fallout extends to the IT community, where homeland security projects are likely to be few and far between and of small dollar value, according to industry officials.

"Homeland security is no bonanza for [state and local] IT," said Ray Bjorklund, vice president of consulting services for the market research firm Federal Sources Inc., McLean, Va.

The president's 2003 budget promised $3.5 billion for new first-responder grants to be overseen by the Federal Emergency Management Agency. But in the bill approved by Congress, only a fraction of the money is actually new funding, according to an analysis by the National Governors Association of Washington. Most of the funds come from older programs that either have been eliminated or consolidated, or whose scope has been broadened to include homeland security, the association said.

For example, already established programs, such as Community Oriented Policing Services, Edward Byrne Memorial State and Local Law Enforcement Assistance Formula Grant Program and Local Law Enforcement Block Grant program, are included as first-responder grants.

"There's not much joy in Muddville," said Frank Shafroth, director of the NGA's Office of State-Federal Relations, of the governors' reaction to the funding scheme.

In 2004, Bush calls for an additional $3.5 billion for the new Department of Homeland Security's Office of Domestic Preparedness to distribute to state and local governments. But the NGA said the administration's budget consolidates several public safety programs into new Justice Assistance Grants, and, in so doing, slices public safety grants to states in half.

Although state and local governments have focused much of their attention on the $3.5 billion aid packages, the amount of federal homeland security funding targeted for the states is actually much greater, according to the NGA study. When all homeland security related funding is taken into account -- including programs in the Federal Emergency Management Agency and the departments of Justice and Health and Human Services -- the amount of homeland security funding requested by the administration in fiscal 2003 was $8.4 billion. But Congress approved only $6.5 billion of that amount.

This is a significant decline from the $11.7 billion provided to state and local governments for homeland security in 2002.

The governors' association said President Bush, despite his criticism of Congress, is looking to cut, consolidate or eliminate some homeland security programs in the 2004 budget, which includes nearly $8 billion in various grants and programs for state and local governments.

"The president's fiscal year 2004 budget calls for major cuts in public safety grants to the states," the NGA study said. "As the [appropriations] bills take shape over the summer, there will be a struggle to see whether the justice and emergency management programs the president hopes to eliminate have enough congressional support to survive."

Industry officials are watching the process closely to determine how homeland security funds will be spent. While a substantial block of the federal funding will go toward the purchase of equipment for first responders, some funding may go to interoperable wireless systems and information sharing systems, according to analysts and company officials.

Todd Ramsey, general manager of global government industry for IBM Corp., Armonk, N.Y., said the federal government will have to fund more specific pilot projects and provide enough money to build and deploy entire systems, whether for interoperable communications or data sharing. If these pilots were done using open systems, then the approach could be transferred elsewhere, he said.

State and local government are wise not to spend too much of their own funds until they know how much the federal government will provide to them, said John Engler, president of state and local government for EDS Corp. of Plano, Texas.

There is also the ongoing problem of a lack of standards and guidance from the federal government for such systems.

"We still don't have sufficient clarity from the federal government on what the standards will be for those systems," Engler said.

Referring to domestic homeland security projects under way, Engler said that some state and local governments "have been courageous making those investments without knowing what the standards will be."

The type of procurement process a jurisdiction has in place will have a bearing on its ability to field such systems, said John Kost, vice president of market research firm Gartner Inc., Stamford, Conn. If the 2003 funding gets into the hands of state and local governments quickly, it should make a difference in jurisdictions with procurement processes that enable a fast turnaround on projects, he said.

"Unfortunately, too many jurisdictions have antiquated processes that won't let them finish the process in order to spend the money in that short [a period] of time," Kost said.

Several key wireless interoperability and information sharing projects in development offer the promise of similar work to come in the months and years ahead.

On the wireless interoperability front, IBM won a $20 million project last year to provide a public safety and data communications network for the Washington metropolitan area. The Capital Wireless Integrated Network, or CapWIN, is designed to provide first responders wireless access to multiple government data sources during critical incidents.

Several criminal justice and public safety projects begun in Pennsylvania by Homeland Security Director Tom Ridge, when he was the state's governor, are receiving national attention.

BearingPoint Inc. is the prime contractor on the 5-year-old Pennsylvania Justice Information Network project. This project has netted the McLean, Va., company about $30 million to date.

Blame game goes back and forth on funding cuts to states

Deloitte Consulting is the prime on the National Electronic Disease Surveillance System for which the firm has earned about $10 million, according to the companies. And EDS is the prime contractor on the Pennsylvania Uniform Crime Reporting System. The company declined to disclose the value of the deal.

More of these kinds of projects are likely to occur, but not in huge numbers, according to industry officials. But if another terrorist attack occurred within the United States, then funding for these projects would happen overnight.

"If we have another incident, then things will happen pretty quickly," Ramsey said. *

Staff Writer William Welsh can be reached at wwelsh@postnewsweektech.com.

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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