$5 billion in contracts: Amount made up an eighth of Homeland Security

The Albuquerque Tribune July 07, 2004

$5 billion in contracts: Amount made up an eighth of Homeland Security costs in first year

The Homeland Security Department has become a major source of work for private contractors. In this two-part series, The Tribune examines how the money was spent and where it went.

By Thomas Hargrove

The Department of Homeland Security during its first year of operation paid private contractors at least $5 billion to make America safer from terrorist attack.

The nation's newest and third-largest federal department signed more than 18,000 contracts for an astonishing array of goods and services, ranging from almost $800 million on airport bomb-detection devices to $14.8 million on hotel rooms.

Many of these contracts were signed during a crisislike atmosphere after the Sept. 11, 2001, terrorist attacks, according to the private contractors who filled the orders.

The agency has spent money in all 50 states, the District of Columbia and five U.S. territories, according to a study by Scripps Howard News Service of recently released federal files. The information from the General Services Administration provides America's first detailed glimpse into the department's day-to-day operations.

The $5 billion in contracts was about one-eighth of the department's $38 billion expenditure.

New Mexico drew nearly $17 million of that total - the lion's share of which went to the Federal Law Enforcement Training Center in Artesia.

WHAT IT BOUGHT

Here are the top 10 ways the Department of Homeland Security spent money during its first year, grouped by the General Services Administration's expenditure categories.

Miscellaneous alarm and security systems: $792 million

Other administrative support services: $767.9 million

Radio navigation equipment: $431 million

Services (basic): $264.8 million

Guard services equipment: $256.5 million

Other automated data processing: $175.6 million

Other professional services: $149 million

Data processing development: $123.5 million

Data processing backup and security: $122.9 million

Aircraft component maintenance and repair: $92.3 million

Source: Scripps Howard News Service study of the General Services Administration's federal procurement database

John Pike, director of Globalsecurity.org, a nonpartisan research organization, said the department's accounting leaves questions hanging.

"It's very difficult to understand how Homeland Security is spending money," he said. "Their publicly released budget information is incoherent. I like to call it a budgetlike object."

Homeland Security Secretary Tom Ridge, while appearing before the 9-11 commission in May, said his department's mission "is about the integration of people and technology to make us smarter, safer, more sophisticated and better protected."

Certainly the technology acquisitions by Ridge's staff have been enormous.

The largest category of expenditure by Homeland Security was at least $792 million for chemical-detection and automated alarm systems, according to the Scripps Howard study. The largest payment made by Homeland Security officials last year was $294 million to Boeing Service Co., part of a multiyear, $2 billion commitment to install and maintain thousands of explosive-detection systems and chemical-trace detectors in 443 airports.

"That contract was let in June of 2002 to install about 6,000 machines," said Greg Deiter, chief engineer at Boeing's Airport Security Program in Richardson, Texas. "There had been an original plan (before the Sept. 11 attacks) to have deployments of systems like these over a six- to nine-year period. We were able to do this in about 180 days.

"We brought a lot of resources to bear. Peak employment in this program was about 30,000 people. We even employed every truck that was available for rent on Christmas Day 2002 for equipment deliveries."

Homeland Security's second-largest payment was a $276 million check to Pearson Government Solutions of Arlington, Va., part of a $700 million contract to hire and screen 64,000 Transportation Security Administration employees who screen baggage and check passengers at major airports.

"There certainly was a lot of pressure to federalize that work force in a very compressed time period," said Pearson Vice President David Hakensen. "We did the hiring in about 100 days. TSA said it was the largest hiring effort by the federal government since World War II."

Homeland Security last year paid at least $256.5 million in 1,609 contracts or amendments to contracts to hire what the GSA described as "security guards and patrol services" at hundreds of federal and private plants and installations.

"This was something that happened throughout America. There are rent-a-cops everywhere now," Pike said.

The shuffling of federal personnel after the 2001 terrorist attacks also prompted Homeland Security officials to sign nearly 700 contracts with individual hotels to provide temporary living quarters. The largest hotel order was a $480,000 payment to the 160-room Holiday Inn Park Central of Port Arthur, Texas.

"That was for the Coast Guard. They all came here right after 9-11, about 100 of them or so," said Phyllis Montis, the Holiday Inn's manager. "They were involved in security and would go out to meet all of the ships before they came into the port. But they've all gone now. They've all rented apartments around here."

The federal department also bought $13 million in small-caliber ammunition, much of it from the Federal Cartridge Co. of Anoka, Minn.

"We are the largest supplier of small-caliber ammunition to the federal government, and the volume that we manufacture is going up dramatically," said manufacturer spokesman Bryce Hallowell.

BUDGET GROWTH

Spending authorizations for the Department of Homeland Security, by fiscal year:

2001: $19.7 billion (combined 22 departments that formed the department in 2003)

2003: $31.2 billion (first year of operations)

2004: $36.5 billion

2005: $40.2 billion (Bush administration request)

Source: The White House

Four years ago, Federal Cartridge produced 350 million rounds of ammunition. This year it expects to manufacture 1.2 billion rounds and expects to produce 1.5 billion next year. But the needs of Homeland Security's armed agents are responsible for only a fraction of the boom in bullet production, Hallowell said.

"It's called the 'Jessica Lynch effect.' Troops who were once not considered to be front-line now need to be qualified riflemen," he said. "The Army has gone through a change in doctrine so that every soldier must qualify for small-caliber arms regularly."

Even U.S. territories like Puerto Rico and Guam have become sites of Homeland Security contract work.

More than half the money is being spent in the area around the nation's capital, with $1.3 billion spent in Virginia, $1.1 billion in the District of Columbia and $219.7 million in Maryland.

Other states, especially those along the Mexican border or areas with sensitive federal facilities, also are receiving considerable amounts of Homeland Security expenditures, led by Texas at $866.4 million, California at $277.6 million and Washington state at $104.7 million.

***

Here are the number of contracts signed by the Department of Homeland Security from Oct. 1, 2002, through Sept. 30, 2003, for work or goods to be produced in each state and the dollar value of the contracts.

WHERE IT WENT
State	Number of contracts	Value
Alabama	220	$24.3 million
Alaska	501	$49.4 million
Arizona	139	$97 million
Arkansas	4	$133,052
California	1,430	$277.6 million
Colorado	277	$26.8 million
Connecticut	393	$46.4 million
D.C.	1,458	$1.14 billion
Delaware	18	$1.6 million
Florida	819	$72.7 million
Georgia	1,284	$89.8 million
Hawaii	194	$22.3 million
Idaho	909	$19.4 million
Illinois	234	$17.5 million
Indiana	70	$6.9 million
Iowa	110	$26 million
Kansas	83	$9.4 million
Kentucky	89	$8.4 million
Louisiana	262	$25.9 million
Maine	118	$6 million
Maryland	1,069	$219.7 million
Massachusetts	407	$29.6 million
Michigan	230	$25,698,867
Minnesota	77	$10.9 million
Mississippi	66	$64.9 million
Missouri	56	$6.3 million
Montana	40	$2.9 million
Nebraska	9	$681,714
Nevada	12	$839,919
New Hampshire	33	$4 million
New Jersey	436	$42 million
New Mexico	125	$16.6 million
New York	600	$89.7 million
North Carolina	428	$37.3 million
North Dakota	22	$4 million
Ohio	108	$53.8 million
Oklahoma	16	$1.5 million
Oregon	226	$10.5 million
Pennsylvania	238	$22.7 million
Rhode Island	49	$1.5 million
South Carolina	112	$12.2 million
South Dakota	8	$423,051
Tennessee	186	$34.6 million
Texas	1,455	$866.4 million
Utah	32	$3.4 million
Vermont	25	$2.1 million
Virginia	2,344	$1.32 billion
Washington	747	$104.7 million
West Virginia	110	$6.5 million
Wisconsin	87	$17.2 million
Wyoming	19	$1.94 million
U.S. territories	161	$19.1 million

Source: Scripps Howard News Service analysis of the federal procurement database maintained by the General Services Administration.

GlobalSecurity.org In the News

$5 billion in contracts: Amount made up an eighth of Homeland Security costs in first year

The Homeland Security Department has become a major source of work for private contractors. In this two-part series, The Tribune examines how the money was spent and where it went.