Homeland Security spending - it could reach $98 billion

Wednesday, January 1, 2003

Publisher, Security Systems News

I spoke recently in New York at Securing New Ground, a conference designed to look at the current issues facing the security marketplace. This year’s conference addressed Homeland Security issues, a particularly relevant subject given that as we were speaking, Congress was voting on whether or not we would have an Office of Homeland Security and what that would be. My topic was to discuss vendor opportunity within this marketplace. I though I might share what I said with you, and a few other thoughts, as well.

According to the Technology & Homeland Security Summit’s Intelligence Study, done by Tim Rhodes, chief executive officer of Provizio, President Bush has asked for $37.7 billion in Homeland Security spending for 2003. This money is to be spent on first response, defending against bio-terrorism, securing our borders and using 21st century technology.

This report states that “security dominates the minds of every government official.”

Currently, there are daily debates over who will allocate this $37.7 billion, what Congress will actually approve for spending, and how and where it will be spent. These are all under consideration every day now. Regardless of what’s approved, these expenditures are earmarked to be divided between federal, state and local governments and their agencies to be spent on security applications.

The difficulties being faced here are that there’s no procurement system in place, different departments need different products and systems and different sized groups have diversely different needs and no one system will solve the problem.

These needs span from the Department of Defense to the Department of Transportation to the Department of Justice and everything in between, and on the federal, state and local levels, as well. The buying will be managed by multiple agencies. And the words coined in this report for the buying process are, “It’s going to be a dog-eat-dog environment out there, or a feeding frenzy.”

And although buying will be disorganized, it does allow for businesses of all sizes to have access to procurement processes. You simply need to find your niche, where your specialties are and target these opportunities. But be aware that the planning and buying process may be long and complicated and perhaps even quite costly.

With the anticipated $37.7 billion in spending expected from the federal government, it’s also expected that the private sector will allocate or spend an additional $45.9 billion on products and services. And with this the states and local government will add some of their own money to this pot making the total expenditures on security products and systems somewhere between $98 to $114 billion.

This report does not qualify the time frame in which all of this money will actually be spent. And certainly no one can predict what external issues could effect this spending…things like war, further terrorist attacks or economic constraints. But clearly there’s significant opportunity for all, at all levels of the buying process.

I’ve personally spoken with many manufacturers and integrators who are already servicing accounts in aviation, military, water systems and nuclear power facilities - and this is all before any of the anticipated dollars have begun to flow.

This report goes on to discuss ways to position yourself to secure business in your buying sectors. They suggest that you join task forces - which some manufacturers, integrators and associations have already done. And to join task forces in every level of government, from the national to the local levels. You may also want to join them in all segments of the buying process where you want to do business or have the competence to serve the buyers. And lastly, offer best-of-breed products and systems, or tried-and-true solutions.

The report suggested that you take the anxiety out of the buy.

You have the great fortune of being a part of a growing industry in slowed economic times. I might even say that you have the responsibility to go out and educate, direct and lead the buying public…and in doing so reap the rewards of profit. The safety of our schools, hospitals, water and transportation systems, food, and natural resources lies in your hands.

Yes, the dollars that many of us anticipated to be spent this year may have been slower to come than we might have expected. We’re dealing with the government and legislative systems, but security directors are looking at short and long-term projects here, as well. Good security plans need to be designed and that takes time. The right amounts of money need to be allocated, and with this it needs to be decided what will be implemented right away and what will be implemented in the second, third and forth stages of these comprehensive projects.

The security industry faces significant expansion, in both the government and the private sector. And with this, there will be an expansion in who is providing these services. New companies are forming, existing companies are expanding, and companies from other industries are entering our market. But no one is better skilled, more knowledgeable, or capable then the existing channel to take on the challenges that lay before us.

I wish you all great success and we here at Security Systems News look forward to hearing about, and reporting on, all the things you’re doing.

If you’d like to learn more about the Securing New Ground conference or review some of the other speeches that were made there, log onto www.securingnewground.com.