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Good news series: Homeland security state budget projections and business opportunities

Good News Series: Homeland Security State Budget Projections and Business Opportunities

By Chris Cotner, Jeff Webster, Evan Halperin, Kristin Howe, Joanna Salini, and Luke Harris.

With all of the challenges faced by businesses and government this past year, the state and local contracting community has certainly been in need of some good news. At GovWin, we strive to bring the GovCon community actionable, good news that is based upon solid data and analysis. As illustrated in a previous article, here, GovWin developed a set of statistical projection models to examine future state budget trends in the homeland security (HS) vertical. In brief, state HS budgets are projected to increase looking forward (see figure 1). The following analysis explains both the methodology and projections in some detail.

Figure 1: Homeland Security Total State Spending (Actual and Projected)

Click on image, above for full-sized version.

The Methodology

Subscribers have access to information on the projection methodology, here.

The Projections

Taking a look at figure 1, above, the projection looks even better than the previous overall state budget projection data (here).There is a downtick in FY 2011, followed by a 0.86 percent increase in FY 2012. Considering that most verticals are experiencing budgetary drops in FY 2012, this is great news! For more projection data, subscribers can see the full article, here.

As mentioned earlier, doing state-specific projections becomes more difficult with a universal model.
Simply, there are too many possible associated variables to accurately predict for each state. However, with our modeling, GovWin was able to provide a picture of projected budgets for some states. Before delving into that data, here are the actual HS budgets for states in FY 2010 – 2013 (table 1, below – subscribers have access to data on all states, here).

Table 1: State Homeland Security Budgets FY 2010-2013

Note: Subscribers have access to data on all states,
here.

State HS budget projections beyond FY 2013 were limited based upon state data variability. However, the data bore fruitful results for California, New York, Connecticut, Utah, and South Dakota. Below, figure 2 illustrates the projection data- subscribers have access to expanded data for these states, here).

Figure 2: Homeland Security State Spending (Actual and Projected)

Click on image above for full-sized version.

The data above gives some representation and basis of comparison for future state HS budgets. More specifically, states have in-process or anticipated HS IT initiatives. As part of the overall picture of state HS budgets and projections, table 3 shows HS IT budgets for the states (again, subscribers have access to data for all states, here). Again, this represents just the HS-related IT items identifiable from each state’s published budget. Below that, GovWin’s State and Local Justice and Public Safety/Homeland Security Team members offer an analysis of upcoming HS IT initiatives and projects in each of the states identified in figure 2, above.

Table 3: State Homeland Security IT Budgets FY 2010-2013

Note: Subscribers have access to an expanded table with data for all states,
here.

GovWin tracked homeland security major IT initiatives for selected states:
Note: Subscribers have access to expanded coverage for HS opportunities for these (here) and all other states, including documentation, requirements, contacts, anticipated awards, and other data.
 
California
:
The California Emergency Management Agency (CalEMA) is embarking on an effort to replace their existing Response Information Management System (RIMS) to increase functionality and comply with new federal disaster guidelines. On top of this, the California Department of Forestry and Fire Protection (CalFire) is working to replace and upgrade their All Incident Reporting System (CAIRS), which is used to collect, compile, analyze, and distribute statistical information on forest fires. California was allocated nearly $73 million for the FY 2011 Homeland Security Grant Program which is expected to be distributed across the state for response and recovery efforts. It is expected that the state will continue its’ efforts to curb human trafficking and enforce/secure the nation’s border.

Major upcoming opportunities tracked by GovWin:
GovWin Tracked California Opportunity A
: The state is planning the replacement of its Statewide Automated Fingerprint Identification System (AFIS).
GovWin Tracked California Opportunity B: The state is seeking proposals for the California All Incident Reporting System (CAIRS).
GovWin Tracked California Opportunity C: The state is evaluating proposals for the Response Information Management System (RIMS).


New York:
Many of the large government expenditures in the state of New York are focused on New York City and its five boroughs. The Metropolitan Transportation Authority (MTA) accounts for nearly $14 billion over the next three years and while much of their spending is on operations, last year the MTA began a radio system upgrade at just over $115 million. The state engaged in an attempt to build a statewide system, however, the endeavor proved too costly and riddled with issues. New York was allocated nearly $91 million for the FY 2011 Homeland Security Grant Program, which is likely to be used both in the New York City area for security efforts and upstate New York for recent hurricane and flooding disaster cleanup efforts.

Major upcoming opportunities tracked by GovWin:
GovWin Tracked New York Opportunity
A: The state is expecting to pursue bids for a DL/ID Imaging and Document Production.
GovWin Tracked New York Opportunity B: The state is expecting to pursue bids for a Law Practice Management Software.
GovWin New York Opportunity C: The state is seeking bids for a Cyber Security Managed Security Services Product.


Connecticut:
The State of Connecticut recently completed a reorganization of its Information Technology offices, changing the Department of Information Technology to the Bureau of Enterprise Systems and Technology (BEST) under the Department of Administrative Services. Connecticut Gov. Malloy recently announced an initiative to provide technology upgrades to the Department of Motor Vehicles services. The Department of Transportation (DOT) and Connecticut Transit are working on various upgrades to its software and hardware systems. Connecticut was allocated nearly $5.1 million for the FY 2011 Homeland Security Grant Program, which is likely to be used for disaster recovery efforts following the declaration of a state of emergency following Hurricane Irene.

Major upcoming opportunities tracked by GovWin:
GovWin Tracked Connecticut Opportunity A
: The state is expecting to pursue bids for an Electronic Monitoring Program for Alcohol Consumption.
GovWin Tracked Connecticut Opportunity B: The state is expecting to pursue bids for a Statewide Interoperable Radio Communications System.
GovWin Tracked Connecticut Opportunity C: The state is expecting to pursue bids for a Next Generation 911 System.
GovWin Tracked Connecticut Opportunity D: The state is expecting to pursue bids for a Computer Aided Dispatch System.


Utah:
The Utah Department of Public Safety recently reduced completion time of Utah Criminal Justice Information System FBI audits by creating a new online process and added fiber analysis to the trace evidence disciplines at the State Crime Lab. Utah was allocated $5.1 million for the FY 2011 Homeland Security Grant Program which is expected to be distributed across the state for response and recovery efforts. The state is expected to continue its efforts to improve emergency communications and equipment.

Major upcoming opportunities tracked by GovWin:
GovWin Tracked Utah Opportunity A: The state is expected to obtain equipment and upgrades for the Salt Lake Valley Emergency Communications Center.
GovWin Tracked Utah Opportunity B: The state may rebid on contracts for video detection system and components upon expiration of current contracts.
GovWin Tracked Utah Opportunity C: The state may rebid on contracts for mobile communication components upon expiration of current contracts.


South Dakota:

The state of South Dakota is pursuing homeland security initiatives through their State Emergency Operations Plan. The state currently has a Public Assistance program in place, which receives grant money from FEMA. In addition, the state uses on-line fire reporting to provide information on fire trends that are useful in identifying and preventing fires across the state. The Department of Public Safety has obtained grants through the Drivers License Security Grand Program. In FY 2010, Target Funding Allocations were $600,000. The state currently holds a 5-year $6,682,500 contract with L-1 Identity Solutions for its Driver License Identification Card program that is in effect until 2013.

GovWin South Dakota Opportunity A: The state is evaluating proposals for WSCA Police Radar, LiDAR parts and accessories.


Analyst’s Take – Jeff Webster

In its truest sense, homeland security is charged with protecting the “homeland.” As many vendors in this market know, homeland security falls under the jurisdiction of police and emergency management agencies across the country. However, at the local level, there are very few agencies charged specifically with homeland security. Thus, vendors selling into this market will need to target their efforts at state-level police, sheriff, emergency management, and if applicable homeland security departments. Some areas of focus for homeland security agencies continue to be border security, surveillance, credentialing, and port security. Products and services that improve the validating of information and identity, capturing and storing sensitive data, and improving infrastructure protection will see the greatest amount of business. Based on the FY 2011 Federal Emergency Management Agency’s (FEMA) State Homeland Security Grant (SHSP) program, a total of $526.8 million will be allocated to state governments’ homeland security efforts. Vendors should also expect this market to continue with funding through the current presidential term.

Analyst’s Take – Chris Cotner

With so many states budgets and specific verticals experiencing historic declines in 2012, the projected HS gains, at 0.86 percent show some unexpected good news. In this economy, slow or flat growth beats a loss on any day. Looking forward, slow, yet steady state budgetary gains are projected in the vertical. While largely subsidized by the feds, this slow growth and continued funding provides some stability for vendors in an otherwise turbulent GovCon market. In planning future business prospects, vendors should look not only toward state budgets, but toward the continued funding stream from Washington for cues.

While there are definite new projected business and IT opportunities in the vertical, this is a cautionary tale. First, while the overall HS budgets are improving, an individual state budget can experience sharp fluctuations from year-to-year with changing political priorities and projects. Second, FY 2012 is still a net budget loss for HS in many states, and overall for HS IT in all states. Finally, while growth is projected, with annual overall annual growth rates at just under one percent, this market cannot exactly be considered booming. Despite the advisory, and as demonstrated above, there are projected and improving state business opportunities in the homeland security market; interested vendors would do well to stay positioned in the market.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts,
here.

Follow the GovWin Justice and Public Safety Team on Twitter,
here

Follow Chris on Twitter,
here.

Follow Jeff on Twitter, here.

Visit the Homeland Security vertical profile, here

 

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