FY 2017 Federal Budget Snapshot: Department of Homeland Security

Total Discretionary Funding

The president’s budget provides $47.7B in total net discretionary budget for DHS, including $40.6B in adjusted net discretionary funding and an additional $6.7 billion for the Disaster Relief funding. The $40.6B would be a $381M (-0.9%) reduction over the FY 2016 enacted level.

Funding highlights include:

• $7.0B for the costs of 21,070 Border Patrol agents and 23,821 CBP officers and $197.5M to sustain border inspection and enforcement efforts abroad
• $5.1B for the Transportation Security Administration (TSA) for transportation screening operations to ensure the freedom and movement of people and commerce
• $292.0M for Customs and Border Protection (CBP) targeting programs, including support for the National Targeting Centers (NTC) for passengers and cargo
• $103.9M for Radiological and Nuclear Detection equipment enabling the Chemical, Biological, Radiological, Nuclear, and Explosives (CBRNE) Office and the DHS operating components
• $108.2M to enhance White House security, including support for the U.S. Secret Service’s (USSS) Operational Mission Support initiative
• $1.1B to replace aging Coast Guard cutters, aircraft, electronic systems and shore infrastructure
• $173.8M for the CPB Non-Intrusive Inspection (NII) Equipment program for passive radiation scanning and X-ray/gamma-ray imaging of cargo and conveyances
• $52.8M to fund investments focusing on expanding a replacement biometric identification system for DHS

DHS IT and New Development Budgets

To begin with, a basic slice of the DHS IT budget identifies how the department is allocating its proposed budget across its directorates. Their FY 2027 overall IT budget of $6.5B would be almost $276M (+4.4%) above the FY 2016 level of $6.2B and $565.3M (+9.6%) over the $5.9B for FY 2015. The consistent upward track of DHS’s IT budget underscores the high priority of several of its key missions and smooths out the trend of year-to-year budget variance of recent years.

The year-to-year changes for the various agencies and directorates are fairly diverse, ranging from -4% to +32%, but most receive a budget increase and almost all with decreases remain above their FY 2015 levels. (See table below.) Looking at the portion of each agency’s allocation for new development spending, known as Development, Modernization and Enhancement (DME), reveals a wide variety in change from FY 2016 to FY 2017. Further, growth or decline in an agency’s total IT budget does not always correspond to the same direction or magnitude in DME spending, e.g. the TSA, USCG, FEMA, FLETC, DNDO, and others. DHS also bucks the general trend of DME declining as an overall proportion of an agency’s IT budget.

Noteworthy IT Programs

Examining the details of DHS’s IT investments and initiatives gives deeper insight. Here are just five initiatives that stand out among others due to relative size, budget growth, and/or proportion of new development spending.

• NPPD National Cybersecurity & Protection System (NCPS) – The National Cyber Security Division, through its National Cybersecurity Protection System (NCPS), protects the Federal civilian departments and agencies IT infrastructure from cyber threats. At $472.4M (+2.7) for FY 2017, NCPS becomes DHS’s largest single IT budget line in the new fiscal year and is up $113.4M (+31.6%) from FY 2015. Further, 18.4% of this investment is slated for DME.
• CBP Infrastructure – This IT infrastructure program is the backbone that supports all of CBP's IT systems and is the second largest budget line item among DHS’s 341 IT investments. The FY 2017 total allocation of $452M, up $16.1M from the FY 2016 enacted level and $113.4M over FY 2015. This investment is 100% O&M spending.
• Continuous Diagnostics and Mitigation (CDM) – This NPPD program provides continuous monitoring, diagnosis, and mitigation activities to strengthen the security posture of the federal .gov networks. DHS will oversee the procurement, operations, maintenance of sensors/dashboards deployed to agencies. Set at $276.0M for FY 2017, CDM receives one of the largest budget increases in FY 2017 of $173.3M (+168.8%), and $273 (98.9%) of that total is targeted for DME.
• Automated Biometric Identification System (IDENT) – The CBP IDENT system stores over 182M separate and distinct identities and averages nearly 300K transactions daily and is expected to increase. At $238.3M for FY 2017 it receives a $20.3M (+3.7%) increase from last year and consists of 24.5% DME funds.
• USCIS Transformation – USCIS has embarked on a multi-year enterprise-wide Transformation Investment that is transitioning the agency from a fragmented, paper-based environment to a paperless, centralized environment, utilizing electronic processing for adjudication. At $173.5M for FY 2017, this investment is another of DHS’s “top ten” largest IT investments but sees a slight $2.2M (-1.3%) budget trim from FY 2016 as more of the effort moves into O&M activities. Still, $137.5M (79.2%) of the FY 2017 funds are for DME.
• Next Generation Networks Priority Services (NGN-PS) – This NPPD program is to transition Priority Telecommunication Services from circuit-switched technologies to Internet Protocol packet-switched technologies and to examine the prioritization of other packet-based communication technologies. At $88.6M for FY 2017, this initiative receives a $9.4M (+11.8%) increase from FY 2016 and is up $36.4M (+69.6%) over FY 2015. NGN-PS is the largest among very few (much smaller) DHS IT initiatives with 100% DME for FY 2017.

After watching the total DHS IT budget decline slightly from FY 2014 to FY 2015 from $6.0B to $5.9B (-1%), we are observing a +5% rebound in FY 2016 and a planned 4.4% growth into FY 2017. That equates to nearly a 10% increase from FY 2015 to FY 2017. Further, overall DME spending for FY 2016 is up 13% from the FY 2015 and then another +5.9% for FY 2017. That’s nearly a 20% bump from FY 2015, revealing that high-priority development programs may present new business opportunities in key investment areas.