DHS could see IT cuts, despite extra Katrina funds

Other federal agencies may soon face similar cutbacks, says one research firm

Despite $62 billion in new federal spending to deal with the aftermath of Hurricane Katrina, IT spending at the Department of Homeland Security (DHS) could wind up being cut as President Bush looks to halve the deficit by 2009, according to a report from federal market research firm Input.

Very little of the billions of extra dollars being allocated for Hurricane Katrina recovery efforts is being used to improve the agency's IT infrastructure, said Payton Smith, author of the report by Reston, Va.-based Input. The DHS now oversees the Federal Emergency Management Agency (FEMA), which is leading the post-Katrina efforts.

"It's not like after 9/11, when the threats against the homeland led to an immediate push for better information sharing, including IT," said Smith. With FEMA, "it's more of a management issue than a technology issue."

That's despite the criticism of FEMA's IT systems that was compiled before the late-August hurricane devastated the Gulf Coast. A Government Accountability Office report released earlier this month that was prepared before Hurricane Katrina hit said that FEMA's IT systems repeatedly failed during four major hurricanes in 2004.

Those issues included e-mail server space that filled up repeatedly as messages and reports streamed from state and local emergency centers, and workers who were kicked off systems and had to revert to paper-based processes.

The DHS was budgeted $4.4 billion for IT in the last fiscal year, which ended Sept. 30, said Smith. Scott Charbo, the new CIO at the DHS, increased his request for IT funds in the current fiscal-year budget to $5.6 billion. But that budget has not yet been approved by Congress.

Charbo, who was CIO of the Department of Agriculture until his appointment at DHS in July, did not return calls to comment.

The shifting of money away from IT projects may not affect the DHS alone. Smith says he expects IT budgets at a number of federal agencies to be slashed starting in 2007 and 2008, as President Bush tries to meet his goal of cutting the federal deficit in half by 2009. The deficit in 2004 was $521 billion. Smith compared a boom in federal IT spending that began in 1999 -- when agencies were scrambling to deal with Y2k issues -- and continued after the 9/11 attacks, to the current real estate market.

"I can't see these growth spurts going on forever," he said.

The DHS is now consolidating how it buys services and products from vendors into two major programs -- one called the Enterprise Acquisition Gateway for Leading Edge, or EAGLE, and another smaller one called First Source -- that could make up to $48 billion in purchases over the next decade. The goal is to save money and also help ensure interoperability of systems, a lingering problem following the creations of the DHS from the merger of 22 separate agencies.

Smith said that despite the combined potential of those contracts, the expected federal belt-tightening could mean that not all of those dollars will be awarded.

"Some contracts hit their ceiling values. And some never hit 10% of that," he said.

Copyright © 2005 IDG Communications, Inc.

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