Motcb 2014 lssoe #7

1100 norLh Clebe 8oad, SulLe 1010, ArllngLon, vA 22201 | 1el: 703.224.4407 | lax: 703.224.8001 | lnfo[LhesoLergroup.com
2014 1he SoLer Croup. All 8lghLs 8eserved.
1
!"# %&'#( )(&*+
!"#$%"&'()"$ + ,-./ !#"$(0"1'2$ 3405"' + 678"9:10 ;"&4#('< =($$(71 >410(15
678"9:10 ;"&4#('< =($$(71 >410(15 #"?7410(15 @#78 @($&:9 <":# A>BC ,-.D 97E$ FFF GH" !#"$(0"1'2$ >B./
3405"' #"I4"$'$ JKDL. ?(99(71 (1 ?405"' :4'H7#('< @7# 'H" H78"9:10 $"&4#('< 8($$(71 + : .L-M (1&#":$" @#78
'H" JK,LN ?(99(71 "1:&'"0 (1 >B.N :10 .-L,M :?7)" 'H" >B.D "1:&'"0 ?405"' 7@ JOOLD ?(99(71L
!"#$%&'(#)%"
1he recenLly released 2013 resldenL's 8udgeL lncluded a summary of homeland securlLy mlsslon fundlng aL
Lhe ueparLmenL of Pomeland SecurlLy (uPS), Lhe ueparLmenL of uefense (uou), and across Lhe oLher lederal
deparLmenLs and agencles. 1hls budgeL requesL provldes lnslghL lnLo shlfLs ln securlLy prlorlLles as well as
new homeland securlLy-relaLed lnlLlaLlves and programs. 1he purpose of Lhls brlef analysls ls Lo provlde an
annual updaLe on hlgh-level Lrends ln Lhe lederal homeland securlLy markeL, parLlcularly ln relaLlon Lo four
areas: (1) LoLal lederal governmenL homeland securlLy fundlng, (2) esLlmaLed spendlng by lederal agency, (3)
budgeL auLhorlLy by homeland securlLy mlsslon area, and (4) prlvaLe secLor addressable spendlng.
+%#,- .%/0-,"& 10('$)#2 3)44)%" 5'"&)"6
1he resldenL's l?13 8udgeL requesLs $73.1 bllllon ln budgeL auLhorlLy ln supporL of Lhe homeland securlLy
mlsslon. 1hls ls a 1.0 lncrease from Lhe $72.4 bllllon provlded ln Lhe l?14 budgeL and 10.2 above Lhe
enacLed l?13 budgeL of $66.3 bllllon. 1he bulk of Lhe noLlceable lncrease ln homeland securlLy mlsslon
fundlng ln l?14 and l?13 ls aLLrlbuLable Lo Lhe currenL llrsL 8esponder neLwork AuLhorlLy (llrsLneL) efforL Lo
develop a naLlonwlde, lnLeroperable publlc safeLy broadband neLwork for flrsL responders. Lxcluslve of Lhls
addlLlonal $3.3 and $4.3 bllllon ln esLlmaLed l?14 and l?13 fundlng, respecLlvely, Lhe LoLal l?13 homeland
securlLy mlsslon budgeL requesL would be $68.6 bllllon, only 3.6 above l?13 levels.

Aslde from Lhe slzeable lncrease ln fundlng for llrsLneL wlLhln Lhe ueparLmenL of Commerce (uCC), Lhere are
several oLher noLable areas of lnLeresL ln Lhe lederal homeland securlLy markeL:
$-
$10
$20
$30
$40
$30
$60
$70
$80
l?09 l?10 l?11 l?12 l?13 (AcLual) l?14
(LnacLed)
l?13
(8equesL)
7
)
-
-
)
%
"
4

8%90$"/0"# 5)4(,- :0,$
+%#,- .%/0-,"& 10('$)#2 3)44)%" 7'&60# ;'#<%$)#2= >2 ;60"(2
CLher
uCL
SLaLe
uC!
PPS
uCC
uou
uPS
Motcb 2014 lssoe #7
1100 norLh Clebe 8oad, SulLe 1010, ArllngLon, vA 22201 | 1el: 703.224.4407 | lax: 703.224.8001 | lnfo[LhesoLergroup.com
2014 1he SoLer Croup. All 8lghLs 8eserved.
2
!"# %&'#( )(&*+
Pomeland securlLy mlsslon fundlng aL uPS ls expecLed Lo sLay flaL ln l?13 compared Lo l?14. 1he
l?13 budgeL requesL of $33.3 bllllon ls a meager 0.2 decrease from Lhe l?14 enacLed budgeL of
$33.6 bllllon. As expecLed, uPS remalns Lhe largesL agency ln Lhe lederal Pomeland SecurlLy
MarkeL, accounLlng for 48.3 of Lhe LoLal l?13 budgeL requesL.
1he Ceneral Servlces AdmlnlsLraLlon (CSA) has requesLed $316.0 mllllon Lo supporL l?13 homeland
securlLy acLlvlLles - up from $363.0 mllllon ln l?14 and [usL $36.0 mllllon ln l?13. 1he bulk of Lhls
lncrease ls aLLrlbuLable Lo Lhe lederal 8ulldlngs lund, whlch wlll conLlnue Lo supporL Lhe uPS
consolldaLlon aL SL. LllzabeLhs, new consLrucLlon aL several land porLs of enLry (e.g., San ?sldro,
Alexandrla 8ay, Calexlco), and repalrs and alLeraLlons aL varlous governmenL faclllLles.
1he SLaLe ueparLmenL's l?13 homeland securlLy mlsslon budgeL requesL of $3.3 bllllon represenLs an
lncrease of $401.3 mllllon, or 13.6, from Lhe l?14 enacLed budgeL auLhorlLy of $2.9 bllllon. 1hls
lncrease prlmarlly supporLs Lhe 8order SecurlLy rogram managed by Lhe 8ureau of Consular Affalrs.
.%/0-,"& 10('$)#2 3)44)%" ;$0,4 ,"& +$0"&4
1hls secLlon segmenLs homeland securlLy fundlng by Lhe slx prlmary mlsslon areas deflned by Lhe Cfflce of
ManagemenL and 8udgeL (CM8) and demonsLraLes how prlorlLles have shlfLed over Lhe lasL several years:

Cn a year-Lo-year basls, shlfLs ln homeland securlLy mlsslon fundlng beLween mlsslon areas have generally
been mlnlmal. Powever, when accumulaLed over more Lhan a half-decade, ad[usLmenLs ln fundlng
allocaLlons become a blL more meanlngful. lor example, Lhe $28.7 bllllon allocaLed Lo Lhe 8otJet ooJ
1toospottotloo 5ecotlty mlsslon area ln l?13 ls a 2.6 lncrease over Lhe enacLed l?14 budgeL and a 7.9
lncrease from l?10 levels, meanwhlle, LoLal budgeL auLhorlLy for Lhe homeland securlLy mlsslon area has
grown only 2.6 over Lhls same flve-year Llme perlod. 1hls has expanded 8otJet ooJ 1toospottotloo
5ecotltys share of Lhe LoLal lederal Pomeland SecurlLy markeL from 37.3 ln l?10 Lo 39.2 ln l?13.
Conversely, fundlng for Lhe ltotectloq ctltlcol loftosttoctote ooJ key Assets mlsslon area has generally
decllned over Lhe lasL flve years. ln facL, lLs share of Lhe LoLal budgeL auLhorlLy has dropped over four
$28,676
39
$22,230
31
$10,843
13
$3,380
7
$3,201
7
$764
1
5:?@ +%#,- .%/0-,"& 10('$)#2 3)44)%" 7'&60# ;'#<%$)#2= >2 3)44)%" ;$0,
AB0C'04#0&= )" D /)--)%"4E
8order and 1ransporLauon SecurlLy
roLecung Crlucal lnfrasLrucLure and key
AsseLs
Lmergency reparedness and 8esponse
uefendlng AgalnsL CaLasLrophlc 1hreaLs
uomesuc CounLerLerrorlsm
lnLelllgence and Warnlng
Motcb 2014 lssoe #7
1100 norLh Clebe 8oad, SulLe 1010, ArllngLon, vA 22201 | 1el: 703.224.4407 | lax: 703.224.8001 | lnfo[LhesoLergroup.com
2014 1he SoLer Croup. All 8lghLs 8eserved.
3
!"# %&'#( )(&*+
percenLage polnLs from 34.6 ln l?10 Lo approxlmaLely 30.4 ln l?13. noneLheless, Lhls mlsslon area flrmly
holds lLs sLaLus as Lhe second largesL homeland securlLy mlsslon area wlLh a budgeL requesL of over $22.2
bllllon ln l?13.

F$)9,#0 10(#%$ ;&&$044,>-0 1G0"&)"6
1he l?13 resldenL's 8udgeL conLlnues Lo suggesL LhaL prlvaLe secLor addressable spendlng - fundlng
avallable Lo be allocaLed Lo conLracLs for producLs and servlces from Lhe prlvaLe secLor - ls conLlnulng Lo be
crowded ouL by expendlLures ln oLher caLegorles, such as personnel compensaLlon, beneflLs, and lnLeragency
conLracLs. llve years ago, ln l?10, an esLlmaLed $29.1 bllllon, or 40.9, of LoLal homeland securlLy mlsslon
fundlng was dlrecLed Lowards conLracLual servlces and supplles, meanwhlle, ln Lhe comlng flscal year, only
$23.2 bllllon, or 34.3, ls pro[ecLed Lo be avallable Lo conLracLors - an overall decrease ln addressablllLy of
approxlmaLely 6.4 percenLage polnLs.
ln parLlcular, uPS, uou, and Lhe ueparLmenL of !usLlce (uC!), have drlven Lhls decllne ln overall prlvaLe secLor
addressablllLy of Lhe lederal Pomeland SecurlLy markeL. 1hese Lhree deparLmenLs are perennlally ln Lhe Lop
flve ln Lerms of LoLal homeland securlLy mlsslon budgeL auLhorlLy. Slnce l?10, Lhe prlvaLe secLor
addressablllLy of each of Lhelr homeland securlLy mlsslon budgeLs has fallen by more Lhan Lhe markeL
average of 6.4 percenLage polnLs. 1he reducLlons ln addressablllLy aL Lhese Lhree deparLmenLs over Lhe lasL
flve years have been 7.1, 12.1, and 9.3 percenLage polnLs, respecLlvely.
Whlle Lhls downward Lrend has perslsLed for a number of years, lL ls lnherenLly unsusLalnable, and Lhere are
some lndlcaLlons of sLablllzaLlon or even reversal. ulLlmaLely, homeland securlLy-relaLed programs and
acLlvlLles wlll need Lo conLlnue Lo procure Lhe producLs and servlces necessary Lo successfully and effecLlvely
execuLe Lhelr mlsslons.
0
10
20
30
40
30
60
70
80
90
100
l?09 l?10 l?11 l?12 l?13
(AcLual)
l?14
(LnacLed)
l?13
(8equesL)
F0$(0"# 1<,$0 %H +%#,- .%/0-,"& 10('$)#2 3)44)%" 7'&60# ;'#<%$)#2= >2 3)44)%" ;$0,
CLher
lnLelllgence and Warnlng
uomesuc CounLerLerrorlsm
uefendlng AgalnsL CaLasLrophlc 1hreaLs
Lmergency reparedness and 8esponse
roLecung Crlucal lnfrasLrucLure and key
AsseLs
8order and 1ransporLauon SecurlLy
Motcb 2014 lssoe #7
1100 norLh Clebe 8oad, SulLe 1010, ArllngLon, vA 22201 | 1el: 703.224.4407 | lax: 703.224.8001 | lnfo[LhesoLergroup.com
2014 1he SoLer Croup. All 8lghLs 8eserved.
4
!"# %&'#( )(&*+

5'#'$0 I'#-%%J
1hls budgeL analysls provldes lnslghL lnLo changes ln homeland securlLy prlorlLles and hlghllghLs some
poLenLlal areas of opporLunlLy. uesplLe early dlsappolnLmenL wlLh Lhe homeland securlLy markeL - largely
due Lo mlsallgned expecLaLlons - conLracLors cerLalnly have noL glven up on Lhe large opporLunlLy.
arLlcularly ln an envlronmenL of generally decllnlng budgeLs and lncreaslng compeLlLlon, conLracLors cannoL
afford Lo lgnore Lhese homeland securlLy-relaLed opporLunlLles. Success for lederal conLracLors wlll
lncreaslngly rely on Lhe ablllLy Lo dlsLlngulsh and undersLand Lhe macro-level developmenLs and Lrends,
ldenLlfy and prlorlLlze cusLomers, capablllLles, and areas of opporLunlLy aL a granular level, and develop Lhe
approprlaLe buslness developmenL and capLure sLraLegles Lo wln Lhose prlorlLlzed opporLunlLles.

;>%'# +<0 1%#0$ 8$%'G
1he SoLer Croup provldes servlces Lo boLh Lhe lederal governmenL and Lhe commerclal enLlLles LhaL supporL
lL. Cur Commerclal Servlces ulvlslon provldes markeL research and sLraLeglc advlsory servlces Lo commerclal
cllenLs seeklng Lo enLer or grow ln Lhe lederal governmenL securlLy markeL. !usLln 1afL, resldenL & CLC, and
eLer Wong, AssoclaLe, auLhored Lhese perspecLlves. 1he SoLer Croup welcomes Lhe opporLunlLy for our
research Lo be clLed ln Lhlrd-parLy reporLs. 1o learn more, please vlslL www.1heSoLerCroup.com and/or
emall lnfo[1heSoLerCroup.com.
kepott Motcb 2014. letspectlves - 2015 lteslJeots 8oJqet - nomelooJ 5ecotlty Mlssloo looJloq
0
3
10
13
20
23
30
33
40
43
30
$-
$10
$20
$30
$40
$30
$60
$70
$80
l?09 l?10 l?11 l?12 l?13
(AcLual)
l?14
(LnacLed)
l?13
(8equesL)
7
)
-
-
)
%
"
4

8%90$"/0"# 5)4(,- :0,$
.%/0-,"& 10('$)#2 3)44)%" 7'&60# ;'#<%$)#2 ,"& F$)9,#0 10(#%$ ;&&$044,>)-)#2
1oLal 8udgeL AuLhorlLy
rlvaLe SecLor Addressable Spendlng
rlvaLe SecLor Addressable
Note. 1be 5otet Ctoop ooolysls of tbe bomelooJ secotlty boJqet pteseoteJ lo tbls ottlcle excloJes fooJloq fot
ltoject 8lo5blelJ ooJ 8loJefeose coootetmeosotes fot cootloolty ooJ cooslsteocy octoss tbe flscol yeots. All
yeots moy locloJe botb bose ooJ sopplemeotol fooJloq. 5ome flqotes moy Jevlote ftom otbet pobllsbeJ
oombets Joe to toooJloq ettots ooJ/ot typoqtopblcol ettots lo qovetomeot boJqet Jocomeots. uevlotloos lo
fooJloq octoss flscol yeots coo be Joe to ptoqtommotlc cbooqes ooJ teJefloltloo, teevolootloo, ooJ/ot
teclosslflcotloo of bomelooJ secotlty octlvltles.