Homeland Security Dept. Details Small Business Plan The new Homeland Security Department has pledged to meet the small business contracting goals required by law, but executives of several firms told Congress they got an unfriendly reception from the department. At a hearing before the House Small Business Subcommittee on Rural Enterprise, Agriculture and Technology Oct. 21, Rep. Frank Ballance (D-NC) noted that Homeland Security Secretary Tom Ridge often talks about the need for the department to achieve “economies of scale” in purchasing. That “sounds like bundling,” Ballance remarked. DHS’s director of small and disadvantaged business utilization, Kevin Boshears, disagreed. He acknowledged that some contracts formerly issued by DHS’s 22 component agencies will be combined into department-wide awards, but added, “We believe that economies of scale do not necessarily exclude small businesses.” Boshears said the department has proposed a 23% goal for small business contracting; 5% for small disadvantaged and woman-owned businesses; and 3% for HUBZone and service-disabled-veteran-owned firms. Those are the governmentwide goals set by Congress. The department has proposed a 40% small business goal for subcontracting. He said his office has set a series of outreach sessions for vendors (See http://www.dhs.gov/interweb/assetlibrary/VOS.doc.) The department plans to establish a mentor-protégé program. DHS’s procurement forecast is posted at http://www.dhs.gov/interweb/assetlibrary/forecast2004.pdf. By law, the department has flexible procurement authority to speed the purchase of mission-critical products and services. But Boshears said DHS will, for the most part, abide by the Federal Acquisition Regulation. The department’s largest component, the Transportation Security Administration, is exempt from the FAR by law. Executives of several small firms told the subcommittee they had been snubbed by various DHS agencies. Dan Lane is CEO of EMCOM, a firm in Independence, MO, that makes an automated emergency-alert system that communicates via cell phone, pager and other electronic devices. He said the system is used by a number of state and local agencies. Lane said he met in May with officials of the Federal Emergency Management Agency, a part of DHS. He said the FEMA people told him “we were not a big company, not tested over a large network and could not be considered.” Patricia Driscoll, CEO of Frontline Defense Systems LLC of Washington, said procurement practices at DHS and the Transportation Security Administration force small firms to work as subcontractors. When working for a TSA prime, she said, “Instead of dealing with government officials, we had to pitch a very large corporation who wanted to see all of our proprietary material. That is death to a small innovative company.” That view was echoed by Tim May, CEO of Advanced Interactive Systems, a training company in Seattle. “An analysis convinced us that all roads led to teaming with large contractors if we were to have any chance of doing business in this new arena,” he testified. May said his firm worked as a subcontractor training airport screeners, but, since he was dealing with a prime, he was unable to develop fruitful contacts inside TSA.