The aftermath of 9/11 and the massive government reorganization that created the Homeland Security Department in 2003 created new opportunities for government contractors.
With many disparate security agencies centralized under one roof and a single government customer, the years since 9/11 have seen the rise of a “homeland security industry” — a marketplace of private-sector goods and services for everything from border security and disaster relief to IT solutions.
The homeland security industry, characterized as a “hidden world, growing out of control,” was notably criticized in a series of Washington Post articles in July 2010. The Post noted the widespread duplication and redundancy in homeland security and national security agencies as well as a lack of oversight.
And as budget pressures have tightened, it’s clear the market has not lived up to early predictions that it could rival the defense industry.
However, while the market has shifted, it remains “vibrant,”National Defense magazine reports, and is increasingly opening up to smaller and mid-size firms.
Below is a chart showing the biggest recipients of DHS contracting dollars in fiscal-year 2004, the first after the agency was created, and 2010, the latest for which a full fiscal-year’s data is available. (The chart shows agency contract spending and doesn’t include grants or other forms of spending. The chart was compiled from data on USASpending.gov.)
Below is a chart showing overall DHS contract spending from 2004 to 2010. (The chart was compiled from data on USASpending.gov.)