Giving Homeland Security a Reality Check
In case you haven’t noticed, I am the type of person who likes to paint an accurate, down-to-earth picture of things rather than an idealized, pie-in-the-sky image. It takes hard, proven facts to convince me, which is why I am so skeptical about the now-overused term Homeland Security.
There’s been no shortage of generic headlines, such as “Homeland Security Spending Could Reach $98 Billion!” or “Feds Set Aside $58 Billion for Security Measures,” that proclaim a seemingly bottomless well of money funneling into security. Often these stories include comments from an unknown, self-proclaimed “government security consultant” with a company name like “IncuTek Inc.” or something similar.
Come on! Let’s get real! It’s time to look at the real world as we know it. Most of the federal money has been earmarked for updating our military and I predict defense contractors will see the majority of those funds. Our transportation ports, utilities and other key infrastructure areas will be physically protected by adding manpower. Police and fire officials will get funding for up-to-date radio communication and HAZMAT equipment.
Exactly how much money will trickle down to traditional electronic security manufacturers and installers is entirely unknown. And, if large amounts of cash do come our way, how prepared are we as an industry to meet federal government demands and standards?
First, it is a fact that most commercial installing dealer/integrators in our industry have little experience working within the political framework of the federal government. The majority of electronic security installers have enjoyed referral-based business – predominantly from private companies/corporations and, to a lesser degree, local government – for quite some time. Federal government business is usually done by “request for bid” (RFB) or “request for quote” (RFQ).
I estimate that less than 10 percent of our industry’s total installer population have the capabilities to meet federal guidelines; the question is not technical capabilities, but financial. Most federal projects take between one and three years or more from initial contract to completion, Greg Ibarra of Digitron Inc., a Denver-based systems integrator specializing in government work, shared with me.
“The finances of your business must be closely managed, because during the design and/or bid phase, it could take two employees a week or more to prepare a bid properly,” says Ibarra. “Blueprints and plans must be purchased, a personal site survey may be requested, insurance and bonding issues are to be contended with as well. In the meantime, you’re paying all the expenses! And, to top it off – you’re still not guaranteed you’ll be awarded the project!”
Still interested in federal government work? This is not intended to discourage you, but I believe it is imperative that your expectations are realistic.
The truth is that, if you develop a strong business plan with solid financial backing and surround yourself with knowledgeable people, this elite market segment can be very rewarding. Just don’t expect to jump right in overnight. Even with optimal planning, it can still take a business more than three years to establish itself within the government community before completing its first project.
Federal government contracting is similar to farming. A farmer spends all of his or her money and time on plowing, seeding, fertilizing and spraying the fields. There is not a nickel to be made until after the harvest is collected, sent to the wholesaler and finally paid for a few months later. That is why most farmers cultivate a variety of crops with different harvest cycles.
In order to succeed, your business must be structured to do a variety of government jobs, from upgrades to full-blown enterprise systems. I’m sure you will find this month’s issue, especially Scott Goldfine’s cover story, packed with vital information to help you decide whether to enter into or expand your involvement in government contracting.
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