Homeland Security & Defense

Business Opportunities for European Firms Selling to the United States Government during the Administration of President Obama

The United States Government purchases billions of dollars in goods and services every year from both domestic and non-U.S. firms.  The Department of Defense (DOD) and Department of Homeland Security (DHS) are both large consumers, but almost every U.S. Government Agency purchases from firms based outside the United States.  There is a sophisticated series of procurement offices within both DOD and DHS, with procurement officers responsible by industry, product and service.  Most sales opportunities will be identifiable through the internet as well as on the web sites of the relevant Department (see below). 

U.S. law and procurement regulations are detailed and specific, giving priority to organizations such as U.S. firms, minority enterprises, and firms owned by disabled veterans.  Nevertheless, price, performance, and technology improvements are major factors in procurement and leave open ample opportunity for non-US firms with leading technology, products and services.

In U.S. Government procurement, especially now in a new administration under President Obama, priorities are changing in terms of procurement needs.  With a strong focus on “Climate Change” and protecting the environment, a “greening” of the military in terms of products sought is taking place, focusing on lighter, more fuel efficient vehicles, and increased reliance on alternative energies for various military systems.  In DHS, terrorists threats to the security of the United States have opened up additional needs for sourcing ranging from more sophisticated IT/electronic recognition systems to defensive systems to prevent different types of public hazards or terrorist threats.  Port security, container security, and recognition technology are all growth areas.

Department of Defense (DOD)

Within DOD, procurement is organized according to the military service:  generally, Army, Navy, Marines, and Air Force.  What is less known is the separate budgeting authority of the 54 National Guards with significant purchasing that come under the authority of the 50 U.S. states plus 4 additional entities!   The U.S. military purchases everything from weapons systems to toothbrushes.  The 2010 DOD budget includes $553.8 billion for regular operations. 

Potential for sales examples to DOD for the future include: 

The market area referred to as Command, Control, Communications, Computers, Intelligence Surveillance and Reconnaissance (C4ISR) provides some of the greatest opportunities for company growth. C4ISR includes secure information collection and dissemination systems as well as command and control networks. Secretary of Defense Robert Gates maintains the importance of this technology, which is made evident in the more than $28 billion allocated to the development and modification of 20 airborne ISR systems over the course of the next seven years.

Another growing sector for federal government purchasing is that of performance materials, including composites for military vehicles, metamaterials necessary for stealth operations, and “multi-functional materials” for clothing. It was reported that for FY08 the Defense Supply Center Philadelphia spent roughly $2.2 billion on clothing; by FY09 it is expected that this expense will grow to $2.8 billion. Between 2010 and 2015 the area of ground vehicle armor has the potential to be a $3 billion opportunity for companies involved in non-metal performance materials.  For companies specializing in metamaterials, such as plasma and electromagnetic fields, the Department of Defense’s FY09 budget calls for $35 million to be put towards research in this field.

Because of the wear and tear on military vehicles due to military actions in Iraq and Afghanistan, parts replacement and refurbishment for ground and aircraft vehicles are needed.  This purchasing program is known as “Reset.”   The U.S. Army and Marines predict RESET costs will total $13 billion and $5 billion respectively for as long as military operations in Iraq and Afghanistan continue, and for up to three years afterward.

Department of Homeland Security (DHS)

Within DHS, procurement is organized differently by individual sub-agencies Department-wide.  Entities include:  Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE) and the U.S. Coast Guard (USCG) that all have different procurement practices and infrastructures.  The DHS budget for 2010 is $200 billion.

Potential future sales to DHS include:

The aforementioned C4ISR technologies desired by the Department of Defense see potential crossover in the Department of Homeland Security. With an ever growing dependency on cyber technology and an alarmingly increasing number of “cyber-intrusions” the demand for cyber security is great on the part of the United States federal government. Companies specializing in the computer, programming and software engineering fields have a large window of opportunity in this area with the U.S. government. The wide variety of technologies encompassed in this field provides business opportunities for many of the individual sub-agencies that exist department-wide.

DHS has begun purchasing more products and solutions from international companies.  Mid to large sub-contracts are provided by U.S. affiliates of European firms.  Of the top 20 DHS contractors, four are foreign owned:  Siemens AG $119 million; EADS – American Eurocopter $100 million (also aircraft sales to the U.S. Coast Guard; Israel Aerospace Industries (IAI) is a major partner with Boeing on a $2 billion Secure boarder initiative.

American Recovery and Reinvestment Act (“Stimulus Package” of $787 Billion)

The American Recovery and Reinvestment Act, commonly referred to as “The Stimulus Package,” was created in an attempt to revive the U.S. economy in a time of economic recession. The act is worth $787 billion and includes spending in the areas of education, social welfare programs, infrastructure, energy, tax cuts, and unemployment benefits. $29.5 billion have been allocated for investment into governmental vehicles and facilities.  This includes: a target of new insulation for 70 percent of all federal government buildings; $300 million to purchase electric vehicles for the federal vehicle fleet as well as $4.2 billion to update the Defense Department facilities and $4.6 billion for the Army Corps of Engineers for work in the areas of environmental restoration, flood protection and other infrastructure projects. Investment into green energy sources is a major aspect of this bill; an additional $61.3 billion has been directed into the energy sector in an attempt to make the federal government and military more “green” through a $2.5 billion allotment towards energy efficiency research. By signing the American Recovery and Reinvestment Act into law, a number of opportunities exist for non-US companies to sell to the U.S. Government.

Buy American

As European firms encounter U.S. Government market opportunities, they must be aware and knowledgeable of the “Buy American” provisions that require 51 percent local content in most cases.  There are various strategies by European firms to meet this requirement, such as establishing production in the United States, partnering with a U.S. firm and/or buying an existing U.S. firm.  Finding a U.S. partner and the right location for production within the United States are another set of issues and strategies that senior leadership of European firms must keep in mind.  The technology transfer and export control requirements must be anticipated by firms that are producing in the United States and successful selling to the US Government.

Links for Sales to the U.S. Government

Federal Business Opportunities http://www.fbo.gov/index....

How to Sell to the Government

Article by courtesy of

Ambassador (Ret) Edward B. O’Donnell
Director, International Operations
American Business Development Group
1201 Main Street, Suite 910
Columbia, SC 29201
Tel: +1-803-929-1414, Fax: +1-803-929-1415
E-Mail:  Edward.O’This email address is being protected from spambots. You need JavaScript enabled to view it.    

Ambassador (Ret.) Ed O'Donnell, Jr. Director, International Operations ABDG. Senior career diplomat with the Department of State – recently served in the Obama Administration at the State Department, Bureau of Legislative Affairs, working with the U.S. Congress

ABDG is a full service sales and marketing, business development and legislative consulting company located just outside of Washington, D.C. Its international operations office is located in Columbia, SC.

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