Department of Homeland Security Takes Shape

February 2003
By Henry S. Kenyon

Business dealings will change with the U.S. government’s biggest structural revamp in 50 years.

The major consolidation of federal agencies that is creating the new Department of Homeland Security also is impelling private industry to adapt to the changing landscape. The resulting environment places more responsibility on businesses to protect vital infrastructure, but it also clears the way to a closer and more productive relationship between the commercial and public sectors.

The creation of this department represents a massive makeover for the U.S. government. The launch of the U.S. Department of Homeland Security introduces new methodologies that will redefine long-standing relationships between federal agencies and the commercial sector.

Created in response to the terrorist attacks of September 11, 2001, the new department represents the single largest organizational change within the federal government since the creation of the Defense Department in the late 1940s. As an organization, the Department of Homeland Security brings agencies such as the Immigration and Naturalization Service (INS), the Secret Service, the U.S. Coast Guard, the Customs Service and the Transportation Security Administration (TSA) under a single umbrella with 170,000 employees. Several of the largest agencies will transfer to the department on March 1, and a number of others will join on June 1.

The government learned some hard lessons before it established the department, explains James Flyzik, a former senior adviser for information technology to Homeland Security Department Secretary-Designate Thomas Ridge. “We can’t wait for something bad to happen to take preventative action. The terrorists taught us that we can never be complacent. We need to look out and try to anticipate things and make investments in areas to prevent things from happening. In the past, government has been reactionary—taking action after something bad happened. We now know, based on the experiences of 9/11, that these bad things are no longer minor, expensive annoyances,” he says.

Among its duties, the Homeland Security Department will analyze data provided by the intelligence community and its own agencies to protect vulnerable national assets, develop new technologies to detect and counter terrorist threats, monitor U.S. borders and points of entry, and coordinate the training and funding of state and local first-response organizations. Flyzik believes that additional priorities include border security, transportation security, prevention of the proliferation of weapons of mass destruction, intelligence sharing and analysis, and emergency response.

While these goals represent large-scale priorities for the department, he adds that another major effort will be to define and design the organization’s information technology architecture. Collecting intelligence data about potential terrorist attacks will be an important function of the department. A unit within the organization known as Information Analysis and Infrastructure Protection will receive reports from the Central Intelligence Agency and Federal Bureau of Investigation (FBI). The department’s other component agencies such as Customs, the INS, the Coast Guard and the TSA will provide additional data. If a potential terrorist threat is discovered, the agency will alert an organization such as the FBI.

The undersecretary in charge of this department will have access to three broad categories of information, including reports, assessments and analytical assessments of data relating to terrorism in the United States and other areas of the department’s responsibility. The undersecretary also can request material concerning infrastructure or other areas vulnerable to terrorism. Participating agencies will provide this information to the undersecretary unless directed not to do so by the president. The Homeland Security Department can access unprocessed raw data, but only if it is provided by the president and is related to significant and credible threats of terrorism.

Besides creating a framework for the new department to operate in, changes and modifications in prevailing government cultures are necessary for efficient operations. “I think you will see challenges to the traditional cultures of government—how government works. I think they are all very formidable challenges, and I believe the folks who are planning this recognize this and are positioning themselves to address it,” Flyzik says.

The new department will change how government works with private industry in several ways. He notes that the legislation gives the president and the department’s director the authority to develop new business models. In particular, the department can experiment with ways to allocate and use its human resources more efficiently. This flexibility extends to other operational aspects such as approaches to acquisition policy, he explains.

Another change will be in how government enterprises are defined. While the term enterprise previously referred to a single part of the government, the definition will apply to all levels, significantly altering the way business is conducted. “In the past, the enterprise was at the bureau or agency level. Here you have 22 departments coming together. In order to do the homeland security mission, it is going to take a tremendous amount of cooperation with state and local governments and tribal organizations,” Flyzik observes.

Private industry will have to adapt to the changes within government. He notes that as the concept of enterprise is redefined, companies will have to react accordingly and look at new ways to provide services to federal entities. This entails a holistic approach. No longer can potential homeland security efforts be viewed as separate state, local government or agency issues. “I think it’s going to have to be looked at from a mission perspective, and industry will have to adapt to that,” he maintains.

Businesses also can help homeland security efforts by better protecting themselves, Flyzik observes. Two areas where self-policing is vital are cybersecurity and critical infrastructure protection, because about 80 percent of the national security infrastructure is owned and operated by the private sector, which includes electrical power grids, water supplies and telecommunications networks. Although the government can provide some guidance, it is the security actions and investments made by the private sector that ultimately aid in protecting the nation’s infrastructure, he says.

But the private sector will not be working alone to assess infrastructure vulnerabilities. The department will work with the private sector to help it assess vulnerabilities and share best practices to mitigate them. As outlined by Ridge, one of the provisions in the legislation creating the department is an exemption from the Freedom of Information Act. This exemption primarily applies to the critical infrastructure and vulnerability protection work to be conducted with private firms. According to Ridge, the goal is to create a map of the national infrastructure and its vulnerabilities and then set priorities for protecting it. This effort will coordinate with national research laboratories to create models to assess different vulnerabilities and their consequences.

Likewise, private sector technologies can aid the government in its immediate efforts. Flyzik notes that some of the critically important systems under consideration include authentication mechanisms, interoperable wireless technologies, knowledge management and collaboration tools, and biometrics. Other important technologies under consideration are geospatial and incident reporting systems that overlay maps with satellite images and other data to facilitate quick incident response.

These changes reflect the evolving relationship between government and industry since 9/11. Flyzik believes this relationship has become closer and improved, citing the President’s Critical Infrastructure Protection Board and its information sharing groups that have been put into place to coordinate efforts. He notes that the government approached the homeland security issue in the same systematic way it approached the year 2000 challenge by taking a sector-by-sector approach to protect critical infrastructure. The private sector played a major role in the work, he adds.

Small businesses will have a role in the government’s ongoing homeland security efforts. Noting that small contractors always have been major players in government business contracts, Flyzik says that he believes that a number of niche technologies and information technology programs will involve products developed by small firms. Small businesses are likely to team with larger organizations to provide more comprehensive solutions to specific government needs. He speculates that it will require a variety of business types and sizes working together to meet the new definition of government enterprise being created at the department.

These changes may affect traditional contractor-subcontractor relationships. An area where a possible redefinition of roles may occur is in the way government contracts are put together. Flyzik believes that the new legislation authorizing the department could create these new opportunities written in its language.


Additional information on the Department of Homeland Security is available on the World Wide Web at

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