Funding dries up for DHS emerging tech investments

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The Department of Homeland Security's early-stage tech investment program is notifying participants that solicitations could be cancelled due to lack of funding.

While the Silicon Valley Innovation Program is funded for fiscal year 2019 at $10 million in the most recent appropriations bill, that same legislation also stripped DHS of its ability to fund projects using other transaction authority. DHS has been without OTA powers since Feb. 15, according to contracting documents.

SVIP updated contracting information on two ongoing solicitations on April 26 to alert companies that unless funding authority was restored by Congress, the agency would have to cancel the efforts. (One of the solicitations looks to blockchain to prevent counterfeiting of documents, while the other focuses on improving object recognition in passenger screening technology.)

SVIP was launched in 2015 to try to provide relatively small early-stage funding awards – usually in the $50,000 to $200,000 range -- to companies that are interested in developing technology with application to DHS missions, including traveler screening, immigration and customs processing, first responder technology and cybersecurity. Essentially, SVIP acts as an early-round investor to offer funding based on promising pitches to small, emerging companies that traditionally have not seen the federal government as a business partner. Companies are eligible for a maximum of $800,000 over four funding stages.

According to the SVIP website, the program is currently funding 32 companies. These firms will continue in the program, according to John Verrico, a spokesperson for the DHS Science & Technology Directorate.

"We continue to work with the startups under current agreements and are excited in the momentum and good work being done by the recipients of this authority. DHS is working as quickly as possible to reestablish impacted operations as soon as possible," Verrico told FCW in an email.

OTA programs have run afoul of members of Congress and oversight bodies who worry that such funding can be used without the normal checks and regulations in the Federal Acquisition Regulation. In May 2018, the Government Accountability Office ruled that a $950 million OTA award to REAN Cloud was improperly awarded in response to a protest from Oracle.

In the fiscal year 2019 defense appropriations bill, lawmakers noted in the bill's report that the committee was "concerned with the lack of transparency on the use of OTA authority for follow-on production procurements."

Last November, DHS Chief Procurement Officer Soraya Correa warned that legislation restricting other transaction authority was "in the air."

It's not clear what the motivation in Congress was to check OTA at DHS.

This article was updated April 30 to add comment from DHS.

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy and the Department of Veterans Affairs. Prior to joining FCW, Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, New York Press, Architect Magazine and other publications.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


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