DHS’ Transportation Security Administration spent $67 million for 258 proposed port security projects that an internal review board had said were “marginal” to key security needs, and were given out despite “dubious” scores on key criteria issued by the project’s own evaluators, Acting Inspector General Richard L. Skinner said.

In addition, he said, the program “did not have the benefit of national key asset and critical infrastructure protection information now being developed” by DHS, meaning that key program stakeholders at the department “did not collaborate to integrate the program with broader national security initiatives.”

Since its inception in fiscal 2002, the port security grant program has spent $560 million in grants for more than 1,200 projects and has been allocated $150 million for fiscal 2005.

However, in early February the Bush Administration announced its plan to eliminate the grant program, and replace it with a broad critical infrastructure funding category—a proposal that has generated consternation among America’s leading public port authorities.

Noting that private sector entities had received “substantial” port security grant funding, Skinner said that “some of these funds went to projects that reviewers rated overall as below average or worse during the evaluation process, calling into question the merits of these projects.”

DHS made awards for private sector projects that, Skinner said, “appeared to be for a purpose other than security against and act of terrorism; were required as a normal course of business, replaced existing security measures, or were very low in cost and affordable.”

In fiscal 2003 and early fiscal 2004 alone, Skinner said, the TSA gave $32.4 million in grants to private companies that were “below average or worse” when measured against the criteria issued by the program’s own review board.

DHS should develop a policy on grants to the private sector in order to prevent more abuses, Skinner said. “The question of where the private sector’s responsibility for preventing terrorism ends and where the federal government’s responsibility begins poses a dilemma for the Port Security Grant Program.”

In a December 30, 2004 response to the IG’s draft report, DHS noted that last year the department decided not to fund any private sector entities that were Fortune 500 companies.

Skinner’s report, which was released Tuesday, said that it review was conducted between December 2003 and May 2004 and the IG report released Tuesday, when the grant program was run by the Transportation Security Administration.

According to the IG report, 33 ports received grants without a required explanation about how they meet DHS’s definition of being “national critical seaports” due to their importance to the national economy, their high passenger volume or their handling of dangerous cargo.

In fiscal 2003, when TSA and DHS’s Office of Domestic Preparedness distributed $75 million in grants for 86 projects, nearly 40 percent of those were placed in the bottom 25 percent of the rankings handed out by the program’s internal review board, Skinner added.

Last year, the port security program was moved to the Office of State and Local Government Coordination after the ODP was abolished. [In early February, DHS officials told Port Security News that they were working with the U.S. Coast Guard and other government stakeholders to negotiate future criteria upon which to judge applications and the process by which awards will be made.]

The IG report laid blame for many of the questionable funding decisions on conflicting views held by DHS officials about whether it was better to distribute the grants among the greatest number of applicants possible or to target the ports considered most at-risk.

“The program is attempting to reconcile the goals of the Maritime Transportation Security Act of 2002 (MTSA), the competitive grant program mandated by Congress, and risk based direction of grant monies,” Skinner reported. “MTSA is a nationwide security mandate that widely affects the maritime industry.

 “The program is faced with the competing pressures of offsetting MTSA related costs while making competitive and risk based grant decisions to protect the nation’s most critical ports and port facilities,” he added.

 “… Grant award decisions are made with the intent of expending all available funding and spreading funding to as many applicants as possible.”

Martin Edwin Andersen can be reached at Mick_Andersen@portsecuritynews.com.

Copyright © 2005 Port Security News