Opportunities for the Private Sector

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Opportunities for the Private Sector
March 2009

• Thomas A. Cellucci, Ph.D., MBA
• Chief Commercialization OfficerDepartment of
  Homeland Security
• Email Thomas.Cellucci_at_dhs.gov

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Discussion Guide

• Overview of Department of Homeland Security
• Commercialization Office Initiatives at DHS
• Capstone Integrated Product Teams (IPTs)
• Market Potential is Catalyst for Rapid New
  Product Development
• Getting on the Same Page
• SECURE Program
• Safety Act Protection
• TechSolutions
• SBIR Opportunities
• Getting Involved
• Effecting Change in Government
• Summary

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Homeland Security Mission

• Lead Unified National Effort to Secure America
• Prevent Terrorist Attacks Withinthe U.S.
• Respond to Threats and Hazards to the Nation
• Ensure Safe and Secure Borders
• Welcome Lawful Immigrants and Visitors
• Promote Free Flow of Commerce

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U.S. Department of Homeland Security
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Office of the Under Secretary forScience and
Technology
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ST Goals
Consistent with the Homeland Security Act of 2002

• Accelerate the delivery of enhanced technological
  capabilities to meet the requirements and fill
  capability gaps to support DHS agencies in
  accomplishing their mission.
• Establish a lean and agile world-class ST
  management team to deliver the technological
  advantage necessary to ensure DHS Agency mission
  success and prevent technological surprise.
• Provide leadership, research and educational
  opportunities and resources to develop the
  necessary intellectual basis to enable a national
  ST workforce to secure the homeland.

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DHS ST Investment PortfolioBalance of Risk,
Cost, Impact, and Time to Delivery
Customer Focused, Output Oriented
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ST Organization
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Homeland Security ST Enterprise
DHS RESEARCH AFFILIATES
HSI
DHS Labs
Centers of Excellence
National Labs
DoD
DHS ST Directorate
DoE
PRIVATESECTORPARTNERS
DoJ
DoT
FEDERAL PARTNERS
EPA
HHS
International
NASA
Associations
NIH
NIST
Industry
NOAA
NSF
UARCs
Rev 9-5-08
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Commercialization Office Major Activities
Commercialization Office
Requirements Development Initiative
Private Sector Outreach
Commercialization Process
Public-Private Partnerships

• Hybrid Commercialization Model
• Product Realization Chart
• Commercialization Framework and Mindset

• FutureTECH (TRL 1-6)
• SECURE (TRL 5-9)
• Concept of Operations
• Website Development
• Internal processes developed and socialized
• Requirements and Conservative Potential Market
  Available Estimates Communicated

• Requirements Development Book(s)
• Operational Requirements Document Template
• Training for end users and engineers

• Invited Speeches
• Meetings with business executives
• Numerous articles written and published regarding
  observations and programs in practice.
• Repository of currently available products,
  services and/or technologies in the private
  sector aligned to Capstone IPT Capability Gaps

http//www.dhs.gov/xabout/structure/gc_12341944792
67.shtm
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Three Step ApproachKeep it Simple and Make it
Easy

• Develop Detailed Requirements
• And Relay Conservative Market Potential

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1

• Establish Strategic Partnerships
• Business Case Information
• Open Competition
• Detailed Mutual Responsibilities

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3
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Deliver Products!
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Two Models for Product Realization

• Big-A Acquisition
• Requirements derived by Government
• RFP and then cost-plus contract(s) with
  developer(s) (which incentivizes long intervals)
• Focus on technical performance
• Production price is secondary (often ignored)
• Product price is cost-plus
• Product reaches users via Government deployment

• Pure Commercialization
• Requirements derived by Private Sector
• Product development funded by the developer
  (which incentivizes short intervals)
• Technical performance secondary (often reduced in
  favor of price)
• Focus on price point
• Product price is market-based
• Product reaches users via marketing and sales
  channels

?
Is there a Middle Ground
Performance/Price is King
Performance is King
Relationship between end users and product
developer is crucial
Relationship between end users and product
developer is usually remote
Source Senior Executive Brief to Secretary
Chertoff, Deputy Secretary Schneider and Leaders
of G-7
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A new model for Commercialization

• Development of Operational Requirements Document
  (ORD)
• Assess addressable market(s)
• Publish ORD and market assessment on public DHS
  web portal, soliciting interest from potential
  partners
• Execute no-cost agreement (streamlined CRADA)
  with multiple Private Sector entities,
  transferring technology (if necessary)
• Develop supporting grants and standards as
  necessary
• Assess TE after product is developed
• New Commercial off the Shelf (COTS) product
  marketed by Private Sector with DHS support

• Differences from the Acquisition model
• Primary criteria for partner selection is market
  penetration, agility, and performance/price ratio
• Product development is not funded by DHS
• Government involvement is limited to inherently
  governmental functions (e.g., Grants and
  Standards)

Source Senior Executive Brief to Secretary
Chertoff, Deputy Secretary Schneider and Leaders
of G-7
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Commercialization Process
Commercialization The process of developing
markets and producing and delivering products or
services for sale.
Legend EHC Enabling Homeland Capability CG
Capability Gap ORD Operational Requirements
Document CONOPS Concept of Operations PAM
Potential Available Market COTS Commercial Off
The Shelf
Source Senior Executive Brief to Secretary
Chertoff, Deputy Secretary Schneider and Leaders
of G-7
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Contact with the Private Sector
Company Overview and Marketing Materials Received
and Communicated through ST
Initial Contact with Private Sector
Private Sector requests more information
Full Response Package sent to requestors,
usually within same day

• Opportunities for the Private Sector
• Developing Operational Requirements
• High Priority Technology Needs
• SECURE Program CONOPS
• Example Company Overview Document
• Operational Requirements Document Template

Invited Speeches/Presentations Congressional
Referrals Conference Attendance Seminar
Hosting Published Articles Word of Mouth DHS
Website
Private Sector includes Venture Capitalist and
Angel Investor Communities
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ST Transition Capstone IPTs Members and Function
ST Customer
Identify Capability Gaps
DHS Management (Acquisition)
Validate Future Acquisition Plan
TE
TE
Offer Technical Solutions
ST Provider
End User
Provide End User Perspective

• Industry Board of Directors Model
• Consensus-driven Process

End Result Prioritized Investments in ST
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DHS ST Capstone IPTsGathering Mechanism for
Customer Requirements
Information Sharing/Mgmt
Border Security
Chem/Bio
First Responders
DHS 1st Responder RDTE Coordinating Council
IP/OHA
OIA
CBP/ICE
Acquisition
Acquisition
Chem/Bio
FEMA Gransts Commercialization
ST 1st Responder Coordination
C2I
Acquisition
Borders/Maritime
End User
TE Standards
Inspector/Agents
OOC
Transportation Security
Maritime Security
Cyber Security
Counter IED
TSA
CSC
USCG
OBP/USSS
Infrastructure/Geophysical/C2I
Explosives (Human Factors / Infrastructure
Geophysical)
Acquisition
Explosives
Acquisition
Acquisition
Borders/Maritime
Acquisition
Infrastructure Owners/Operators
End-User
Guardsmen
End-User
Incident Management
Infrastructure Protection
Cargo Security
People Screening
Prep Response
Interoperability
CBP
SCO/CIS
FEMA
FEMA/OEC
Acquisition
Human Factors
Infrastructure/Geophysical
Acquisition/Policy
Acquisition
Acquisition
Borders/Maritime
C2I
Officers/Industry
First Responders
First Responders
US VISIT/TSA
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Cargo Security
Representative Technology Needs

• Enhanced screening and examination by
  non-intrusive inspection
• Increased information fusion, anomaly detection,
  Automatic Target Recognition capability
• Detect and identify WMD materials and contraband
• Capability to screen 100 of air cargo
• Test the feasibility of seal security detection
  of intrusion
• Track domestic high-threat cargo
• Harden air cargo conveyances and containers
• Positive ID of cargo and detection of intrusion
  or unauthorized access

Source ST High Priority Technology Needs, May
2007
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Establishment of Project IPTsDetailed
Specifications/Requirements

• Members
• ST Program Manager(s)
• Operating Components Program Manager(s)
• End-User(s)
• Supplier/Provider
• Meet at Least Monthly
• Report to CapstoneIPT Quarterly

Capstone IPT
Project IPTs
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Requirements Hierarchy (TSA example)
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ORD Operational Requirements Document

• What ORDs provide a clear definition and
  articulation of a given problem.
• How Training materials have been developed to
  assist drafting an ORD.
• Developing Operational Requirements, 194pp.
  Available online http//www.dhs.gov/xlibrary/asse
  ts/Developing_Operational_Requirements_Guides.pdf
• When For Use in Acquisition, Procurement,
  Commercialization and Outreach Programs Any
  situation that dictates detailed requirements (
  e.g. RFQ, BAA, RFP, RFI, etc.)
• Why Its cost-effective and efficient for both
  DHS and all of its stakeholders.

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Good ORDs

• Solution Agnostic
• Take into account the varying needs and wants of
  markets/market segments/market sub-segments

Define Problem
Verify results to reach consensus-based
articulation of the problem Strive for
excellence, not perfection!
Conduct Research
Data Collection
Interpret and Analyze
Source Kaufman, et. al.
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Interlinking Mechanisms Create Conversation
Pipelines
The Neural Net
Requirements
Output Capabilities
Congress GAO OMB Intl Orgs Other Govt Agencies
Resources (Money, Facilities, Human Capital,
Technology)
Acquisition
Government Stakeholders
Technology Development
Industry
John Higbee Director, Acquisition Program
Management Division
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Evolution of Change DHS Providing Better
Information about its Needs
DoD, DoE, DHS, DoJ, DoT, etc.
Semantic Web 3.0 (The Future)
DHS, First Responders, CI/KR Federal Stakeholders
Harnessing the Valuable Experience and Resources
of the Private Sector (Feb. 2009)
Developing Operational Requirements (Nov. 2008)
Capstone IPT Process
Requirements Development Guide (May 2008)
Science Technology Directorate
(August 2006)
Industry Business, Venture Capital/Angel
Investment, Strategic Partnerships
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Does this look familiar?!
Author Unknown
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Getting on the Same Page

• Historical Perspective
• Language is Key
• Communication is Paramount

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Technology Readiness Levels (TRLs) Overview
TRLs are NASA-generated and Used Extensively by
DoD
Basic
TECHNOLOGY MATURITY
Advanced
Applied
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TRL Correlation DHS and Private Sector
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Transition Approaches
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Market Potential Template
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Conservative Estimate Number of First Responders
in the US

• Homeland Security Presidential Directive 8
• Steve Golubic (FEMA)

Total gt 25.3 Million Individuals

• FIRE

POLICE
EMT
BOMB DISPOSAL
Front Line gt 2.3 Million
Support to Front Line gt 23 Million
Port Security
Public Health
Hospitals
Transportation
Emergency Management
Clinics
Venue Security
Public Works/Utility
School Security
Response Volunteers
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Call to Action Mutual BenefitsCreate
Win-Win-Win Relationships

• Learn Current
• DHS Needs
• Visitwww.FedBizOpps.govandwww.hsarpabaa.com
• for currentsolicitations

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Inform DHS of Products/Capabilities Request DHS
ST Full Response Package at thomas.cellucci_at_dhs
.gov
Interact with DHS EstablishMutually-beneficial
Relationship
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SECURE ProgramMutually-Beneficial Goals
Achieved Through Rigorous Process
Goals
Process
Alignment to DHS Detailed Requirements
System Efficacy
through
Private Sector Product Development
Commercialization
Product Launch, Sales and Marketing
Utilization
Customer-Focused Capstone IPT Process
Relevance
Evaluation
Third-party Test Evaluation with DHS Validation
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Input Function for SECURE
Operational Requirements
DHS Operating Components
SECURE Program
Other DHS Organizational Elements
First Responders
Critical Infrastructure/Key Resources
Capstone IPT
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SECURE ProgramConcept of Operations
Agreement
Selection
Publication of Results
Application

• Application Seeking products/technologies
  aligned with posted DHS requirements
• Selection Products/Technologies TRL-5 or above,
  scored on internal DHS metrics
• Agreement One-page streamlined CRADA document.
  Outlines milestones and exit criteria
• Publication of Results Independent Third-Party
  TE conducted on TRL-9 product/service.
  Results verified by DHS, posted on DHS web-portal

• Benefits
• Successful products/technologies share in the
  imprimatur of DHS
• DHS Operating Components and First Responders
  make informed decisions on products/technologies
  aligned to their stated requirements
• DHS spends less on acquisition programs ?
  Taxpayers win.

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Why SECURE Program

• Multi-Use
• Provides private sector, in an open and
  transparent way, with what they need most - -
  Business Opportunities
• Provides assurance to DHS, First Responders and
  private sector users (like CI/KR) that
  products/services perform as prescribed (and
  provides vehicle for First Responders, CI/KR
  owners and operators to voice their requirements)
• Augments the value of the SAFETY Act
• Saves Money
• Private Sector uses its own resources to develop
  products and services to the benefit of the
  taxpayer and the Federal Government
• Creates Jobs
• Detailed articulation of requirements coupled
  with funded large, potential available markets
  yield OPPORTUNITY that yields Job Creation (its
  better to teach a person to fish than to give
  them a fish)
• Enables small firms with innovative technologies
  to partner with larger firms, VCs and angel
  investors because of the credibility of having
  government show detailed requirements with
  associated market potential (instead of just
  their own business plans).
• Efficient Use of Government Funds
• Articulating detailed requirements saves time
  and money. It is better for Government to spend
  funds to procure products or services that are
  available for sale and rigorously tested compared
  to spending money and time to develop new
  solutions for ill-defined problems.

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SECURE ProgramBenefit Analysis Win-Win-Win
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FutureTECH ProgramA Look into DHS STs Crystal
Ball

• Focus on long-term needs of DHS stakeholders
  years into the future
• Public-Private Partnerships for early-stage
  technology development (TRL 1-6)
• Complimentary to SECURE Program
• DHS ST to supply information on Critical
  Research and Innovation Focus Areas

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FutureTECH ProgramConcept of Operations
Expression Of Interest
Acceptance
Publication of Results
CRADA

• Expression of Interest Seeking technologies
  aligned with posted DHS Critical Research and
  Innovation Focus Areas
• AcceptanceTechnologies TRL-6 or below, scored on
  internal DHS metrics
• CRADA One-page CRADA document. Outlines
  milestones and exit criteria
• Publication of Results Independent Third-Party
  TE conducted on TRL-6 technology. Results
  verified by DHS, posted on DHS web-portal

• Benefits
• Insight into future needs of DHS Stakeholders
• Increased speed-of-execution of technology
  development and transition
• DHS spends less on technology development ?
  Taxpayers win.

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FutureTECH ProgramCritical Research Innovation
Focus Areas

• Improvised Explosive Devices Detect Defeat
  Countermeasures
• Waterborne IEDs
• Vehicle Borne IEDs
• Radio Controlled IEDs
• Person Borne IEDs
• IED Assessment and Diagnostics
• IED Access and Defeat
• Homemade Explosives
• IED Threat Characterization
• IED Mitigation Alert/Warning System
• IED Deter and Predict Network Attack and
  Analysis

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SECURE/FutureTECH Flow Process
Requirements Based Planning Submitted by
PM/DL
CRADA Execution Product/Technology Test
Evaluation
PM reviews responses and sends feedback to
submitters
Portfolio Manager Review
5W/ORD Posted to Websites by Commercialization
Office
CRADAs executed at PMs discretion
5W/ORD Document
SECURE and FutureTECH web pages on DHS.gov

• Solution agnostic
• Problem descriptions
• Needs developed with stakeholders input
• Consensus Driven (also develop PAM)
• Concise, yet detailed

Begin Public-Private Partnership CONOPS SECURE
Program FutureTECH
Selection
Publication of Results
Application
Agreement
Expression Of Interest
Acceptance
Publication of Results
CRADA
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http//www.dhs.gov/xopnbiz/
Open for Business
SECURE Program
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Federal Business Opportunities

• Sites where the Office of Procurement Operations
  (OPO) posts opportunities for prospective
  suppliers to offer solutions to DHS STs
  needs
• www.FedBizOpps.gov
• https//baa.st.dhs.gov/
• https//www.sbir.dhs.gov/
• www.Grants.gov

• take advantage of...
• Vendor Notification Service Sign up to receive
  procurement announcements and solicitations/BAA
  amendment releases, and general procurement
  announcements.http//www.fedbizopps.gov
• STs Solicitation Portal The Department of
  Homeland Security Science and Technology
  Directorate currently has several active
  Solicitations on a broad range of topics.
  Relevant information is posted and access to the
  teaming portal, conference registration and white
  paper/proposal registration and submission is
  provided, as applicable. In addition, historical
  information about past Solicitations and
  Workshops is maintained. https//baa.st.dhs.gov
• Truly Innovative and Unique Solution Refer to
  Part 15.6 of the Federal Acquisition Regulation
  (FAR) which provides specific criteria that must
  be met before a unsolicited proposal can be
  submitted to Diane Osterhus.http//www.acquisitio
  n.gov/far/current/html/Subpart2015_6.html

Contact Information Diane Osterhus Department
of Homeland Security Office of the Chief
Procurement Officer 245 Murray Dr., Bldg.
410 Washington, DC 20528 unsolicited.proposal_at_dhs.
gov 202-447-5576
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Show Us the Difference
Halls Competitive Model

• As a function of
• Market
• Application
• Technology

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More Opportunities with DHS Science and Technology
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SAFETY Act Support Anti-Terrorism by Fostering
Effective Technologies Act of 2002

• Enables the development and deployment of
  qualified anti-terrorism technologies
• Provides important legal liability protections
  for manufacturers and sellers of effective
  technologies
• Removes barriers to industry investments in new
  and unique technologies
• Creates market incentives for industry to invest
  in measures to enhance our homeland security
• The SAFETY Act liability protections apply to
  avast range of technologies, including
• Products
• Services
• Software and other forms ofintellectual property
  (IP)

• Examples of eligible technologies
• Threat and vulnerability assessment services
• Detection Systems
• Blast Mitigation Materials
• Screening Services
• Sensors and Sensor Integration
• Vaccines
• Metal Detectors
• Decision Support Software
• Security Services
• Data Mining Software

Protecting You, Protecting U.S.
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Criteria as stated in the SAFETY Act

• Is it an Anti-Terrorism Technology?
• Is it effective and available?
• Does it possess large potential third party
  liability risk exposure?
• Does Seller need SAFETY Act?
• Does it perform as intended?
• Does it conform to Sellers specifications?
• Is it safe for use as intended?

Addition SAFETY Act information
Online www.safetyact.gov Email
helpdesk_at_safetyact.gov Toll-Free 1-866-788-9318
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Award Criteria
Certification
Designation
Developmental Testing and Evaluation (DTE)
Effectiveness Evaluation Conclusion
Consistently proven effectiveness, i.e.
operational performance (with high confidence of
enduring effectiveness)
Demonstrated effectiveness, i.e. Developmental
testing (with confidence of repeatability)
Needs more proof, has potential
Protection

• Government Contractor Defense (GCD)
• for any and all deployments in 5-8 years term

• Liability cap
• for any and all deployments in 5-8 year term

• Liability cap
• only for identified test event(s) and for limited
  duration (3yrs)

Examples

• EDS TSL Certified
• Well-documented infrastructure protection service
  with history of excellent performance and meeting
  DoE standards

• Radiological detector with laboratory success
  Opt-out screeners, only similar projects completed

• EDS not yet TSL Certified
• Novel incident pattern matching service

EDSExplosive Detection System
TSLTransportation Security Laboratory (TSA)
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https//www.sbir.dhs.gov
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TechSolutions

• The mission of TechSolutions is to rapidly
  address technology gaps identified by Federal,
  State, Local, and Tribal first responders
• Field prototypical solutions in 12 months
• Cost should be commensurate with proposal but
  less than 1M per project
• Solution should meet 80 of identified
  requirements
• Provide a mechanism for Emergency Responders to
  relay their capability gaps
• Capability gaps are gathered using a web site
  (www.dhs.gov/techsolutions)
• Gaps are addressed using existing technology,
  spiral development, and rapid prototyping
• Emergency Responders partner with DHS from start
  to finish

Rapid Technology Development Target Solutions
Fielded within 1 year, at lt1M
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Getting Involved ST Contacts
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Summary

• Detailed Requirements
• Sizeable Market Potential
• Delivered Products PERIOD!
• How Can You Afford NOT to Partner with DHS?
• Questions/Comments
• Thomas A. Cellucci, Ph.D., MBA
• thomas.cellucci_at_dhs.gov

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U.S. Department of Homeland Security Science and
Technology Directorates Chief Commercialization
Officer
Dr. Cellucci accepted a five-year appointment
from the Department of Homeland Security in
August 2007 as the Federal Governments first
Chief Commercialization Officer (CCO). He is
responsible for initiatives that identify,
evaluate and commercialize technology for the
specific goal of rapidly developing and deploying
products and services that meet the specific
operational requirements of the Department of
Homeland Securitys Operating Components and
other DHS stakeholders such as First Responders
and Critical Infrastructure/Key Resources owners
and operators. Cellucci has also developed and
continues to drive the implementation of
DHS-STs outreach with the private sector to
establish and foster mutually beneficial working
relationships to facilitate cost-effective and
efficient product/service development efforts.
His efforts led to the establishment of the
DHS-ST Commercialization Office in October 2008.
The Commercialization Office is responsible for
four major activities a requirements development
initiative for all DHS stakeholders, the
development and implementation of a
commercialization process for DHS, development
and execution of private sector partnership
programs such as SECURE and leading the private
sector outreach for the ST directorate. Since
his appointment, he has published three
comprehensive guides Requirements Development
Guide (April 2008), Developing Operational
Requirements (May 2008), and Developing
Operational Requirements, Version 2 (November
2008) dealing with the development of
operational requirements, developed and
implemented a commercialization model for the
entire department and established the SECURE
Programan innovative public-private partnership
to cost-effectively and efficiently develop
products and services for DHSs Operating
Components and other DHS stakeholders. In
addition, he has written over 25 articles and a
compilation of works Harnessing the Valuable
Experiences and Resources of the Private Sector
for the Public Good, (February 2009) geared
toward the private sector to inform the public of
new opportunities and ways to work with DHS.
Cellucci has received recognition for his
outreach efforts and engagement with the small
and disadvantaged business communities who learn
about potential business opportunities and
avenues to provide DHS with critical technologies
and products to help secure America. Cellucci is
an accomplished entrepreneur, seasoned senior
executive and Board member possessing extensive
corporate and VC experience across a number of
worldwide industries. Profitably growing high
technology firms at the start-up, mid-range and
large corporate level has been his trademark. He
has authored or co-authored over 139 articles on
Requirements development, Commercialization,
Nanotechnology, Laser physics, Photonics,
Environmental disturbance control, MEMS test and
measurement, and Mistake-proofing enterprise
software. He has also held the rank of Lecturer
or Professor at institutions like Princeton
University, University of Pennsylvania and Camden
Community College. Cellucci also co-authored ANSI
Standard Z136.5 The Safe Use of Lasers in
Educational Institutions. Dr. Cellucci is also a
commissioned Admiral and Commander of a Squadron
in Texas responsible for civil defense and has
been a first responder for over twenty years. As
a result of his consistent achievement in the
commercialization of technologies, Cellucci has
received numerous awards and citations from
industry, government and business. In addition,
he has significant experience interacting with
high ranking members of the United States
governmentincluding the White House, US Senate
and US House of Representativeshaving provided
executive briefs to three Presidents of the
United States and ranking members of Congress.
Cellucci represents DHS as the first Federal
Government member on the U.S. Council on
Competitiveness. Cellucci earned a PhD in
Physical Chemistry from the University of
Pennsylvania, an MBA from Rutgers University and
a BS in Chemistry from Fordham University. He has
also attended and lectured at executive programs
at the Harvard Business School, MIT Sloan School,
Kellogg School and others. Dr. Cellucci is
regarded as an authority in rapid time-to-market
new product development and is regularly asked to
serve as keynote speaker at both business and
technical events.
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