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Aug. 18 (Bloomberg) -- Homeland Security Department officials have to keep many secrets in the fight against terrorism. Nick Nayak, the department’s top buyer, wants to reverse that practice when dealing with the department’s contractors.
For Homeland Security’s $13.4 billion in annual purchases, “the next generation is open, transparent -- much more communication with industry upfront,” Nayak said in an interview at his Southwest Washington office.
Nayak, 46, left a nearly 20-year career at the Internal Revenue Service to become Homeland Security’s chief procurement officer last September. He is pushing the department’s program managers to talk more with potential vendors about what DHS needs to reduce security threats and respond to disasters. The conversations should happen both before and after the agency issues contract requests, Nayak said.
DHS is trying to avoid contract failures stemming from poor communication with vendors, such as the one involving a billion- dollar border security contract with Boeing Co. Homeland Security Secretary Janet Napolitano halted the contract known as the Secure Border Initiative, or SBI, in January 2010, several months before Nayak’s arrival.
Napolitano questioned the cost-effectiveness of the contract and the reliability of cameras and radar on surveillance towers that Boeing was installing along the Southwest border. The Government Accountability Office criticized DHS for setting vague goals that changed frequently.
More communication ahead of time “ultimately helps you define your requirement better,” Nayak said. “A clearer requirement means you’re going to get a better deal. Both sides are going to expend less energy getting a better deal.”
Nayak learned the value of getting a good deal from his mom, who ran the family’s businesses.
“My mother is a phenomenal entrepreneur,” he said. “We had child daycare centers, and a travel agency, and eventually branched out to manage 51 single family homes. I come from a business background.”
Nayak’s parents emigrated from India to the United States to attend the University of Rhode Island in 1961, and instilled responsibility in the younger of their two sons. Nayak said he never missed a day of elementary or high school.
“There were times I would complain or make excuses, but they would never say a word, just give me a look,” he said.
Nayak’s father was a career scientist at the National Institutes of Health.
After graduating from Oxon Hill High School in Maryland, two miles south of the District of Columbia line, Nayak attended the University of Maryland. He spent three years working on Pentagon contracts for a privately held government contractor before working his way up the ranks of contracting positions during 19 years at the IRS.
He was deputy director for procurement at the tax- collecting agency when a disgruntled taxpayer flew his plane into the Austin, Texas, office in February 2010. Nayak was tapped to lead a security review of all 660 IRS buildings, which brought him into contact with DHS.
Congress created DHS in 2002, combining 22 agencies with a hand in anti-terrorism and disaster response, from the Coast Guard to the Federal Emergency Management Agency to the Customs Service, that critics said did not work together to prevent the September 11, 2001 terrorist attacks. The department’s purchases range from advanced imaging technology units for the Transportation Security Administration to national security cutters for the Coast Guard to the construction of border crossing stations by the Customs and Border Protection agency.
Accenture, the prime contractor on a system that gathers biometric information from international travelers, collected $167.8 million from the department in fiscal 2010, according to Bloomberg Government data. Two major information technology companies, IBM and Unisys, received $572.4 million and $404.5 million respectively from DHS last year.
Outside the office, Nayak had success on the tennis court, placing first or second in about 150 amateur tournaments in his 20s and 30s. He never picked up a tennis racquet before his senior year in high school, and said he never had a lesson.
Greg Rothwell, who served as the first chief procurement officer for DHS and knew Nayak from time they worked together at the IRS, said his former colleague has a good mix of business knowledge and interpersonal skills.
“Many people understand procurement law, but cannot lead,” said Rothwell, now founder and president at Evermay Consulting, which provides acquisition guidance to the private sector. “He understands what’s going on in the workplace, and is able to advance his agenda and get things done without a lot of drama.”
Rothwell also shares an interest in tennis and has gotten to know Nayak on the court.
“Almost everyone he has ever played has wanted to play him again, because you really feel like when you’re on the court you can actually learn from him,” Rothwell says.
At DHS, Nayak oversees an internship program with 200 participants. The interns rotate through the agencies at DHS, learning what each unit needs to buy. After graduating from the program, the interns take full-time contracting positions at the department.
“Here’s the formula that I tell to all our people: Customer service plus adherence to policy and regulation, plus getting a good deal is good contracting,” he said.
(For more information on Bloomberg Government, visit bgov.com.)
--With assistance by Brian Friel in Washington. Editors: David Ellis, Anne Laurent
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