Posted on 12/28/2003 3:55:54 AM PST by snopercod
WASHINGTON — Osama bin Laden and his henchmen had hoped their attacks would cripple the U.S. economy. But while Sept. 11 helped deepen the nation's recession, the al-Qaida terrorists also unwittingly spurred a new, fast-growing industry dedicated to homeland security.
This industry, built around the Homeland Security Department and the focus on terrorism in the United States, has attracted old-line defense contractors, small businesses, universities, investment bankers, consultants and newsletter publishers.
Homeland-security conferences, where business people network in hopes of landing a Homeland Security Department contract, are common. So are trade shows featuring displays of such products as bomb-resistant glass for offices and imaging machines to reveal the innards of trucks and cargo containers.
With overall homeland-security spending estimated by analysts at about $55 billion this year, some observers believe that a homeland-security-industrial complex is emerging, much as the military-industrial complex became a huge presence in American life during the Cold War.
While many regard the newfound seriousness about homeland security as welcome compared with the blissful ignorance that largely prevailed before Sept. 11, 2001, concerns remain that Americans eventually could get more than they bargained for.
Will the homeland-security industry mimic the defense establishment? Will it develop an agenda more aligned with maintaining and expanding its programs and jobs than with what best serves taxpayers?
"Have we created a homeland-security complex? The answer is yes," said Charles Pena, director of defense-policy studies at the libertarian Cato Institute think tank in Washington, D.C., and a former defense-contractor employee. "This is one of the fears that many had ... when the department was created because when you create a government bureaucracy you create a market.
"Everyone knew it would be a fairly large budget, that there would be contractors lining up at the door to get their share of the federal government dollars," Pena said.
"The real question is how much of that really goes toward doing substantive work that protects the homeland? When you create a bureaucracy, it takes on a life of its own."
A report by O'Gara, a Washington, D.C.-based firm that researches and invests in homeland-security companies, estimates that the market so far for federal homeland-security contracts is $7 billion annually.
There already have been some big contracts. In September, the department's Bureau of Customs and Border Protection awarded a $500 million, 10-year contract to Chenega Technology Services, a tribally owned Alaska Native company.
The largest award ever made by a federal agency to a small business such as Chenega, the contract calls for the company to oversee maintenance of all 12,000 screening devices at the nation's ports of entry.
The largest homeland-security contract to date, however, is likely to be the one scheduled to be awarded in May. That contract, which could total $10 billion, is to implement the U.S. Visitor and Immigrant Status Indicator Technology, or US-VISIT, the data-gathering project to track all visitors to the United States. It is being hotly pursued by major companies including Lockheed Martin, Computer Sciences and Accenture.
Few economists would argue that defense or homeland-security spending is the best way to create wealth, and it hasn't been since the days when President Eisenhower first raised warnings about the military-industrial complex. But the contracts do hold out the promise of big profits.
Defense contractors have taken existing military product lines and repositioned them for homeland security.
At a recent media briefing, Northrop Grumman officials discussed how the company's technology could be used to prevent shoulder-fired missiles from destroying a commercial airliner.
Robert Del Boca, a Northrop Grumman vice president, said his company has proposed the use of plane-mounted lasers that fool anti-aircraft missiles into detonating at safe distances from the aircraft.
The technology, already installed on some military aircraft, could be converted to civilian use for a cost estimated at $1 million per plane, Del Boca said.
Northrop Grumman hopes to be selected to outfit a large number of the nation's more than 6,000 commercial aircraft. One of its competitors for the Homeland Security Department award is United Airlines in partnership with Alliant Techsystems, a large defense contractor based in Edina, Minn.
Law and consulting firms also have new homeland-security practices. And universities are adding homeland-security classes.
The University of Denver, Johns Hopkins University and George Washington University, for instance, now offer graduate-level homeland-security courses, with Denver offering a master's degree concentration and certification.
Not everyone accepts the idea that a homeland-security-industrial complex has arrived. Retired Maj. Gen. Bruce Lawlor, the Homeland Security Department's chief of staff until mid-November when he left for the private sector, said he believes it's premature to apply the term, although he shares some of Pena's concerns.
"There are some major defense companies that are a little overzealous in trying to portray the threat as a basis for marketing their technologies or products," Lawlor said.
"But I think that's been true since the Cold War started. That's probably one of the major criticisms of the military-industrial complex, the tendency for overwrought discussion of the threat to drive requirements for purchasing new equipment, new technology."
Lawlor, now head of homeland-security initiatives for the Stevens Institute of Technology in Hoboken, N.J., declined to name names.
But "there's been a wealth of products marketed, aimed at first responders, suggesting they'll provide greater protection, greater detection capabilities, greater communications capabilities, that probably are not good investments" given the reality of the situation, he said.
Darryl Moody, a vice president who oversees the homeland-security work at BearingPoint, a Virginia-based consulting firm with several Homeland Security Department contracts, said it would be a mistake to think contractors are focused only on money:
"The risk is huge. If we're doing a budget system for Department of Interior and we flip the switch and the thing doesn't work, our program manager's going to get upset ... but it's not going to endanger lives. ... Homeland-security stuff does."
All this money being spent on "security" is money that could have been put to productive use, had it remained in private hands.
So what we have is more money chasing less goods, the classical definition of inflation. It's coming.
This may not be an accurate statement.
These services and products did not spring into existence overnight just to create a "Homeland Security Industry/Government Complex", as the Seattle Times so charmingly puts it.
The only thing that is new is the huge buearacracy and the emphasis that is finally being placed on keeping you and I safe from foreign adventurers.
...and little old ladies with knitting needles in their carry-on bags.
Stephenson, a onetime speechwriter for Governor Michael S. Dukakis who worked as an environmental strategy consultant in the 1980s and an Internet consultant in the 1990s, moved into the homeland security field after Sept. 11, 2001. The advice he offers to his clients at Stephenson Strategies in Medfield -- mostly small and mid-size companies -- centers on one idea: They should view security outlays not just as an expense, but as an opportunity to rethink their businesses.
Advocating a "systems approach" that extends beyond the security and information technology departments, Stephenson said many of the steps needed to improve security also are those needed anyway to make operations more efficient: These include linking all aspects of the organization, eliminating errors, switching from linear to cyclical processes to make previously hidden actions transparent, and empowering individuals through software that puts data in the hands of the people dealing with customers, whether at stores or airports.
Boston Globe article. Talks about how xml will bring about important changes in the way we exchange data. Important stuff.
Security is a value, but there is no way to put a dollar figure on it.
TSA managed to piss away millions on contracts that completely wasted resources! All Human Resources are outsourced to a hefty tune! The first HR contract cost over 600 million - which was a total travesty of taxpayer dollars - TSA fired that contractor but they got to keep the money. HR is the biggest joke at TSA! Once again is was hiring by who you know not what you know!
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