For Whom “The Wall” Profits IV: Boeing Wins SBInet Bid

Curbing illegal immigration and securing US borders has always been on top of the congressional agenda. And in an attempt by Republicans to show a unified party and gain points with voters in the November elections, House Speaker Dennis Hastert stood before the cameras last week shrilling about how the House had passed nine border-enforcement bills, which included their most proud bill – the construction of a 700-mile, double-layer fence. Echoing Hastert’s sentiments, Senate Majority Leader Bill Frist, R-TN announced that the Senate would consider the bill to build 700-mile fence. It’s the last week of the Congressional session and it seems the GOP have suffered a major setback as Congress is unable to pass any of the GOP’s draconian measures to overhaul the current immigration law.

However, what has received very little media attention is the decision made by the Department of Homeland Security (DHS) to award Boeing a $2.5 billion contract to manage its high-tech border initiative on September 21, 2006. The contract is known as SBINet, one of DHS’ largest and most important Homeland Security projects. After an intense face-off among nation’s largest military contractors, Boeing Company was picked by the Homeland Security. According to the Washington Post, Boeing’s border security plan for SBINet is to erect a network of 1,800 towers equipped with sensors, cameras, and heat and motion detectors to secure the US border.

“Boeing’s proposal relied heavily on a network of 1,800 towers, most of which would need to be erected along the borders with Mexico and Canada. Each tower would be equipped with a variety of sensors, including cameras and heat and motion detectors,”

Boeing plans to deploy the system along both the northern and southern borders within three years.

Earlier this year, when Homeland Security announced it was seeking bids to secure US borders, only five companies submitted proposals DHS, they were – Boeing, Ericsson, Lockheed Martin, Northrop Grumman and Raytheon. DHS Deputy Secretary Michael Jackson who oversees SBINet said that DHS choose Boeing because their plan relied less on the use of unmanned aerial vehicles than competing proposals submitted by Lockheed Martin, Northrop Grumman, Raytheon and Ericsson.

Conflicting Information
Before the DHS formally announced their decision to award the Boeing Company, on Sept 20, 2006, the Washington Post and the New York Times was first to report that Boeing had won the SBINet bid based on information they received from their “congressional sources” who happened to be briefed on the decision the day before, Sept 19, 2006. From the WaPO:

Aerospace and defense giant Boeing Co. has won a multibillion-dollar contract to revamp how the United States guards about 6,000 miles of border in an attempt to curb illegal immigration, congressional sources said yesterday.

And from the NY Times:

After a face-off among large military contractors, the Boeing Company was picked by the Homeland Security Department to lead a high-tech effort to secure borders, Congressional officials who were briefed on the decision said Tuesday.

However, there seems to be some conflicting information regarding the amounts Boeing is being awarded. The Post and most media are reporting Boeing received a multi-billion dollar contract, whereas, the Times came close to the amount DHS awarded Boeing, which far less that what the Post reported. The Times writes:

“The contract will at least initially be much more limited than some industry officials had expected, valued at $80 million instead of the $2 billion estimate given for the six-year deal,”

As a possible explanation for the conflicting information, GovExec.com notes that the information regarding the award had been “leaked” by Congressional sources to the Post and the Times before DHS made their official announcement.

Homeland Security Department officials on Thursday formally announced that they have entered into a $67 million contract with Boeing Co. to construct a series of towers monitoring a 28-mile stretch of the Arizona-Mexico border. Congressional sources briefed on the decision already had leaked word of the deal.

However, it seems the “leaked” information has created a problem because during the briefing, DHS denied that the department awarded Boeing a multibillion-dollar deal. DHS Deputy Secretary Michael Jackson told reporters on Sept 21, 2006, that the department only awarded Boeing a total of $67 million contract for the next three years. Jackson also said that DHS had the right to discontinue the contract, if Boeing failed to might the program’s goals, therefore downplaying DHS’ 3-year “exclusive commitment” with Boeing.

The Hot Seat
What is also not reported is that DHS has been in the hot seat with Congressional members ever since July’s House Government Reform Committee hearing revealed how DHS continues to manage their procurement process poorly.

In a recent committee report (Waste, Abuse, and Mismanagemen in Department of Homeland Security Contracts [pdf]) requested by House Government Reform Committee chair Tom Davis, R-VA, and ranking member Henry Waxman, D-CA, it identified 32 contracts, worth $34.3 billion, as having “significant overcharges, wasteful spending or mismanagement.” To be honest, I was not surprised by the reports findings considering the people that were appointed by Bush and Michael Chertoff, which I mentioned previously (here, here and here).

When it came to securing the borders, the report found that DHS has yet to implement DHS’ $10 billion US VISIT program.However, the committee was more concern on how Deputy Secretary Michael Jackson’s was handling DHS’ procurement procedures for the Secure Border Initiative for not spelling out the department’s specific needs to their bidders.

“That’s not governing,” Waxman said. “That’s not planning. It’s utter incompetence, and it’s going to cost the taxpayers billions.”

What is most troubling is how David Zavada, assistant inspector general in DHS’ Office of Audits, described DHS section process for SBINet’s prime contractor. Zavada told committee members the “selection of a prime contractor, appears to be at the intersection of accelerated scheduling, broad requirements and still-emerging technologies — giving it ‘tremendous risks.’”

The fact that DHS failed to spell out SBINet’s mission during DHS’ procurement process back in April of this year, explain the vagueness in Boeing’s press release, which did not mention the amount they were awarded nor any information on the type of services they will be providing.

Boeing’s consortium
Although Boeing’s press release may be vague, it does provide information who will be working with Boeing in securing the nation’s border.

The Boeing SBInet core team includes:

• Centech – Arlington, Va.
• DRS Surveillance and Reconnaissance Group – Palm Bay, Fla.
• Kollsman Inc. (an Elbit Systems of America company) – Merrimack, N.H.
• L-3 Government Services Inc. – Washington, D.C.
• L-3 Communication Systems West – Salt Lake City, Utah
• Lucent Technologies – Murray Hill, N.J.
• Perot Systems – Plano, Texas
• Unisys Global Public Sector – Reston, Va.
• USIS – Washington, D.C.

According to Government Computer News, most people were not expecting Boeing to win and some bidders are not happy with the decision.

Back in February, there were concerns of that foreign entity, Dubai Ports World, would be providing security. One of the arguments against Dubai Ports World was that port security should remain in the hands of American firms under American control at the very least. It seems Boeing’s team members have found a loophole in that argument. One of the companies in Boeing’s team is an Israeli owned company, Elbit Systems. Elbit serves as a member of the consortium through it’s Merrimack, NH-based surveillance technology firm, Kollsman Inc, the American arm of the Israeli global defense firm Elbit Systems – the company that currently handles Israel’s border security surveillance system that is integrated with sensors, radars, a “smart fence” and cameras, as well as sophisticated points of entry.

The irony is all this regarding the concerns of a foreign entity providing security for this nation’s border and ports, in the end it doesn’t matter, people forget about their fears and the Bush administration will do what ever it pleases just to line the pockets of his buddies. Six months ago, the nation was in an uproar about Dubai Ports World deal, forcing the company to make promise that it will sell its North American operations to appease critics in Congress. The same critics did not want foreigners running US ports and demanded that Dubai Ports find a buyer for its US facilities. Six months later, the company still owns those ports and it continues to say it will sell soon and Boeing found a loophole by going through an American subsidiary.

But one thing is for certain, Congress sure loves its smoke and mirrors just to get re-elected. With all there rhetoric on national security, has yet to devote the funds to hire the 2,000 new Border Patrol agents during the next five years it. And in the end, all they muster up is a plan that is merely symbolic because the government lacks the estimated $2 billion to $5 billion to build it.