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9/20: Boeing Wins $70 Million Deal For Building Border Wall
Released 30 September 2006  By Griff Witte - Washington Post

Boeing Wins Deal For Border Security

By Griff Witte
Washington Post Staff Writer
Wednesday, September 20, 2006; Page A01

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/19/AR2006091901715.html

The company's efforts would be the basis of the government's latest
attempt to control U.S. borders after a series of failures. The
contract, part of the Secure Border Initiative and known as SBInet,
will again test the ability of technology to solve a problem that
lawmakers have called a critical national security concern. This time,
the private sector is being given an unusually large say in how to do
it.

Boeing sold its plan to the Homeland Security Department as less risky
and less expensive than competing proposals that would have relied
heavily on drones for routine surveillance work. Boeing plans only
limited use of small unmanned aerial vehicles that could be launched
from the backs of Border Patrol trucks when needed to help pursue
suspects.

The system is to be installed first along the Mexican border in an area
south of Tucson known to be a key crossing point for illegal
immigrants. The company has said it can deploy the system along both
borders within three years.

The public announcement of the award is planned for tomorrow. Several
congressional and industry sources yesterday confirmed that Boeing had
defeated four other companies in one of the most closely watched and
intensely fought contract competitions this year. The sources spoke on
the condition of anonymity because of the sensitivity of the
competition. Homeland Security spokesman Larry Orluskie said the
department was "really close" to making an award.

Boeing officials declined to comment, pending official notification. In
an interview this month, Boeing executive Wayne Esser said that despite
the company's aviation experience, it wanted to keep its border
surveillance systems on the ground. "The aerial platform just goes off
the map from a cost standpoint," he said.

Homeland Security has been criticized harshly in recent years for
initiatives that have either failed or far exceeded their budgets. In
one case, cameras that the department installed on the borders broke
down in bad weather.

"The administration has spent $429 million of the taxpayer's money to
try and secure our borders with two already-abandoned border security
programs," said Rep. Bennie Thompson (D-Miss). He expressed concern
that the same thing will happen to SBInet.

Mindful of that record, Boeing emphasized that all its technology has
been proven to work. "The low-risk approach is probably going to carry
weight here," Esser said.

>From the beginning, department officials told industry leaders that
they wanted immediate results. The contract proposed giving the private
sector wide latitude in helping U.S. Customs and Border Protection
figure out the right combination of technology, infrastructure and
personnel needed to stop immigrants, terrorists and criminals from
illegally crossing into the United States.

Deputy Homeland Security Secretary Michael P. Jackson said this year
that he wanted the companies "to come back and tell us how to do our
business."

SBInet has been regarded all year by many industry executives as a
critical prize, since the Homeland Security Department's budget
continues to boom and no single company has emerged to dominate the
market.

As a result, there was pitched competition among defense companies for
a contract that is estimated to be worth about $2.5 billion over the
next four years. The contest included five prime contractors --
Lockheed Martin Corp., Northrop Grumman Corp., Raytheon Co., Ericsson
Inc. and Boeing. Each rounded up dozens of subcontractors, bringing a
wide variety of defense and technology firms into the competition.

Boeing's subcontractors include a Washington division of L-3
Communications Holdings Inc. and a Reston division of information
technology firm Unisys Corp.

Boeing has been one of the Defense Department's largest contractors for
decades, and has been trying to win Homeland Security awards since the
department was created.

In pursuing this contract, Boeing pointed to its work installing
explosive-detection systems at more than 400 airports in less than six
months following the Sept. 11, 2001, terrorist attacks. But that
contract was criticized by the Homeland Security's inspector general's
office, which found that Boeing received $49 million in excess profit
on a deal that was supposed to be worth $508 million but ballooned to
$1.2 billion. Investigators also found that Boeing had subcontracted 92
percent of the work, and that the machines had high false-alarm rates.
The company disputed those findings.

Winning SBInet is considered an important victory for Boeing as it
seeks to overcome a number of recent setbacks, including a scandal in
which a Pentagon official admitted favoring the company in exchange for
a job, and the loss this summer in the competition to build the next
U.S. manned spacecraft.


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