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Boeing Is Awarded Border Contract

September 22, 2006|Peter Pae | Times Staff Writer

From their Huntington Beach facility, Boeing Co. engineers crafted a plan to line the Mexican border with 1,800 towers equipped with sensors that can detect when a person steps onto American soil.

Infrared cameras will sense the body heat of possible intruders, and radars will track vehicles that may carry illegal immigrants and drugs into the United States. On Thursday, Boeing's plan won a key contract, one that could lead to a virtual fence along 7,500 miles of the U.S.' borders with Mexico and Canada.

Homeland Security officials said Thursday that the initial three-year contract was worth $67 million and called for Boeing to build its tower-based system along a 28-mile stretch of the border near Tucson. But analysts said the project could be expanded and total more than $2.5 billion.

Boeing beat out three of the nation's largest defense corporations and a Swedish cellphone maker for the contract -- part of a larger homeland security initiative to stem the flow of illegal immigrants into the country.

When the project is completed, Boeing said, its towers would leave little of the now-porous borders undetected, creating a high-tech fence longer than the Great Wall of China.

"What we are looking to build is a 21st century virtual fence," Homeland Security Secretary Michael Chertoff said at a news conference announcing the contract.

The contract represents a much-needed win for Chicago-based Boeing, which in the last year has suffered several setbacks. It lost a bid to Lockheed Martin Corp. to build the next-generation space capsule for NASA. A chunk of a multibillion-dollar spy satellite program was taken away by the federal government because of cost overruns.

"This is huge for Boeing," said Matthew Farr, senior homeland security analyst for technology consulting firm Frost & Sullivan. "They should be extremely happy."

The contract isn't without controversy. Some members of Congress have called it a waste of money, noting that two other unsuccessful efforts -- along Mexico -- to control the borders with high-tech equipment have cost taxpayers more than $500 million.

Sen. Patrick J. Leahy (D-Vt.) criticized plans to build a barrier along the Canadian border. "I have heard some cockamamie ideas in my time in the Senate, but this one rises to the top," he said in a statement.

Federal officials declined to say how much the full-scale system would ultimately cost. But analysts said that eventually the security initiative could be worth more than $8 billion as the U.S. looks to expand the project to secure the Eastern and Western coastlines.

The initiative represents a broader U.S. effort to toughen security along the Canadian and Mexican borders. That plan includes constructing 700 miles of fencing along several sections of the 2,000-mile border with Mexico. In 2005, Border Patrol agents arrested more than 1.1 million illegal immigrants, according to U.S. Customs and Border Protection.

Homeland Security officials hope that deploying sensor technology could dramatically help more than 11,000 Border Patrol agents detect and apprehend illegal immigrants.

The contract became a priority for defense companies as the Pentagon began looking at curtailing spending amid the rising costs of military operations in Iraq and Afghanistan. To make up for the slowdown, defense contractors have been focused on winning nontraditional defense work such as border security, large-scale facilities management and maritime surveillance.

After growing by more than 10% annually since the Sept. 11 terrorist attacks, defense spending gains could slow to about 3% to 5%, some analysts estimate.

"As the availability of money for weapon systems begins to decline, the companies are looking for ways to apply their skills in nonmilitary fields," said Loren Thompson, a defense policy analyst at the Lexington Institute, an Arlington, Va.-based think tank.

Defense companies see a need for border security by other nations trying to keep out illegal immigrants.

"There is a large global market for border security," Wayne Esser, Boeing's "capture team leader" for the contract, said before the award was announced. "The winner of this is going to be well-positioned for that market."

Boeing considered the contract so important that last month James Albaugh, head of the company's $30-billion defense business, gave the oral presentation himself to Homeland Security officials.

Boeing's toughest competition came from Bethesda, Md.-based Lockheed, the nation's largest defense contractor, and Century City-based Northrop Grumman. All three companies have experience in developing and managing large, complex military weapon systems.

The three companies suggested using an array of sensors to monitor and detect border crossings but had different proposals on how they would be used.

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