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Business bonanza Original Source Link: (May no longer be active)
http://www.usatoday.com/news/nation/2002/07/10/homeland-security.htmhttp://www.usatoday.com/news/nation/2002/07/10/homeland-security.htm
07/11/2002 - Updated 08:04 AM ET
Businesses see bonanza in homeland security
By Jim Drinkard, USA TODAY
WASHINGTON — As government workers browse the booths at a high-tech expo here, a large placard declares, "Homeland Security and Defense is SERIOUS BUSINESS." Unstated is another truth: It's also serious money. The Sept. 11 terrorist attacks on the United States have created a wave of new government spending reminiscent of the space program in the 1960s or the savings and loan bailout of the 1980s. New federal outlays for homeland defense are expected to hit $57.2 billion by next year, and President Bush has made it clear the investment will continue for years to come. In a faltering economy, it's one of the few things growing.
That has gotten the attention of thousands of businesses claiming to have the solution to the government's security needs. Companies ranging from global giant IBM to tiny Nasatka Barriers, a Maryland manufacturer of vehicle blockades, are thronging the capital with brochures and demonstrations in hand.
"There is a gold rush," says Lee Hamilton, a former chairman of the House Intelligence Committee who's still active in national security issues. "There is a tremendous market out there for security devices that has exploded in the past few months."
As with any gold rush, the homeland security bonanza is likely to attract pretenders along with patriotic entrepreneurs. It will be up to government agencies at the federal and local levels to exercise care in their buying decisions.
"There have been a lot of folks who have risen to what they see as an opportunity, who offer a product that may or may not do what they say it does," says Douglas Eaton, marketing director for NBC Team Ltd., maker of several products that combat bioterrorism.
President Bush's homeland security director, Tom Ridge, welcomes the capitalist impulse. "The entrepreneurial spirit is a potent weapon against terrorism," he told the Electronic Industries Alliance, a high-tech trade group. "We look to your enlightened self-interest. We want you to do well by doing good."
Most of the new money is still finding its way through Congress. When it does begin to reach the marketplace in a few months, much of it will flow to state and local governments. Most of the money spent so far has flowed through federal hands.
"Since Sept. 11, the government has been the predominant source of our business," says John Centeno of Solar Security Films, a company that applies anti-shattering film to building windows. "As people become aware of the billions of dollars assigned to homeland security, more and more are going to try to get a slice of that."
The film, designed by 3M to keep occupants safer in the event of an explosion, has been applied to 17 buildings on Capitol Hill, to the windows at Reagan National Airport and to MacDill Air Force Base in Tampa, home of the Pentagon's Central Command.
Centeno was in Washington last month trolling for more government business, along with dozens of other companies at the Homeland Security Summit and Expo. Such trade shows are becoming common in the nation's capital: on Wednesday, 54 mostly small companies crowded into a Senate office building's auditorium to show off their wares.
Many products developed for other uses are finding a place in the new market. "Everybody is looking at their products and seeing if they can redefine them and market them as a homeland security item," says Ron Kaufman, a Washington lobbyist.
Varian Medical Systems, which has long made X-ray equipment for hospitals, was at last month's expo showing off a mobile unit that can be used to see inside trucks and shipping containers at ports or border crossings.
"U.S. Customs has been talking about cargo screening for years," says Chuck Stirm, a company salesman. Now, "there are purchase orders stacked on desks this high," he says, holding his hands a foot apart.
Nearby, Telephonics Corp. displayed an oscillating flat panel mounted on a tripod that uses Doppler radar to detect human movement over broad open spaces. Company officials had demonstrated the $175,000 device two days earlier for intelligence and defense officials. They set it up at Reagan National Airport to show how it could trigger alarms if someone tried to sneak onto a runway from a small boat in the Potomac River. Samuel Evans, the company's Washington lobbyist, says Telephonics hopes to market the radars to military bases, airports, nuclear plants and the Border Patrol, among others.
John Scolaro's product couldn't fit into the expo's exhibit hall, so he brought a computer display of a vehicle trying to crash through Nasatka's traffic gate. The barriers, which allow only authorized vehicles to enter a parking lot or building, are in use around the U.S. Capitol.
'How much is your budget?'
"Before Sept. 11, the question was how to persuade a client to buy," Scolaro says. "Now the question is, 'How much is your budget?' "
Viisage Technology is opening a new Washington office to tout its software. It captures an image of a person's face, then compares it to a database of suspects on a watch list — an electronic version of the police mug shot book. First developed to help gambling casinos keep out cheaters, the technology has promise for screening airline passengers or crowds coming into large events like the Super Bowl, says marketing vice president Cameron Queeno.
"We've heard over the last months that there are terrorists in this country, living among us," he says. "Anything we can do to identify who they are and what they are up to is a step toward enhancing our homeland security." The cost? "A couple of million bucks per airport," he says.
E-Z-EM, a health care equipment company in New York, rented a Washington hotel meeting room recently to demonstrate a tent-like enclosure that can be placed over a "dirty" radiological bomb or other explosive device. If the bomb detonates, the tent's tough fabric expands and holds in shrapnel as well as radiation or other toxins. A foam decontaminant neutralizes biological terror agents like anthrax or mustard gas. The recently declassified device, already used in Canada, was quietly deployed at the two major U.S. political party conventions in 2000 and the Super Bowl in New Orleans.
The company also is selling sponges soaked with decontaminant, for use by firefighters, police and emergency medical personnel who respond to a bioterrorism scene. The U.S. Capitol has bought 20,000 gas masks to issue to lawmakers, staff and tourists in case of a terrorist emergency. And there's a boom in sales of potassium iodide tablets, which can protect the thyroid gland from absorbing dangerous levels of radiation if someone is exposed to a "dirty bomb."
The marketing frenzy extends beyond items normally associated with terrorism defense. A team from Kurz and Co., a German business that makes hologram-like foil seals, says its high-tech appliqués could be used on U.S. currency to make it harder to counterfeit. That might take away an avenue of economic disruption that terrorists could exploit, since American money is among the world's easiest to fake, says company official John Tye.
"Guatemala has more secure banknotes than you do," he says. "So does Zaire."
Seeking an audience
The company has hired the venerable Washington lobbying firm of Verner Liipfert to push its idea of affixing hologram-like seals to $100 and $50 bills — among the most counterfeited — and to promote the technology to make documents like passports, visas and pilots' licenses harder to duplicate.
"We don't want to seem like 9/11 opportunists," says Kurz spokesman Robert Skelly, "but it has created an environment where the American government will be a little more accepting of change."
The homeland-security gold rush is creating a bottleneck in Washington. Companies are clamoring to be seen by the people who matter. Congressional aides have filled their calendars with meetings, and Ridge's office has been besieged with requests.
"There's bound to be frustration when you've got 1,000 companies that believe their technology is going to solve everything, but they can't link up" with the appropriate government office, says John Marburger, Bush's science adviser.
IBM security services manager Rusine Mitchell-Sinclair says even a Fortune 500 company is challenged to keep up with the fast-evolving marketplace. "It's been a moving ball, who's in charge," she says. "It is a bit of an adventure."
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