When the Department of Homeland Security (DHS) was created earlier this decade, one of its goals was to identify and fund projects to better protect government and private facilities that were deemed to be critical infrastructure. Although a large part of the agencyâ€™s budget will go towards operations and initiatives that are outside the purview of security integrators, some of SDMâ€™s subscribers have begun to see an increased level of business from DHS-funded projects.
One such security integrator is Convergint Technologies, a company headquartered in Schaumburg, Ill., that was involved in several DHS-funded projects both this year and in 2005.
â€œMany of the projects that weâ€™ve worked on are seeded through state and local governments,â€ notes Rob Hile, vice president of business development for Convergint, which has 15 offices nationwide. â€œThe work ranges from port projects to municipal projects. Weâ€™re also doing a project for the National Park Service.â€
Despite their diversity, almost all of these projects have one thing in common. â€œTheyâ€™re all trying to secure the perimeter of their facilities,â€ Hile admits. Municipalities, for example, are often interested in controlling access to police stations.
Convergintâ€™s Homeland Security-funded projects most often entail access control and video surveillance. â€œA lot of what weâ€™re doing in the District of Columbia is beefing up monitoring in common areas and tourist areas. Weâ€™re adding night video or the ability to pan-tilt-zoom in critical areas. Weâ€™re also making the video more intelligent based on motion detection and video analytics.â€
A system that includes intelligent video can be set up to alert security personnel and automatically display an appropriate image on security monitoring screens if, for example, it detects that a crowd is gathering or that someone has set something down on the ground. â€œWe can also create virtual perimeters with cameras that alert an officer if someone comes into an area so the officer can track the person,â€ Hile explains.
Homeland Security-funded clients also are more likely than other Convergint clients to use wireless video. â€œThereâ€™s a big movement toward wireless video because often you donâ€™t have infrastructure,â€ Hile explains. â€œIf youâ€™re going to a remote water facility, you need a way to bring the video back.â€
Such systems typically use the 4.9 GHz band, which is reserved for public safety. In addition to providing a more secure connection, the approach also enables multiple agencies sharing the wireless link to view important video images. â€œMultiple agencies use the video from their police cars and helicopters,â€ he says.
Police departments often share another unique requirement, Hile says. â€œA lot of them have interview rooms and theyâ€™re putting in updated surveillance with high-quality video and sound in real time,â€ he says.
OPENING THE SPIGOTAnother security integrator that has done several DHS-funded projects is Henry Brother Electronics of Saddle Brook, N.J.
â€œMost of the Homeland dollars weâ€™ve seen have been aimed at transport and aviation companies and mass transit and a little bit at marine terminals,â€ notes Henry Brotherâ€™s CEO Jim Henry.
Like Convergint, Henry Brothers also has found that DHS-funded clients are more likely than others to use wireless video. In an installation for the Port of Long Beach, for example, Henry Brothers placed wireless video camera atop poles that could be moved easily from one location to another within the port. â€œThere was a need for mobility of the camera position because containers can be stacked in myriad ways,â€ Henry explains.
Henry has seen a shift in where the Department of Homeland Security has spent its money over the past few years. Security integrators â€œonly really saw the beginnings of some of this funding in 2004,â€ Henry reveals. â€œBefore that, money was mostly spent on guard services or consultants. The most immediate thing they could do was throw people at it â€” and when they were deploying technology, they didnâ€™t want to be second-guessed, so they hired reams of consultants.â€
FINDING THE BUSINESSA gating factor for private sector facilities seeking DHS funding is the need to be recognized as â€œcritical infrastructure,â€ which typically requires the entity to submit a request and to undergo a risk assessment process by the DHS. Convergint was able to jump start some of its DHS-funded projects by helping eligible clients submit their request. Although Convergint is only a few years old, several key executives have many years of experience working with the government.
â€œWeâ€™re involved with a lot of customers that weâ€™ve been working with for years, helping them write grant proposals to submit to DHS to get funding,â€ Hile relates. Often those proposals can be written in such a way that once funding is approved, the project doesnâ€™t have to go through a traditional bid process. Hile calls such an arrangement a pre-competed contract. By pre-qualifying contractors that typically have worked with the client before, Hile says, â€œin some cases, the client can go to one of them and say, â€˜We want him to do the work.â€™â€
Although some DHS-funded projects make it onto the Web sites of the General Services Administration (GSA) or those of individual agencies for bidding, that may not be the most effective way of finding such work. â€œMost of our opportunities are discovered through grass roots, visiting and talking to customers,â€ Hile says.
Convergint has won some of its DHS-funded business through a process that Hile calls â€œfollowing the money.â€ By examining Congressional budgets, the company can determine where DHS-funds have been allocated within its region. â€œYou can go to your Congressman and say, â€˜Iâ€™m interested in any funding thatâ€™s happening in my area,â€™â€ Hile advises. Once Convergint learns of an agency that has received funding, Hile says, â€œWe call the facilityâ€™s security officer and ask for a meeting where we introduce our company and capabilities. We tell them we understand they will get funding from the DHS and that weâ€™re interested in helping. Often they ask us to come in and do an assessment and bring back ideas to help shore up security. In some cases, they have ideas in their head; they just need someone to come up with a plan.â€
Often clients are reluctant to put critical infrastructure projects through a bid process because they want to retain a level of secrecy to help keep the project secure. â€œThey may say you have to have security clearance to bid on the project or you must be on the GSA schedule,â€ Hile comments.
Having a unique product offering also can help security integrators win Homeland Security work. Canton, Ohio-based integrator Diebold, for example, receives a lot of interest from government agencies in its Linx intrusion and access control offering, company spokespeople say. As John Stroia, Diebold vice president of government and monitoring solutions explains, Linx offers a high level of redundancy and often includes ground-based radar that can be used to track an intruder who comes onto a military base or other secured area such as a water treatment plant. Often prime contractors on a DHS-funded installation come to Diebold for its Linx offering and ultimately enlist Diebold to handle a more extensive portion of the project, Stroia says.
SIZE CONSTRAINTS?One major challenge in getting DHS funding is the sheer size of many of the projects. Henry notes that his company went public in the 1990s to better position itself to be the prime contractor on port projects and other jobs in the $10 or $15 million range and which at the time were considered large projects.
â€œNow weâ€™re seeing projects that are $200 million in size,â€ Henry says. â€œEven to be a meaningful subcontractor you have to demonstrate big project capability. Until the last couple of years, we have been the prime, but now weâ€™re often in a subcontractor role, even though our piece may be a relatively big part.â€
Some port projects, for example, may entail high-voltage deployment, trenching, and other work that is outside the purview of security integrators. But a large security integrator such as Henry Brothers might be enlisted to handle the security portion.
In an effort to enable smaller companies to benefit from the DHS windfall, many Homeland Security projects have a stipulation that subcontractors should include small businesses or minority-, woman- or veteran-owned businesses. But some stakeholders question whether larger prime contractors are trying hard enough to find qualified small businesses to work with as subcontractors. â€œSome of the larger companies claim theyâ€™re unable to find qualified minority and small integrators and I contend this is nonsense,â€ comments Bill Bozeman, CEO and president of PSA Security Network, an organization of security integrators. There are many smaller security integrators who are not large enough to â€œbond a $150 million job or provide project management for a project in 26 states, but who could be excellent partners,â€ Bozeman says.
One of the goals of the PSAâ€™s new national accounts program is to help connect large contractors with smaller security integrators who meet DHS requirements for small businesses. Among the qualifications for participation in the PSA program are gross revenues of $12 million, access to a UL-listed central station, 24 hour/ 365 day service capabilities and a range of training requirements, such as having at least one certified project manager. The national accounts program is open to qualified PSA members and non-members.
The PSA hopes to educate prime contractors â€œand let them know we have a whole subculture of very highly skilled systems integrators that want a piece of this action â€” and you have the U.S. government saying it wants to make sure we get a piece of the action.â€
Bozeman is not the only critic of how DHS projects have been implemented to date. Roger Cressey, a homeland security expert and president of Good Harbor Consulting of Arlington, Va., levels his criticism not at prime contractors but at the DHS itself. Homeland Security funding has been mostly reactive, he says. â€œThe focus is on the last attack or threat rather than thinking proactively about how new threats are evolving,â€ he charges.
Cressey also believes DHS has â€œfallen down on critical infrastructure owned and operated by the private sector.â€ He would like to see the government take a stronger role in developing risk methodologies to better determine where to spend limited resources.â€ For example, Cressey advocates greater use of software solutions to quantify risk.
Despite such criticism, however, the DHS appears poised to release additional funds for critical infrastructure projects for at least a few more years, although the types of projects funded may change over time.
FACTORS TO AFFECT THE FUTUREPeter Boriskin, director of access control product management for equipment manufacturer Tyco notes, for example, that the DHS has recently begun to put more emphasis on high-rise buildings. â€œTheyâ€™re rerouting some funding to high-rise buildings in many cities, especially landmark buildings,â€ he says.
More opportunities for security integrators also are likely to open up as the government-mandated smart card program known as FIPS 201 begins to take effect this month (see â€œHow FIPS 201 Will Create Opportunitiesâ€, on page 62). Even more opportunities also could materialize, depending on other government actions. â€œOne boon for people in video camera-related business could be if the government goes through with a full fence between the U.S. and Mexico,â€ notes Dean C. Alexander, assistant professor of homeland security, law enforcement and justice administration at Western Illinois University in Macomb, Ill.
Homeland Security initiatives also are likely to have a major impact on technology development in the security market. Such initiatives already are helping to drive strong growth and development in video surveillance software, a market that research firm Frost & Sullivan expects to quadruple by 2011. And as FIPS 201 takes root, its requirements are making an impact on manufacturersâ€™ next generation of access control equipment.
As Sandra Jones, founder of security consultancy Sandra Jones & Company, notes, Homeland Security today is poised to play a role much like that of the space program several decades ago. Just as the space program was the prime driver of technology development then, Homeland Security programs are beginning to be one of the prime drivers today.
Sidebar: What Is Homeland Security?The executive branch has defined homeland security as â€œa concerted national effort to prevent terrorist attacks within the United States, reduce Americaâ€™s vulnerability to terrorism, and minimize the damage and recover from attacks that do occur.â€
The activities that make up that mission are divided into six categories (and 2005 funds were allocated as indicated):
- Intelligence and warning (1 percent)
- Border and transportation security (37 percent)
- Domestic counterterrorism (8 percent)
- Protection of critical infrastructure and key assets (31 percent)
- Defense against catastrophic threats (7 percent)
- Emergency preparedness and response (17 percent)
Note that percentages do not add up to 100 percent because of rounding.
Sidebar: How FIPS 201 Will Create OpportunitiesOne of the biggest Homeland Security opportunities for security integrators is just beginning to materialize. Itâ€™s the Federal Information Processing (FIPS) 201 initiative â€” a government mandate to create a common smart card credential for all federal agencies and to add a higher level of security to the process of issuing credentials to federal employees and contractors. The first phase of FIPS 201, which focuses on protecting access to federal computer networks, takes effect this year, but additional capabilities will be phased in over time. Ultimately, the new smart card credentials also will be used to control physical access to federal sites.
Although some agencies have not yet allocated sufficient money in their budgets to implement FIPS 201 extensively, others had more foresight. â€œSome were very proactive and secured funding this year,â€ notes Rob Hile, vice president of business development for Convergint Technologies, a security integrator headquartered in Schaumburg, Ill., that does a lot of government work. â€œHow an agency uses FIPS 201 in the next three years is up to the agency. Some will use it for logical access first and physical access later. The organizations weâ€™re working with will do physical access first.â€
As Mark Visbal, director of research and technology for the Security Industry Association, explains, some federal agencies will go through the General Services Administration for their FIPS 201 implementations â€” and the GSA has approved only four companies to act as prime contractors for such work. These include EDS, Lockheed Martin, Bearing Point and Maximus.
Agencies can create their own program and select their own contractors, however, as long as the contractors use approved equipment and follow other requirements. â€œI think youâ€™ll find a 50/50 split between those who use the GSA and those who use alternatives,â€ Visbal speculates. â€œIf I were an installing company, I would be knocking on the doors of agencies in my cities.â€
Hile is also bullish about the opportunities. Noting that Y2K generated significant business for systems integrators for about a year, he likens FIPS 201 to a â€œthree-year Y2K for the security industry.â€ Although many projects will not start for a year or so, he says Convergint is planting the seeds now for such work.