Teams vie for SBINet

$2 billion border project carries political and technical risks

Five in the fight

1 | Boeing Co. of Chicago

Top 100 rank: 15

Team members: DRS Surveillance and Reconnaissance Group, Parsippany, N.J.; Kollsman Inc., Merrimack, N.H.; L-3 Government Services Inc., Salt Lake City; Perot Systems Corp., Plano, Texas; Unisys Global Public Sector of Reston, Va.

"The reason you are seeing large defense contractors competing for the SBINet is that it is an extraordinarily complex problem on the scale of a large defense program." | Wayne Esser, program director for SBINet

2 | Ericsson Inc. of Plano, Texas

Top 100 rank: Not listed

Team members: Computer Sciences Corp., El Segundo, Calif.; Fluor Corp., Aliso Viejo, Calif.; Sycoleman Corp. (a division of L-3 Communications Corp.), Arlington, Va.; MTC Technologies Inc., Dayton, Ohio; Camber Corp., Huntsville, Ala.; AEP Networks Inc., Somerset, N.J.; Texas A&M University, College Station; the University of Texas at Austin

Experience: European Union Schengen border security program

"I think with the other teams, we'll see 'Star Wars.' Our approach is conservative with a fully engineered solution." | Douglas Smith, executive vice president of government solutions

3 | Lockheed Martin Corp. of Bethesda, Md.

Top 100 rank: 1

Team members: Not released

"We have experience relative to border security, to biometrics, to transportation, to critical infrastructure protection and to emergency response. All of those in our portfolio are pertinent to SBINet." | Jay Dragone, vice president of Integrated Border Security Systems

4 | Northrop Grumman Corp. of Los Angeles

Top 100 rank: 2
Team members: General Dynamics Corp., Falls Church, Va.; L-3 Communications Titan Group, San Diego; Anteon International Corp. and SRA International Inc., both of Fairfax, Va.; and BearingPoint Inc., McLean, Va.; also architecture and engineering companies L. Robert Kimball & Associates of Ebensburg, Pa.; HNTB Corp. of Kansas City, Mo.

"Northrop Grumman has extensive experience as a lead systems integrator delivering large-scale, mission-critical homeland security solutions for the federal government, including the Department of Homeland Security and law enforcement agencies." | Wood Parker, president of Northrop Grumman Information Technology's intelligence group

5 | Raytheon Co. of Waltham, Mass

Top 100 rank: 6
Team members: Apogen Technologies Inc., McLean, Va.; BAE Systems Inc., Rockville, Md.; Bechtel National Inc., Frederick, Md.; Deloitte Consulting LLP, New York; IBM Corp., Armonk, N.Y.

"The Raytheon team has the right combination of proven border security capability, demonstrated experience managing programs of similar complexity, and teammates that lead in their respective fields of expertise."
| Gene Blackwell, vice president of Raytheon Rapid Initiatives Group

With billions of dollars, major corporate reputations and thousands of contracting jobs at stake, the Secure Border Initiative Network is off to a running start.

Five federal contracting teams laid out their best ideas May 30 on how to use the latest surveillance and networking technologies to continuously monitor and safeguard U.S. borders with Mexico and Canada.

Now it's up to the Homeland Security Department to evaluate the proposals and pick the winning team for the $2 billion project, a task it expects to do by September.

It is a task that brings greater-than-usual challenges, both because DHS officials want a rapid deployment and because it is such a high-profile program, a centerpiece of Secretary Michael Chertoff's border control strategy, according to several industry analysts.

At a time when Congress is heatedly debating border control and illegal immigration, the SBINet surveillance program is likely to get lots of attention in the media at each step toward implementation.
That SBINet is politically risky, has a prominent media profile and is on a fast track for implementation adds up to a high-pressure situation, said John Slye, senior analyst for Input Inc. market research firm in Reston, Va.

"The risk for failure is a very public risk," Slye said. "This is the stuff of the evening news."

Players line up

Four of the competing teams are led by some of the biggest companies in federal contracting: Boeing Co., Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co.

The four are among the largest 15 contractors for federal IT services in 2006, according to Washington Technology's Top 100. Much of their revenue comes from defense contracts.

A fifth team is headed by Plano, Texas-based Ericsson Inc., which is the U.S. subsidiary of a Stockholm company and a provider of network services to both businesses and government entities. Its SBINet bid is one of its earliest major attempts to win a large U.S. government contract.

It is possible, though unlikely, that one or more teams may be judged noncompetitive by DHS before the award is made. The department said it will call in the teams deemed to be competitive for an oral presentation sometime in the next several months.

No team is the obvious frontrunner. Ericsson has been called the dark horse, because it was a latecomer in announcing its intentions and because its U.S. subsidiary has about $2.4 billion in annual sales vs. $22 billion for Raytheon; $30 billion for Northrop Grumman; $37 billion for Lockheed Martin and $55 billion for Boeing.

Ericsson's parent company has about $19 billion in annual sales; however, it is not on the Top 100 list of federal IT services contractors.

Ericsson touts its company culture as distinct from that of the other teams, a result of the company's strong commercial focus, said Douglas Smith, executive vice president of government solutions for Ericsson Inc. "Our culture is driven by the need to deliver the product at the right price, on time," he said.

Ericsson has an extensive background in creating wireless networks for cellular phone service providers; those networks are similar to what is needed for SBINet, Smith said. The company's wireless network also is in use in the European Union as part of the Schengen secure border surveillance project.

While Ericsson's commercial experience may be a boon, the other SBINet competitors' depth and breadth of experience in delivering major government programs is a huge factor in their favor, Input's Slye said.

"In some ways, you can root for the underdog [Ericsson], but it is not necessarily a leg up for Ericsson to be competing against people who have been building systems for the government for decades," Slye said.

Ericsson would have to be "very persuasive" to overcome the advantages and extensive experience of Boeing, Lockheed Martin and Northrop Grumman and, to some extent, Raytheon, said Andrew Krepinevich Jr., executive director of the Center for Strategic and Budgetary Assessments, a defense think tank in Washington.

Krepinevich said the Secure Border network project may be getting too focused on rapid deployment.
"It is perplexing to me why they don't invite a number of bids and prototyping, so they can test it before they apply it on a grand scale," he said.

SBINet is being rushed "in the sense that there are a lot of moving parts involved in solving the problem," he said.

Some details abound

Leaders of the five teams are keeping their proposals under wraps for now because of the highly competitive nature of the proposals. But a few details have emerged.

At least three of the competing teams ? Boeing, Ericsson and Northrop Grumman ? include units of L-3 Communications Corp. of New York.

Boeing's teammate, L-3 Government Services Inc. of Salt Lake City, was a contractor for the controversial Integrated Surveillance Intelligence System at the southern border, said Wayne Esser, program director for SBINet for Boeing.
Federal audits have found alleged mismanagement in that surveillance system dating back to 1998. Problems include lax government oversight, incorrect cameras and improper installments.

However, L-3 officials, who in 2002 bought the original company, defended their actions and asserted that the audit allegations were unfounded.

Congress, addressing those problems, said that in allocating $115 million for SBINet in fiscal 2007, it would withhold $25 million until the department furnishes a strategic plan and establishes performance metrics to avoid repeating the mistakes cited in the audits.

Boeing's Esser said that the company values L-3's experience in border surveillance and concluded that L-3 had made substantial investments to correct deficiencies in the system. "At the end of the day, L-3 acted responsibly," he said.

Several teams using L-3 units seem to have made similar assessments, and concluded they need L-3 on their teams, Input's Slye said.

"If you're trying to do this with existing technologies, as DHS is trying to do, you're kind of stuck with what is available, and so are all the players," Slye said.

L-3 officials did not respond to a phone call.

Northrop Grumman's team partners include large systems integrators Anteon International Corp. and SRA International Inc., both of Fairfax, Va., BearingPoint Inc. of McLean, Va., and General Dynamics Corp. of Falls Church, Va.

However, Bruce Walker, Northrop Grumman's director of homeland security, said those companies are on the team not for their systems integration capabilities but as subject matter experts in specific areas, which he declined to specify for competitive reasons.

Northrop Grumman's team was "already involved pretty significantly" in developing a solution for the $2.5 billion America's Shield Initiative, a border surveillance system that the government was developing to replace the intelligent surveillance system, Walker said.

DHS in August 2004 held an industry day for the program, however, no request for proposals was issued, America's Shield was canceled, and its mission was folded into SBINet.

Lockheed boasts experience with the Coast Guard's Deepwater initiative, which has domain awareness, command and control, and surveillance components.

Raytheon is emphasizing its experience as prime contractor for the System for Vigilance of the Amazon program, a surveillance system in Brazil that covers more than two million square miles, as well as border protection efforts in the Ukraine and Middle East.

Staff Writer Alice Lipowicz can be reached at alipowicz@postnewsweektech.com.

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