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.

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