Government Executive - Authors - Zack Phillips

Staying On Track

Zack Phillips — Thu, 15 Nov 2007 00:00:00 -0500

Keeping tabs on foreign visitors as they arrive has been a surprising information technology success. Noting their departure promises to be much harder.

Asa Hutchinson likes to joke about the time he had 30 days to spend $350 million.

It was the end of August 2003, and Hutchinson was the first undersecretary of Border and Transportation Security at the newly formed Homeland Security Department. His directorate's most pressing priority was meeting a congressional mandate to install by the end of the calendar year a system to track the entrance of foreign nationals through the nation's 115 international airports and cruise ship terminals at 14 seaports. The system was called US VISIT. And not only did DHS need to have US VISIT up and running by the end of the year, but it had to spend its 2003 appropriation for the program-which actually totaled about $362 million-by the end of the fiscal year, Sept. 30.

"That was a tight deadline," recalls Hutchinson, now a partner at the Washington law firm Venable LLC and chief executive officer of the Little Rock, Ark.-based Hutchinson Group. "We had a lot of detractors who said it couldn't be done."

The department met the deadline at the end of 2003, as well as similar incremental deadlines in 2004 and 2005.

US VISIT became the rare, behemoth DHS program-the prime contract held by Accenture Ltd. is valued at several billion dollars-to come in on time and within budget.

But now the program faces an uphill climb to a new pressing deadline: installing the exit part of the system at all American airports by December 2008. This means fingerprinting every non-U.S. citizen leaving the country, as well as checking their photographs and names against terrorist and criminal databases. It's a complicated undertaking. Congress and the Government Accountability Office have voiced strong concerns that DHS has not done the necessary planning, while airlines-which, under DHS' current proposal, would operate the system-are unabashedly opposed. Yet, department leaders steadfastly contend they will finish on time. "Our plan is to begin the process of implementation next year and have it completed by the end of 2008," DHS Secretary Michael Chertoff said at a Sept. 5 hearing before the House Committee on Homeland Security.

The mandates for what has become US VISIT actually predate the terrorist attacks of Sept. 11, 2001. The 1996 Illegal Immigration Re-form and Immigrant Responsibility Act first called for an automated entry-and-exit control system to collect biographic information on immigrants entering and leaving the United States. The law was passed in response to the 1993 bombing of the World Trade Center and the realization that visa overstays, a large part of the illegal immigration problem, posed a security threat. After implementation delays, Congress passed another law in 2001 requiring entry-exit systems by the end of 2003, 2004 and 2005-for airports, seaports and land points of entry-and two laws passed in 2002 updated the requirements. Those updates included a mandate for a system to record biometrics-personal, physical characteristics such as fingerprints or digital photographs-of incoming visitors.

After years of delays, DHS began to deliver the system starting in 2003. The result was a success story for the department, according to just about every observer, including the 9/11 commission. Today, the entry portion of US VISIT is operating at almost 300 points of entry and more than 200 visa-issuing posts. Since January 2004, it has processed more than 76 million visitors and caught 1,800 immigration violators and people with criminal records. In fiscal 2006, the system collected the biometrics of 2.8 million travelers.

Here's how it works: When a foreigner arrives at an airport, seaport or land point of entry, a Customs and Border Protection inspector takes a digital photograph of the visitor and uses a digital scanner to take inkless prints of the two index fingers. That biometric information is used to verify that the visitor is the same person who received the visa and to check his or her identity against criminal and terrorist watch lists. That process also happens overseas at American consular offices, which collect finger scans and digital photographs when issuing visas.

Stewart Verdery, who worked for Hutchinson as assistant secretary for Border and Transportation Security policy from 2003 to 2005, says that what got US VISIT moving was a decision by then-DHS Secretary Tom Ridge in 2003 to break the project into manageable increments. "The problem was no one could figure out how to deploy everything at once," recalls Verdery, now a partner at Monument Policy Group LLC, the Washington-based consulting firm he founded.

"We didn't build the whole thing, but we built what was promised and doable at the time. . . . [Ridge's attitude was] 'Let's start building this thing, understanding it's not complete. But if you don't start somewhere, you'll never start.' "

To illustrate the importance of incremental building, Verdery provides the example of fingerprint scanners: US VISIT began in 2003 with two-print scanners and, four years later, is in the process of updating the system to more accurate 10-print scanners. "People said, 'But [scanning] 10 fingerprints is better,' but there was no 10-print device that would work at the time," Verdery says.

"For years, people let the perfect be the enemy of the good, instead of saying 'We're going to do something that has a big-but not perfect-impact on security.' "

An even bigger impact is expected when DHS completes the more difficult exit portion for US VISIT. It might seem strange to read that border security relies on checking the identity of people leaving the country. But comprehensively checking the identity of all departing foreign nationals is the only way to figure out who has not left. Those overstaying their visas represent 30 percent to 50 percent of the illegal immigrants in this country, according to the Congressional Research Service. Twelve terrorists in the country between 1993 and 2001 had overstayed their visas, including four of the Sept. 11 hijackers.

The exit portion is fraught with problems. DHS officials have given up on producing a biometric-based exit system for land ports in the short term, calling the endeavor too complex. And plans for implementing the exit component at airports, where more than 91 percent of all travelers from countries of interest arrive, have been criticized from all sides.

Clashing With Airlines

The department has announced plans to start putting in the airport exit system by June 2008 and complete it by that December. DHS plans to release a notice of proposed rule-making, laying out a draft proposal for how the exit system will work, by the end of this year. Next year, officials say, DHS will refine the project plan, incorporate feedback from the comment period and align the US VISIT exit system with other air passenger data systems. DHS would not make Robert Mocny, US VISIT program director, available for an interview. But through a statement e-mailed from a spokeswoman, Mocny said, "US VISIT is on schedule to implement biometric air exit procedures by the end of 2008."

Outside observers are skeptical, to say the least. Randolph C. Hite, the director of IT architecture and systems issues at the Government

Accountability Office, was sharply critical of US VISIT in an August report, lamenting the absence of more detailed planning documents the program was to have submitted to Congress. And when asked at the June 28 hearing about DHS' goal to finish the airport exit component by the end of 2008, he said he had not seen anything "to give me any confidence to show that that's realistic."

"Throwing out dates like that are nice to have as goals," he continued. "[But] there are too many unknowns that haven't been answered yet in my view to even have any confidence as to an end date on this thing."

The biggest unknown is the cooperation of airlines. DHS' current plan calls for airlines to operate the US VISIT exit program, fingerprinting and checking the identity of departing passengers at the ticket counter. But representatives of the air carriers are vehemently against this idea, and say DHS came up with the plan without listening to their input. "It's an out-of-date idea that doesn't make a lot of sense," says John M. Meenan, executive vice president and chief operating officer of the Air Transport Association, a trade organization for U.S. airlines. "It flies in the face of the direction industry has been heading."

Meenan is referring to the movement among airlines to encourage passengers to check in for flights online or away from the ticket counter to decrease congestion and increase speed. ATA says 30 percent of passengers check in electronically, and air carriers hope that method will become more common in the future. Passengers leaving the country still must present passports or visas at the ticket counter before going through the security checkpoint, but ATA officials say installing US VISIT exit procedures at the ticket counter goes against the investments that airlines are making to move passengers online.

ATA officials, and members of the House Homeland Security Committee, also say that fingerprinting foreign nationals is a law enforcement program and therefore should be handled by federal employees. DHS officials point out that under current law, airlines already have to help with certain security measures, such as providing passenger data and collecting I-94 immigration arrival-departure forms. Still, Verdery says he wouldn't be surprised if airlines' liability concerns eventually pushed the disagreement to court.

"We remain concerned that the department is offloading its federal immigration responsibilities onto the air industry and proceeding without an active dialogue with stakeholders," said Rep. Bennie Thompson, D-Miss., House Homeland Security Committee chairman, in an October e-mailed statement. "An unworkable system delayed by lawsuits and poor planning does not serve the security interests of our country."

No Logical Location

Meenan and ATA officials favor installing the system at security checkpoints, but that, too, has drawbacks. More procedures presumably would add more congestion, and DHS wants Transportation Security Administration screeners to concentrate on scanning passengers for weapons, not implementing immigration control. There is no obvious place to put US VISIT exit checks. American airports, unlike other airports around the world, were not built to accommodate passenger departure controls. But the system must be installed in a location through which all passengers must pass.

This was the lesson learned after more than three years of biometric exit pilot tests at 12 airports and two seaports, DHS officials say. "The technology works and it works well, but the procedures did not," Mocny said at the June 28 hearing. "Travel compliance with the pilots was low. Unlike entry, with no infrastructure in which [to] imbed exit procedures, travelers had to change their behavior independently."

There is one other possible location for US VISIT exit procedures, Verdery says: the kiosks for Registered Traveler, a DHS program that speeds the passage of prescreened passengers through security checkpoints. The kiosks already have biometric-enabled screening devices, are not operated by airlines and private sector firms have offered to operate the exit program there for a small fee. Regardless, he says, DHS should have started installing the component two years ago. "The department stalled on this for two years and didn't do anything, and then it came out with a proposal without getting any type of buy-in from [air] carriers," he says. "I think they've gotten to the point where there's not enough time left in this administration to force [airlines] to do it."

Yet Mocny remains resolute. And he has one statistic on his side: Even detractors must admit that the program has been on time and under budget for the $1.7 billion worth of work it has done in the last five years. "When we were given a date certain to do entry-Dec. 31, 2003, 2004, 2005-we met or beat every one of those dates," he said at the June 28 House Homeland Security hearing. "Those were often seen as perhaps not realistic, but we applied ourselves and we applied resources, and we were able to get those dates met."

]]>

DHS office seeks to coordinate anti-bomb efforts

Zack Phillips — Mon, 12 Nov 2007 00:00:00 -0500

"Every time my phone rings at an odd time, I wonder if it's started," he says. Payne, chief of the Office for Bombing Prevention at the Homeland Security Department, is referring to terrorist bombings in the United States. For all the attention on potential dirty bombs, biological agents and chemical weapons, the tactic government leaders most expect terrorists to use in this country is the conventional explosive. "The attack weapon of choice still is the IED," Homeland Security Secretary Michael Chertoff said at a Sept. 10 hearing before the Senate Committee on Homeland Security and Governmental Affairs.

Payne has personal experience with improvised explosive devices; he served more than 20 years in the Navy, working in the explosive ordnance disposal field, where he eventually was commissioned as chief warrant officer in 1998. Like many EOD officers, Payne is tight-lipped about the details of that work, but he is vocal about what his office is doing now.

The Office for Bombing Prevention is part of the Infrastructure Protection section of DHS' National Protection and Programs Directorate. One of its primary responsibilities is to coordinate all Homeland Security efforts on bombing, which includes 100 different programs, offices or activities.

Click here to read Zack Phillips' full story on the Office of Bombing Prevention from the Nov. 1 issue of Government Executive.

]]>

Video: A Feel For Numbers

Zack Phillips — Tue, 06 Nov 2007 00:00:00 -0500

feature story in the Oct. 1, 2007, issue of Government Executive. After all, the Labor Department has the Bureau of Labor Statistics, the Commerce Department has the Census Bureau and the Bureau of Economic Analysis, and the Agriculture Department has the National Agricultural Statistics Service. But The State Department doesn't have its own in-house statistics office. Now Phillips has followed up with video presentation looking at how the federal government has used -- and abused -- data in countering the terrorist threat: ]]>

Erasing IEDs

Zack Phillips — Thu, 01 Nov 2007 00:00:00 -0400

The Office of Bombing Prevention doesn't cut red and green wires, but it tries to cut red tape for those who do.

Sometimes when he hears the telephone, Charlie Payne has a scary thought.

Coordination is a word used frequently in the homeland security world, and it is largely intangible. But Payne has his own concrete sense of what it entails.

"What it means is first of all having some sort of system to understand what the gaps are [in preparedness and response capabilities], and then having some sort of process . . . to understand the progress you're making toward filling those gaps," he says.

He is speaking not just about capabilities at DHS, but of local bomb squads across the nation. Such units usually are not a city's top priority, Payne says. About half are collateral duty-meaning members do other work during the day, unless an explosives-related incident arises. Payne cites as an example one major city where the bomb squad lacked Internet access when the bombing prevention office first began working with them.

The work Payne's office does in assessing various national, state and local bomb squads is useful not only to compare governments' capabilities to those of terrorists, it also helps bomb squads convince budget authorizers that they need certain improvements. "We can do an interview [with a bomb squad] in one and a half hours and leave them with stuff-PowerPoints, white papers-that will help with their budgets for years," he says.

That is significant because some parts of bomb detection are expensive. Payne says one type of explosive detection robot costs about $250,000 apiece.

"If you go to a municipality and they don't have [bomb detection] robots, then maybe the coordination piece is ensuring the state homeland security adviser understands the value of having robotic capability for bomb squads," he says. "With a matter of, literally, some phone calls or a table-top exercise-some low-cost stuff like that-maybe they can program some grants funds and get some robots."

Funds have been tight for the Office of Bombing Prevention. In 2004, its budget was $14 million. It fell to $13 million in 2005 and to about $7 million in 2006. "I think the amount of attention it's receiving is increasing, and I think the department recognizes it and is doing what it can," Payne says.

That will include accelerated and bolstered anti-IED research in fiscal 2008, Chertoff said at the September hearing. Retired Rear Adm. Jay M. Cohen, DHS' undersecretary for science and technology, has created an integrated product team to help steer basic and applied research in explosive countermeasures. The Office of Bombing Prevention and the Secret Service co-chair the team.

Much of this research is aimed at what experts call getting "left of boom"; if one imagines the activities that culminate in a bombing as a horizontal chronology, most occur far before-or left of-the explosion. Because IEDs are so easy to build and place and so difficult to detect, explosive experts increasingly see disrupting the terrorist network that acquires the raw materials and builds the device-and even preventing radicalization-as an essential part of counterbombing efforts.

Part of that endeavor is Trip Wire, an unclassified Web portal the office created to collect information on terrorist tactics and interests and disseminate it to those who could use it to prevent attacks-not only local bomb squads, but any vetted government official, and eventually some from the private sector as well, whose awareness could help thwart terrorists.

"We have to move further and further left," Payne says. "If we've already got an assembled, large vehicle bomb, then our ability to prevent or interdict and stop that attack is on the order of hours and minutes, maybe, if we're lucky. We've got days, months, maybe even years to stop an attack if we can put those pieces together, illuminate the network . . . and stop the attack at its very genesis."

]]>

Homeland Security issues contract for presidential transition planning help

Zack Phillips — Wed, 03 Oct 2007 00:00:00 -0400

DHS awarded a sole-source contract to the Council for Excellence in Government to conduct a range of activities aimed at ensuring a seamless transition to new leadership, according to a procurement notice posted online last week. The one-year contract is worth $305,000, and asks the organization to create an advisory blue-ribbon group, hold workshops for key governmental leaders and help with a Homeland Security transition plan.

"A presidential transition is a very significant event. You basically have a complete changing of the political guard pretty much at one time," said Patricia McGinnis, the council's president and chief executive officer. "When it comes to national security and homeland security, obviously a smooth transition -- having people who are coming into place already understanding what the existing processes and protocols and communications [are] around any kind of threat or emergency -- is very important."

The bipartisan blue-ribbon panel will help guide the work. The council will run 30-person, interactive workshops beginning next July, at which federal officials and other experts will go through potential scenarios and discuss a curriculum of what they need to know to make the transition smooth.

At a minimum, incoming appointees should know what information they need in an emergency, the people with whom they need to communicate and the method of communication, McGinnis said.

"As we saw with Hurricane Katrina, you really have to have people understanding their roles and responsibilities before something like that happens in order to be able to protect people and save lives," she said.

The procurement notice said the council was the only responsible source that could meet the department's requirements.

The council releases the quadrennial Prune Book, a guide for political appointees. The organization also helped orient presidential appointees at the request of the Clinton and Bush administrations, McGinnis said. And the council ran the pilot version of the DHS Fellows program, which convened up-and-coming senior managers from across the department. Finally, the nonprofit worked with government groups, businesses and citizens to produce the Readiness Quotient, an online tool that measures disaster preparedness.

Former DHS secretary Tom Ridge, former Federal Emergency Management Agency administrator James Lee Witt and 9/11 commission co-chairman Lee Hamilton are among the council's trustees.

McGinnis said the organization typically helps incoming political appointees in the midst of a transition rather than this far in advance, and she commended DHS for asking for this work 15 months before the actual changeover.

Many observers are concerned about how DHS will handle the coming transition, because it is the first change in administrations for a department that already has suffered from a high level of turnover in leadership positions. According to a June article in National Journal, this problem is exacerbated by the department's high ratio of political appointees -- who likely will leave when this administration ends -- to career employees, who will stay.

The 180,000-employee DHS had more than 360 political appointees in September 2004, compared to only 64 appointees at the 235,000-person Veteran Affairs Department, according to that article. Deputy Secretary and Chief Operating Officer Michael Jackson, who has played a key role in running DHS, announced his resignation last week.

During a transition between administrations, career officials often ascend to take over on an acting basis leadership positions usually held by political appointees.

"The whole nomination and confirmation process does take a while so there is a fairly extended period where you have a mix of some new people [and] acting people," McGinnis said.

Mike Hopmeier, a former adviser to various agencies and president of the Mary Esther, Fla.-based consulting firm Unconventional Concepts Inc., said writing a transition plan is an inherently governmental function and should be handled internally by the department.

"Periodically transition plans are contracted out," he said. "It almost always ends up in failure."

DHS spokesman Larry Orluskie said the contract was necessary.

"They're not writing the plan, they're helping us in engaging other federal agencies," Orluskie said. "To have a staff do that within the department, someone has to be taken away from their duties…. Or you can contract someone who has the experience to do that, and that's what the Council for Excellence in Government is going to do: share that past experience with large federal agency transitions."

McGinnis added that the process would be collaborative.

"We're not a consulting firm," she said. "We don't see ourselves as the usual contractor."

]]>

A Feel For Numbers

Zack Phillips — Mon, 01 Oct 2007 00:00:00 -0400

What if we fought terrorism using hard data instead of gut feelings and partisan politics?

Alan B. Krueger has something that most of us do not. He calls it "numbers sense." After decades of working with data, the Princeton University economist has an intuition when it comes to statistics. He doesn't need a calculator to sense whether numbers add up.

So while it took others considerable time to pore through "Patterns of Global Terrorism 2003," a densely packed, 200-page, annual State Department report, Krueger's sensors went off immediately. It was April 29, 2004, and as Krueger sat in his office, then-Deputy Secretary of State Richard Armitage was standing before television cameras in Washington, discussing the report. "Indeed, you will find in these pages clear evidence that we are prevailing in the fight" against terrorism, Armitage said.

But Krueger saw almost immediately that the report contained no such evidence. In fact, the reverse was true. While the report's narrative claimed that terrorist attacks had fallen to their lowest level in two decades, the numbers in the appendix showed significant terrorist attacks at their highest level since the department began counting.

As he studied the report more closely, Krueger found additional anomalies. For example, the list of terrorist incidents in 2003 stopped in mid-November, even though several high-profile attacks occurred after that date. He called the State Department to ask if these were mere printing errors; he never received a full explanation.

A month later, Krueger and Stanford University political scientist David Laitin wrote an editorial for The Washington Post cataloging all the errors they had found in the report.

Krueger had pitched the editorial before the 2003 report was released, based on oddities he had seen in previous incarnations of the report. Eventually, the State Department acknowledged the mistakes. Then-Secretary of State Colin Powell blamed data collection problems when asked about the errors on Meet the Press. The department later issued an amended report-with 11 pages of corrections. And it reassigned production of the annual report to the National Counterterrorism Center under the Office of the Director of National Intelligence. The whole fiasco, Powell told Meet the Press host Tim Russert, had been "very embarrassing."

Krueger thinks the errors are more than embarrassing. He thinks they indicate a larger problem: Security agencies are inexperienced with and uninterested in statistics. The Princeton economics professor sees the annual terrorism report as a crucial diagnostic tool for assessing counterterrorism efforts. State Department officials, he says, seem to see the report as a perfunctory exercise in international relations.

"There was no process to say, 'Does the [report] narrative conform with the hard evidence?' and I don't think they really view the report as data," he says. "I think they view this as an exercise in public diplomacy. They wanted to make some comments about allies and people who were not cooperating in the war on terrorism."

Krueger recently finished an extensive analysis of terrorism data for a new book, complete with often counterintuitive findings about terrorism's root causes and impacts. But don't be fooled into thinking that such analysis is merely an academic exercise. As then-Secretary of Defense Donald Rumsfeld infamously wrote in a leaked 2003 memo, "Today, we lack metrics to know if we are winning or losing the global war on terror." Applying econometrics-the use of statistical techniques to study economic figures-to terrorism data would seem to provide an answer. But that requires vast amounts of reliable data and the expertise to analyze it. Security agencies have very little expertise and few people-inside or outside government-are collecting much data.

"We need better data in order to figure out whether our efforts are effective or not, whether we have the right strategy, or even if our policies are backfiring," Krueger says. "The government appears to take a rather disinterested attitude toward statistics in this instance, which is extremely distressing to me."

Faith-Based Policy

The Labor Department has the Bureau of Labor Statistics. The Commerce Department has the Census Bureau and the Bureau of Economic Analysis. The Agriculture Department has the National Agricultural Statistics Service.

The State Department is the only Cabinet agency without its own in-house statistics office. That's more significant than it sounds, Krueger says. "When the State Department releases numbers, there is no one who is able to check whether there has been a statistically significant change," he explains. "So the department does not know if the trends it is reporting could have occurred by chance."

Krueger is a trim and youthful 46. Formerly the chief economist at the Labor Department, he speaks quietly but authoritatively, easily translating economics jargon into lay terms. In his book, What Makes a Terrorist: Economics and the Roots of Terrorism (Princeton University Press, 2007), he gathers the results of previous research and does some statistical analysis of his own. His most salient finding has grabbed headlines because it contravenes conventional wisdom: Poverty and a lack of education are not important causes of terrorism. Though many terrorists come from impoverished parts of the world, they tend to be better off than their countrymen and more likely to be well educated. Basically, Krueger says, most suicide bombers are not indigents who are so poor they have nothing left to live for; rather, they are radicals who believe in their cause so fervently that they are willing to die for it.

Some contest this conclusion with anecdotal evidence, but Krueger's book has the statistics to back it up. For example, according to analysis by Claude Berrebi-a former graduate student of Krueger's now with the RAND Corp.-almost 60 percent of Palestinian suicide bombers had more than a high school degree compared with less than 15 percent of the Palestinian male population. Krueger finds similar patterns with other militant groups and in public opinion surveys, which reveal that the unemployed and less educated are typically the least supportive of politically motivated violence.

Instead, Krueger finds that one important cause of terrorism is the suppression of political and civil rights. This makes sense if you conceive of terrorism as a political act-albeit an extreme and violent one.

Not all Krueger's conclusions are novel, but never have they been presented with such a comprehensive body of evidence. It's easy to see their practical implications. Foreign aid, often trumpeted as important in fighting the conditions that breed terrorism, likely has little such effect, while U.S. support for autocratic regimes likely fuels it. He also concludes that countries that occupy others are more likely to be targets of terrorism.

To Krueger, statistics represent cold, hard facts that should be informing, or even forming, policy. But security agencies seem to advance policies without any empirical basis. He has a name for that kind of governance-he calls it faith-based policy. "The Bush administration has faith that it is pursuing the right strategies and does not see the need to monitor how the strategies are actually working," he says.

Krueger doesn't suggest that his findings are unimpeachable-he repeatedly calls for more data and more research-but he says statistical analysis is better than relying on political calculations, anecdotes or even Michael Chertoff's stomach. In July, the DHS secretary said he thought the country faced a heightened risk during the summer based in part on "a gut feeling." Krueger responded by looking for seasonal patterns among data from the National Counterterrorism Center and found that threats from al Qaeda and Sunni extremists are no higher in the summer than in the fall, though terrorist attacks by other groups worldwide increase about 10 percent in the summer months.

"Should we be making policy and informing the public based on gut feelings?" Krueger asks. "Some of these concepts are hard to define but . . . I would say we do a better job when we try to systematically measure these phenomena than just use anecdotes."

Too Abstract

Many might balk at the application of econometrics to counterterrorism. Unlike terrorism, economics has a longer history of data to draw on. Most experts trace the birth of modern terrorism to the beginning of the 1970s. Also, terrorism statistics are more subjective than the reliable figures of monetary and fiscal policy.

Or are they? In spite of their reputation as precise and authoritative, economic statistics involve a sizable degree of subjectivity, Krueger points out. For example, the unemployment rate requires a judgment about who qualifies as unemployed. Inflation must account for quality improvements in products, which are difficult to measure precisely.

Krueger says economic statistics are regarded as reliable because of the way the government collects and releases them. In a 2004 article in Foreign Affairs, he and Laitin recommended that the State Department safeguard terrorism statistics as the government does economic data by barring political appointees from discussing them for the first hour after they are released so career officials-the technical experts-can explain the numbers to the media without political spin. They also suggest that agencies announce a release date for terrorism stats far in advance and stick to it. These guidelines, along with transparent, consistent definitions of how the data are coded, would help give terrorism figures the authority of economic indicators. "I don't think there's any reason why the statistics when it comes to counterterrorism can't be as credible as economic statistics," he says.

But Krueger and others think those in the security and military worlds are less experienced with statistical analysis-and not interested in learning. "People don't feel comfortable with economic analysis-it's something that eggheads do," says Raphael Perl, who has studied the issue for the Congressional Research Service in Washington. "It's considered to be a little too abstract for people to understand and base noneconomic policy decisions on."

Perl suggests that as the country moves further from the immediate aftermath of the Sept. 11 attacks, long-term analysis of patterns and causes can become more of a priority. Krueger is less sanguine. He thinks the international relations field is uninterested in truly measuring terrorism. "I think there's an attitude that, when it comes to diplomacy, some problems are best dealt with quietly," Krueger says. "Or it's better not to be so explicit-you have more flexibility, or maybe our allies will be offended if we call something a terrorist attack."

Dueling Databases

Whatever the interests of diplomats, University of Maryland criminology professor Gary LaFree is devoted to measuring terrorism, though not necessarily using data collected for that purpose. In 2000, he was thrilled to find himself standing in front of a closet full of moving boxes in the Arlington, Va., headquarters of the Pinkerton Global Intelligence Services. The green-and-white boxes contained something of a Holy Grail for LaFree: an inventory of 70,000 terrorism incidents worldwide from 1970 to 1997.

LaFree, a gregarious but soft-spoken man, likes data that were collected for a reason other than the one he is studying. For instance, a police department's homicide statistics could be compromised by its interest in keeping crime rates low, while cause-of-death records kept by hospitals have no such agenda. The Pinkerton data was nearly perfect: It was collected not to measure terrorism, but to advise business clients about the security situation in various parts of the world.

"From Pinkerton's standpoint, they were less concerned about whether some government was going to be politically offended than whether they're protecting their clients," LaFree explains. "So, ironically, I think they had an easier time than, say, the State Department."

LaFree has moved the data, with Pinkerton's blessing, to the university's National Consortium for the Study of Terrorism and Responses to Terrorism, of which he is the director. Since 2002, he and a staff of more than 75 students and researchers have been working to computerize, normalize, double-check and update the data to create the Global Terrorism Database, which went live in May. LaFree hopes it will become the authoritative source of objective metrics that counterterrorism efforts have lacked.

Government data on terrorism, if not damaged by political biases, includes at least some glaring inconsistencies. For example, the annual terrorism reports have omitted many cross-border attacks on civilians in Africa, though similar attacks in other regions were counted. The government appears not to have counted attacks by the Contras in Nicaragua at all. And Krueger and Laitin found that the State Department categorized one suicide attack by Chechnyan rebels as terrorism in 2002, but omitted several such attacks in 2003.

The more politically charged an area of the world, the more hotly debated its terrorism statistics. Iraq and Afghanistan are the best current examples. September's congressional testimony by U.S. commander in Iraq Gen. David Petraeus ignited allegations that the Pentagon was manipulating casualty and violence statistics to paint a more encouraging picture of the country's progress. And LaFree charges that the NCTC includes questionable incidents in its Iraq terror reports, whereas his database does not.

"I think there's tremendous pressure on the government to treat everything that happens in Iraq as terrorism, but we are working very hard not to do that," he says. "Because clearly some of the violence, maybe most of the violence, in Iraq is terrorist [violence], but a lot of it is payback, a lot of it is plain old crime. So we're trying to apply the same set of standards that we've applied everywhere else in the world to Iraq. And we don't have, fortunately, the same political pressure because we're located in a university."

The usefulness of LaFree's Global Terrorism Database is readily apparent. For each attack, it details weapons used, target, number of casualties, precise location and the group claiming responsibility. And the fact that the data stretches back to 1970 allows for what economists call time-series analysis, which examines a long history of behavior or patterns.

Performing such analysis, LaFree and two other researchers last year found that three of the five strategies the British government employed in Northern Ireland from 1969 to 1992-imposing a curfew, detaining thousands of suspected terrorists and treating terrorist suspects as criminals rather than political prisoners-backfired and actually led to an increase in terrorist attacks.

The terrorism database's most significant contribution comes in cataloging domestic terror attacks, according to James O. Ellis, research and program director for the Oklahoma City-based Memorial Institute for the Prevention of Terrorism. Though the government and public focus mostly on international terrorism, 90 percent of attacks are domestic, Ellis says. His institute runs another repository, the Terrorism Knowledge Base, containing data RAND has been collecting mostly since 1968. It includes analytic tools that allow users to make their own graphs and reports, and it profiles groups and leaders, making it a good first stop for information on terrorist methods and organizations. According to a survey, 42 percent of its users are from government, law enforcement or the military; 31 percent of government users come from Homeland Security.

The terrorism databases are competitors, so LaFree and Ellis tactfully voice qualms with each other's figures. LaFree says the Terrorism Knowledge Base omits some incidents, while Ellis says the Global Terrorism Database includes incidents others would not consider terrorism. But ultimately, both extol the virtues of having multiple data collection efforts. Ellis says he hopes to incorporate LaFree's data into the Terrorism Knowledge Base in the near future. Humble Beginning

A hot day in July found Princeton economist Krueger and University of Maryland criminologist LaFree in the same room in Virginia. Both men sit on an advisory board to the National Counterterrorism Center, now tasked with producing the annual terror tally, the "Country Reports on Terrorism."

Both Krueger and LaFree give the center high marks for soliciting input from outside experts.

The advisory committee, which includes academics, analysts, counterterrorism experts and government officials, advises the center on internal procedures and about violent incidents that are difficult to categorize. Krueger said the center even asked him to write a memo critiquing its work.

Still, it's a humble beginning. The center's data for 2005 is not comparable to the 2004 data or data from previous years, which was collected by its predecessor, the Terrorist Threat Integration Center, TTIC included staffers from the FBI, the CIA, the State, Defense and Homeland Security departments, and other agencies and departments, including the Capitol Police, the Energy Department, the Nuclear Regulatory Commission and others. The National Counterterrorism Center lacks funding to go back and collect data from before 2004.

"It's tragic to me that the U.S. government-the administration and Congress-have not put more resources into trying to measure" terrorism, Krueger says. "Compared to the amount of money we're spending on counterterrorism policy-and often spending it in the dark-collecting the data to better guide the policy is very inexpensive."

Krueger says LaFree's group is a good start. But it is collecting information mostly already available from open sources, and Krueger says there is more data, such as information on thwarted attacks, that should be collected. Both LaFree's and Ellis' groups are funded only through 2007; they hope DHS will extend their grants.

"When 9/11 happened, I said, 'My God, if I can't get funding for this, I better give up,' but in fact, it was quite difficult to get funding at first, because almost all agencies want immediate deliverables," LaFree recalls. "They want results tomorrow and they don't want to spend for long-term data collection."

Government tends to focus on the crisis of the moment. So it's possible that as the country moves further away from the crises of 2001, the longer term work of measuring and analyzing global terrorism will begin to get more attention. Still, it's difficult to know whether terrorism data-gathering is just starting to blossom, or is destined to remain underfunded and underappreciated. LaFree notes that only a handful of researchers nationwide are studying the topic now, though his center has been home to 200 graduate students developing dissertations, master's theses and other studies. He wonders whether introducing young researchers to the field, as much as finishing the terrorism database, will be his legacy.

"In a way, the science of studying terrorism is probably where biology was 100 years ago," he says. "We're into the basic building blocks." Lest you think that an overstatement, LaFree notes that no one in the world can answer the most basic counterterrorism data question: Globally, is terrorism increasing or decreasing? "We've got some pretty good guesses now, but nobody can really give you a definitive answer to that," he says. "No one has collected the data until now."

]]>

Watchdog finds DHS division improperly transferred funds

Zack Phillips — Fri, 21 Sep 2007 00:00:00 -0400

DHS' Preparedness Directorate developed a complex system to pool funds from different appropriations accounts to pay for directoratewide management and administrative needs in fiscal 2006. But according to a Sept. 17 letter from GAO to the Senate and House Appropriations committees, the agency did not meet the legal requirements to make such a move.

The letter said the department should adjust those accounts, and noted that if any of the accounts lack unobligated balances to cover the adjustments, the department violated the Antideficiency Act and should report the violation. The Antideficiency Act prohibits agencies from spending money they have not been appropriated.

The Preparedness Directorate, which has since been dismantled, was created as part of a departmental reorganization in 2005. For fiscal 2006, the directorate was financed through eight separate appropriations accounts. According to DHS, the appropriation for management and administration was far below the level necessary, in part because the reorganization that created the directorate occurred after the department had submitted its fiscal 2006 budget justification to Congress.

According to the GAO letter, congressional appropriators gave the directorate about $16 million for management and administration, while the actual costs totaled about $59 million. Because the directorate did not have enough money for some directoratewide services, it pooled funding from different appropriations accounts to pay for them.

Sharing funds across appropriations accounts is tantamount to transferring money between accounts, GAO said in the letter. These transfers are generally illegal. Three separate laws provide exceptions that would allow DHS to make the transfers, but each comes with limitations and requirements, and the department failed to meet the requirements, according to the watchdog agency.

For example, the Economy Act allows an agency to order goods or services through another agency if the second agency can purchase them more conveniently. But that act requires written agreements and a formal declaration from the head of the ordering agency that the move is in the best interests of the government.

"These controls ensure that an agency reviews and justifies transfers of funds between appropriations and is able to accurately record and track these obligations," the letter stated.

DHS did not create such agreements, relying instead on de facto arrangements that GAO found insufficient.

Another statute would allow DHS to temporarily charge one appropriation for an expenditure benefiting another account within the same agency, so long as the accounts are adjusted during that fiscal year. The department did not make those adjustments, according to the letter.

The directorate was dismantled this year as part of a post-Hurricane Katrina reorganization that created the National Protection and Programs Directorate and restructured the Federal Emergency Management Agency, making it a standalone agency within DHS.

GAO's review was directed by the conference report accompanying the fiscal 2007 homeland security appropriations bill.

]]>

Economist warns against vague statements on security threats

Zack Phillips — Thu, 13 Sep 2007 00:00:00 -0400

Government officials should avoid making vague statements about terrorism that have little empirical basis, said Alan Krueger, a professor of economics and public affairs at Princeton, at a Tuesday event at the Brookings Institution, a Washington nonprofit devoted to public policy research.

Krueger used as an example Homeland Security Secretary Michael Chertoff's July disclosure to the Chicago Tribune's editorial board that he had a "gut feeling" the country faced a heightened risk of terrorism during the summer. Chertoff said this feeling was based on past seasonal patterns of terrorist incidents, recent al Qaeda statements and intelligence he did not disclose.

Krueger, who served as the chief economist at the Labor Department from 1994 to 1995, said he decided to test that thesis with data on worldwide terrorist attacks from the National Counterterrorism Center, the federal agency responsible for compiling terrorism statistics. "I wouldn't draw too strong a gut feeling from this data," he said.

The economist found that, historically, attacks by al Qaeda and Sunni extremist groups have been no more frequent in the summer months. When all terrorist groups are counted, the number of attacks worldwide has been about 10 percent higher in July and August than in other months, he said. But he characterized this as a small difference, noting that other types of incidents such as boating accidents go up by much more than 10 percent in the summer.

"Would you scare 300 million people on the basis of those tiny blips in those charts?" Krueger asked. "It didn't seem to me to be constructive."

DHS spokesman Russ Knocke said Krueger's comments ignore the National Intelligence Estimate released in July, "which cites increased activity overseas as evidence of an enemy that is reconstituting."

"He may have also missed the news about the Glasgow plot, and the arrests in Germany and Denmark," Knocke said via e-mail, referring to an attempted car bombing at the Glasgow International Airport in July, and the arrests earlier this month of suspected Islamic terrorists by German and Danish authorities. "But, if any doubt lingers in his mind about activity in spring and summer months in recent years, he need only ask the families of victims from London, Madrid and 9/11."

Brookings hosted Tuesday's event as a discussion of separate findings in Krueger's new book, What Makes a Terrorist: Economics and the Roots of Terrorism. In it, the economist analyzed data from the NCTC and elsewhere, and came up with often counter-intuitive findings.

Most prominently, he found no evidence to support the notion that poverty and a lack of education breed terrorism. Although many terrorists come from impoverished parts of the world, on average terrorists are wealthier and better educated than their fellow citizens.

Individual studies had reached similar conclusions previously; Krueger's book collected comprehensive evidence.

Daniel Benjamin, a Brooking Institution senior fellow in foreign policy studies and a former National Security Council staff member, said terrorism scholars never believed the supposed link between terrorism and poverty or education. And Philip Gordon, another Brookings senior fellow in foreign policy studies and formerly the National Security Council's director for European affairs, said he thought it was obvious that poverty is not a significant cause of terrorism.

Gordon echoed the reasoning that Krueger used in the book. "If it were, we'd see terrorists teeming out of Chad, Haiti . . . and the poorest countries in the world," he said.

Still, the myth dies hard. One questioner heatedly pressed Krueger to explain his findings in light of the Gaza Strip, suggesting that an unemployment rate as high as 80 percent leaves the jobless susceptible to being recruited by terrorist organizations. Krueger said that over time, unemployment rates in the Gaza Strip and elsewhere have risen and fallen but the number of terrorist attacks has not changed accordingly.

"I guess I don't find it compelling to take one example and say unemployment is high and there's terrorism," Krueger said.

Gordon and Benjamin suggested that poverty could play an indirect role in causing terrorism, either by contributing to a sense of humiliation among inhabitants of poverty-stricken countries or by leading to more autocratic governments, a condition that seems to fuel terrorism.

]]>

Lawmakers concerned over slow pace of anthrax vaccine acquisition

Zack Phillips — Tue, 11 Sep 2007 00:00:00 -0400

Rep. Bennie Thompson, D-Miss., chairman of the House Homeland Security Committee, and six other panel members wrote HHS Secretary Michael Leavitt on Monday to express concern that the department is not moving aggressively enough to acquire the anthrax vaccine.

In May, HHS released a notice seeking to identify potential manufacturers of a next-generation vaccine based on recombinant protective antigen (rPA) technology that does not use the anthrax germ itself. That solicitation closed in June. The notice said the department anticipated that a formal solicitation would be released in July with proposals due in November, but HHS has yet to release such a request.

The lawmakers asked Leavitt how many responses the department received to the notice, and what the timeline is for issuing a formal request for information or proposals.

Spokesman Marc Wolfson said the department was expecting to release a request for proposals before the end of the year.

Delays have beset Project BioShield, a $5.6 billion program meant to lure pharmaceutical companies to the traditionally less lucrative biodefense market. The anthrax program has been a particular problem. Last December, the department terminated a contract with Brisbane, Calif.-based VaxGen Inc., the highest profile BioShield contractor, for 75 million doses of a next-generation anthrax vaccine based on the rPA technology.

VaxGen had pushed back its delivery date several times and was unable to begin its Phase 2 trial by the HHS-imposed deadline of Dec. 18. The department subsequently released the May sources-sought notice for 25 million doses of a new rPA-based anthrax vaccine, but it has not said how many responses it received.

"We remain concerned that this cancellation impedes development work and sends the wrong signal to private sector companies who would seek contracts under BioShield," the letter said.

VaxGen and San Diego-based Hollis Eden Pharmaceuticals, which formerly was developing a countermeasure to radiation sickness, have said they will no longer pursue biodefense products out of frustration with HHS. And Thompson's letter said that British vaccine manufacturer Acambis, the government's main supplier of smallpox vaccine, also has decided to leave the biodefense market.

The letter also expressed concern about an implementation plan HHS released in April, because the plan scheduled the next round of acquisition of anthrax antitoxins -- which would counter multidrug-resistant anthrax -- until at least fiscal 2009, and possibly as late as fiscal 2013.

Acquisition delays are significant because many private sector firms say that for investors to fund the costly drug development process, they need unambiguous commitments on how much of a countermeasure the government plans to buy. Delays and uncertainties make investors less interested in funding such projects, they say.

As of September, the government's Strategic National Stockpile had 10 million doses of the current generation anthrax vaccine, made by Lansing, Mich.-based Emergent BioSolutions. That vaccine also has had problems, with concerns about side effects and safety leading some soldiers to sue to stop a mandatory vaccination program in the military. HHS posted a notice in April of its intent to buy another 10.4 million doses from Emergent, with an option for another 8.35 million doses, around July 24. The department and company are still in negotiations.

Emergent and the British firm Avecia Biotechnology are developing rPA vaccines, which would require fewer doses than the current generation vaccine. VaxGen is trying to sell its rPA vaccine program to another entity, although HHS' sources-sought notice precluded responses from companies with an Investigational New Drug application on hold with the Food and Drug Administration -- a condition that applies to VaxGen's vaccine.

]]>

Watchdog finds gaps in DHS visitor tracking program

Zack Phillips — Wed, 05 Sep 2007 00:00:00 -0400

The report (GAO-07-1065) stated that though DHS met some of the legislative mandates for the US Visitor and Immigrant Status Indicator Technology program, others in the department's fiscal 2007 spending bill went unfulfilled. Officials in charge of US VISIT -- conceived in 2004 to collect and share information on foreign nationals traveling to and from the United States - also have fallen short on implementing recommendations in previous GAO reports aimed at establishing program oversight capability.

The congressional requirements "need to be addressed quickly and completely," wrote Randolph Hite, GAO's director of information technology architecture and systems issues, in the report. He added that it is unclear why DHS has yet to fulfill them.

The program has encountered problems, particularly in its exit-tracking component, on which the department has spent $250 million to date. A system to record exits by land based on radio frequency identification chips embedded in immigration documents did not meet requirements under testing, and DHS officials said in 2006 that they could not implement a biometric-based system without huge costs and traffic delays.

The GAO report warned the department "runs the serious risk of repeating its past failures" because of a lack of detailed information about its plans for a new biometric-based exit system for airports. The department has issued a high-level schedule, but not detailed plans that define what will be done, by whom and at what cost, and compare the system's costs with its expected benefits and risks.

In response to the report, DHS officials framed past work on the exit component as pilot efforts intended to be valuable learning experiences rather than fully operational systems. Officials said the testing showed that the exit systems worked but the procedures did not, because, unlike with entry systems, there is no existing, exit infrastructure to which a biometric-based system can be added.

DHS plans to incorporate the exit component of US VISIT into the airline check-in process, program director Robert Mocny said in a June 28 hearing before the House Homeland Security Subcommittee on Border, Maritime and Global Counterterrorism. Mocny said DHS plans to publish a notice of proposed rule-making by the end of the year, and a final rule by June 2008.

But at land borders, DHS for now will use only biographic information and not a biometric-based exit system, which Mocny said would be too complex. Ninety-one percent of travelers from countries of interest enter the United States by air, according to Mocny.

The GAO report also criticized the department for spending too much on program management. In 2006, DHS spent $1.35 on US VISIT management for every dollar spent on new capabilities. The program's fiscal 2007 expenditure plan proposed spending $1.25 in management costs for every dollar on new development. The expenditure plan does not justify such a balance, the report said.

"On the basis of past efforts, there is no reason to believe that the program's disproportionate investment in management-related activities represents a prudent and warranted course of action," Hite wrote in the report.

The report also cited concerns over DHS' personnel capabilities. The US VISIT program's 115 governmental positions were filled at one point in 2006, but since then 21 -- including leadership positions -- have become vacant. DHS officials stated in response that as of mid-August, 90 of the positions were filled. Officials also said the vacancies were mitigated by a recruitment and retention program and an intern program.

GAO auditors did note that the program's 12 ongoing task orders are on schedule and within budget. This makes US VISIT somewhat unique among other large-scale federal programs at DHS and other departments, which have been roundly criticized for huge delays and cost overruns. The problems have been especially acute for lead systems integrator projects, in which a department selects a prime contractor not only to build the system but to manage it as well. So far the department has spent more than $1.3 billion on US VISIT and its prime contractor, Bermuda-based Accenture Ltd.

]]>

Thick or Thin

Zack Phillips — Sat, 01 Sep 2007 00:00:00 -0400

Homeland Security officials wrestle with the best way to spread grant money among cities and states.

Colchester is a small town just outside Burlington, Vt.

It has slightly more than 17,000 people. The town's government has an annual operating budget of about $9 million. And courtesy of a federal homeland security grant program, Colchester now has a $58,000 piece of technology for emergencies: a search-and-rescue vehicle that can bore through concrete.

Presumably, city officials could use the vehicle to search for survivors in the rubble of a collapsed building, although Vermont isn't on a fault line and it's difficult to imagine terrorists targeting the Burnham Library.

This purchase is one of many frequently cited examples of what critics see as extremely wasteful federal homeland security grant programs. The list goes on.

A $180,000 DHS grant went to a port that was so remote it receives only 20 ships a year. And it's not simply a case of federal dollars going to small and remote areas. Washington used homeland security funds to pay for long-promised programs loosely or dubiously tied to counterterrorism: a car-towing system or a summer jobs program, for example.

Homeland Security Department officials are familiar with all the glaring examples of misspent funds-they've made the department an easy target for ridicule. But DHS has been remodeling its grant programs in ways that even some critics acknowledge make sense. And with the July announcement of $1.7 billion in grants to state and local governments-in particular, $746 million earmarked for high-risk urban areas-DHS officials say they have solved the problems that have invited criticism. Department leaders believe they've settled upon the right system-one that focuses spending on the highest risk cities at the expense of less populous, more remote areas.

Spread Too Thin

Homeland security grants for years have been rapped by auditors, congressional committees and others. Investigative reports are replete with colorful examples of wasteful spending. For example, in April 2004, the House Select Committee on Homeland Security found that Lake County, Tenn., had used $30,000 in federal homeland security grant money to buy a defibrillator for a high school basketball tournament. Congressional Quarterly reported in 2003 that 1,570-person North Pole, Alaska, received $557,000 for communication and rescue equipment.

Some investments appear to be unjustified; others simply fail the common-sense test. Either way, these examples serve to bolster critics' primary argument against the grant programs: DHS and Congress are merely throwing money-exorbitant sums of money-at security problems without any cost-benefit analyses to help guide smart investments.

DHS has no way to assess how the $23 billion it has given state and local entities since 2001 has reduced risk, according to a February 2007 report by the Congressional Research Service. Reportedly, less than half of that money has been spent and a third remains unobligated. Secretary Michael Chertoff says that is not as bad as it sounds, because cities and states still have to solicit bids, judge competing offers and test the products before awarding the grant money they have received. "The fruits of that money are going to be rolled out over the next couple of years so the public is going to see a lot of benefit from . . . the $23 billion," Chertoff said at a July 18 press conference announcing the 2007 grants for high-risk urban areas.

Veronique de Rugy is a senior research fellow at George Mason University's Mercatus Center. In 2005, she deeply probed homeland security budgets for the American Enterprise Institute for Public Policy Research and published her findings in a 42-page report titled "What Does Homeland Security Spending Buy?" She concluded that most homeland security spending actually does little to reduce the risk of terrorism and instead is motivated mostly by politics-the need of federal lawmakers, for example, to be perceived as doing something to counter the latest security threat in the news.

What irks de Rugy most is the use of mandatory minimum grant amounts, which Congress made as a part of security grant funding from the start. By requiring that large portions of security dollars be distributed evenly among states, localities and other recipients, Congress guaranteed that the money would be spread too thinly to do any good, critics say. James Carafano, senior research fellow at the Heritage Foundation, compares the hundreds of relatively small grants to France's unsuccessful defenses prior to World War II. "Trying to turn every port and crossing site into a little Maginot line is a losing strategy," he says, referring to the ground-based fortifications France built along its eastern border after World War I, which German troops later sidestepped as they invaded from the north.

De Rugy believes rural areas receive a disproportionate share of federal funds. Terrorists on occasion have targeted areas outside New York, Washington and the other most populated, highest risk urban centers, notably in the 1995 Oklahoma City bombing. Still, the government can't protect every potential target, so de Rugy and others say the only sensible strategy is to target limited federal funds at the most cost-effective projects-that is, where investment will most reduce the risk of terrorism.

Homeland Security's Urban Areas Security Initiative program was supposed to address such criticisms. For one thing, potential recipients compete for funding. And as its name suggests, the program is intended to support the planning, equipment and training needs of the most likely to be targeted, most densely populated urban areas.

Initially, seven cities were recipients: New York, Washington, Los Angeles, Seattle, Chicago, San Francisco and Houston. Later, reportedly after complaints from local officials, the list expanded to include 30 more areas and, in 2005, 50 areas. Each expansion cut into the funding received by cities like New York. "This is supposed to be going to the high-risk cities," de Rugy says. "There aren't 100 of them . . . You don't need every little city to be equipped with everything."

Last year, DHS ignited a political firestorm when it announced that New York and the Washington region would receive 40 percent less than in 2005 (the awards actually amounted to a 26 percent reduction in their share). The grant program was cut 14 percent between 2005 and 2006.

Then-Senate Minority Leader Harry Reid, D-Nev., called for DHS Secretary Chertoff's resignation after the department removed Las Vegas from the list of 35 cities eligible for urban initiative funding in 2006. Other lawmakers also complained. In some ways, these complaints were unfair, or at least unworthy of substantial attention. After all, while it might be the lawmakers' job to argue for their constituencies, it is Homeland Security's job to ignore politics and award funds based on risk.

"I have to be very clear about this: The purpose of the UASI program, indeed, the purpose of all homeland security funding, is not to generate popularity for the secretary or for the Department of Homeland Security," Chertoff said in 2006. "It is to address the highest priorities driven by an analytic, risk-based process. UASI funds are not entitlements."

On the other hand, some of the decisions were difficult to explain. New York and Washington rank as the areas most at risk of terrorism. Las Vegas, Reid pointed out, had more visitors on New Year's Eve than New York City. A list of critical infrastructure considered in calculating where to award grants was mocked for including a popcorn factory and a hot dog stand. And another list showed New York as containing only two landmarks.

Matt A. Mayer headed DHS' grants wing as executive director of the Office of State and Local Government Coordination and Preparedness before becoming a counselor to DHS Deputy Secretary Michael Jackson in July 2005. He says the department had been using more and more de-tailed data in its calculations and his team was developing a system that would have evaluated grant applications based on whether or not they built one of the critical capabilities on a nationwide list generated by DHS. But that part of the system never came to fruition, he says, and the current one is not based on the Targeted Capabilities List. Mayer attributes last year's controversy to the department's lack of an objective criterion, such as the Targeted Capabilities List, for evaluating applications. With a clear criterion, the department would be able to justify its funding decisions more easily.

Considering Consequences

To distribute $746.9 million in 2007 UASI awards, DHS simplified things. Chertoff said that last year, the department did too much bean counting-collecting bundles of information, much of it only minimally helpful and often obscuring the larger picture. The list of critical infrastructure that identified more than 200,000 items last year now contains only about 2,000, all of unquestionable importance, the secretary says.

"This is not petting zoos, popcorn factories or ice cream parlors," he said in July. "This is about 2,000 of the most important infrastructure in this entire country: major power plants, major switching stations, dams, bridges-the kinds of things that if they go out are going to have a regional or national impact." DHS has stopped counting landmarks and icons altogether; they added little value and "a lot of heartburn," Chertoff says.

Instead, DHS has a new mathematical weighting system. Forty percent of a grant applicant's score is tied to population and population density, because protecting people and mitigating the impact of terrorism on people are the department's top priorities. Twenty percent is based on threat analysis; threats change so often that assigning them too much weight would risk focusing spending on "last year's battles," Chertoff says.

Another 20 percent is tied to economic data that captures the potential financial impact of terrorism. Critical infrastructure counts for 15 percent, and 5 percent is tied to whether the area has military installations, is near the border or has other national security implications. Implicit in these calculations is the revised assumption that all areas of the country are equally vulnerable to attack. So in the definition of risk that Chertoff introduced in a speech in February 2005-risk equals threat times vulnerability times consequence; consequence now is heavily weighted.

"We are past the point of arguing about whether our methodology or calculations are right," Chertoff said in July. "I think most people I've talked to understand that given what our philosophy is here that we are calculating these things correctly." The philosophy is to concentrate most of the grant money in highest risk cities, with second-tier cities receiving a lesser but still significant share. That means New York, the National Capital Region and the other four highest risk areas shared 55 percent of the $746.9 million pie. The 39 other eligible cities share 45 percent of the funding.

Prior to this year, DHS spent 53 percent on the top-tier cities. But Mayer says using preset percentages is problematic for the same reason using mandatory minimums is.

It is impossible to know whether the historical 53 percent is too much money or too little for the top-tier because the spending has not been tied to specific capabilities.

"We have no real basis [for saying] that past allocations are a good benchmark for future allocations because we could have been over- or underinvesting, given the absence of the capabilities benchmark," he says.

Not Entitlements

In a Heritage Foundation paper published earlier this year, Mayer and Carafano argued again for a grants system based on the list of targeted capabilities. Applications would be judged by four questions:

Would the funding request build a capability on the list?
Does the jurisdiction need that capability? (Des Moines, Iowa, probably does not need a top-tier urban search-and-rescue team as New York City would.)
Would the request close an existing capability gap?
And is closing this gap in this area important enough relative to other priorities to justify investment?

To answer these questions, Mayer and Carafano say DHS needs to conduct a nationwide assessment of capabilities, which it has not done since 2003.

For her part, de Rugy says the current system is better than last year's, and admits it might be the best DHS can pull off. But she still thinks it allocates far too much money, and that now it's time for states and localities to begin paying for their own security needs. Federal grants provide incentives for state and local entities to seek as much security funding as they can; local or state-run programs would encourage governments to prioritize their security needs and allocate scarce funds to maximum effect.

"I think they should just get rid of these grants," de Rugy says. "It's been five years."

Chertoff might not disagree completely. In explaining the awards this year, he said communities should expect to get fewer federal dollars as they build the capabilities the grants are intended to bolster. "These grants are meant to be investments in capital," he said. "They are meant to build capabilities. They are not meant to be annuities or entitlements where you get the same amount every year like a Social Security check."

Risk-Based Funding

After complaints that homeland security grants were awarded unfairly, the Homeland Security Department now evaluates cities' and states' needs based on population size and density, threat analysis, potential financial impact, presence of critical infrastructure and national security implications. Here's a look at the variance in state homeland security grants.

Total State Homeland Security Grant awards, fiscal 2002-2007

	Grants (in millions)	Population	Dollars per person
California	$510	36,457,549	$14.00
New York	306	19,306,183	15.83
Vermont	56	623,908	89.61
Washington	55	581,530	93.89
Alaska	53	670,053	79.70
Wyoming	52	515,004	100.72

Source: Homeland Security Department, U.S. Census

]]>

FEMA looks to private sector for disaster provisions

Zack Phillips — Fri, 24 Aug 2007 00:00:00 -0400

After what happened with hurricanes Katrina and Rita, the assumption now is that FEMA will provide nothing.

If they can get supplies that way, a FEMA spokesman approvingly told the Houston Chronicle, "that's just one last thing we don't have to coordinate for." This response may sound flippant, but it actually illustrates the overhaul of FEMA's realigned logistics program, which is beginning to take shape.

The most salient change is an increased reliance on the private sector -- the outsourcing of much of the agency's logistics to a contractor or contractors that will be in charge of acquiring, storing and moving emergency supplies. This arrangement, known as third-party logistics, is common in many industries and should make FEMA's supply lines shorter and quicker, says Marco Bourne, FEMA's director of policy and program analysis. Companies that specialize in third-party logistics are very good at what they do.

Also, while FEMA might want to store its own computers and other sensitive materials, basics such as tarps and generators are so widely available that the agency does not necessarily need to own them.

"It's not always the wisest course of action for FEMA to be storing those [materials] in FEMA facilities, then move them over FEMA trucks . . . when there is the possibility and quite high likelihood that the private sector already has the commodity or supplies available closer," Bourne says.

The new third-party system will be the primary focus of FEMA's logistics operation in fiscal 2008, according to Bourne. The agency will develop an acquisition plan over the next few months and eventually release a contract solicitation for a logistics provider, or possibly more than one.

Auditors criticized FEMA's Logistics Information Management System prior to and during Hurricane Katrina, which exposed large-scale problems in the agency's ability to deliver supplies fast enough to the areas that needed them.

In particular, auditors pointed out that the system could not share information with state and local agencies and could not indicate when items would ship or arrive.

FEMA replaced that system with one called Total Asset Visibility, which uses Global Positioning Systems to help with tracking. Bourne says using GPS units in the immediate aftermath of Hurricane Katrina was the first step toward a different way of looking at logistics. He says that over the last eight months the agency has been gathering information on private sector best practices in supply chain management.

All FEMA trucks and packages now have GPS units on them, and Bourne says FEMA will go beyond that with other new technology to give officials -- whether in a Washington office or in the field -- an accurate picture of where items are, down to the pallet or product level.

"I want to know where every single generator pack is in this given region and what's their time of delivery," Bourne says, describing the thought process of a hypothetical FEMA official during a disaster. "That information has to be seamless, it has to be visible, accessible in real time and provide us a picture of what's moving and when."

The agency also has remodeled the logistics division as the separate Logistics Management Directorate; previously, the operation was a part of the larger Emergency Management and Response Directorate. What began with about two dozen staffers will have roughly double that number by the end of fiscal 2008.

"In the broadest and most humble of terms, it's the civilian logistics piece for emergencies, like the Defense Logistics Agency is for the military," Bourne says. "Obviously, they don't have the same capabilities. But somebody has to be that nucleus."

That analogy is not accidental. In April, FEMA hired William "Eric" Smith, the senior executive assistant to the director of the Defense Logistics Agency, to head its new directorate. Bourne says Smith has been reengineering the FEMA logistics operation.

"It doesn't make sense for FEMA to store commodities when DLA does it and in quantities far greater than what we'd ever need," Bourne says. "They do in a month what FEMA might do in a couple of years."

The same could be said for large retailers. Bourne says FEMA always has encouraged state and local governments and emergency responders to work out agreements with the private sector, as Texas has done. But he admits that Hurricane Katrina -- during which Wal-Mart, Home Depot and other companies contributed supplies -- highlighted that need.

"It's just a point of fact that those resources that are closer are the ones that need to be tapped first," Bourne says. "More of that relationship has to be built."

]]>

A Closer Look

Robert Brodsky and Zack Phillips — Wed, 15 Aug 2007 00:00:00 -0400

With turnover in Congress, civilian contracting offices face increased oversight.

After spending much of 2005 on the defensive in the wake of countless contracting scandals spurred by Hurricane Katrina, civilian acquisition offices had hoped for a more low-key, back-to-basics year. It didn't go quite as planned.

Within weeks of assuming control of Congress, Democrats initiated a renewed level of oversight of procurement, shining a light on noncompetitive deals, mismanaged and wasteful contracts and ethical missteps at the General Services Administration. Procurement reform now has become a hot topic on Capitol Hill, and companies are preparing-albeit begrudgingly-for some of the most significant contracting legislation in recent memory.

The leading proponent for change has been Rep. Henry A. Waxman, D-Calif., who has held hearings examining abuse in Homeland Security procurements, sponsored a bill to reduce the use of sole-source contracts and released a database of 189 contracts linked to waste, fraud or mismanagement. "A major problem is that while contract spending has soared, oversight has been discouraged and account-ability undermined," Waxman said in May at a contracting forum hosted by the Center for American Progress. "The result is mistakes have been made in virtually every step of the contracting process, from pre-contract planning through contract award and oversight to recovery of contract overcharges."

In April, for example, the Education Department inspector general found the agency's management of a key information technology services contract was inadequate. The same month, the National Toxicology Program terminated a contract with a consulting firm it had hired to assess how dozens of potentially toxic chemicals affect women's reproductive health, after reports surfaced that the company had ties to the chemical industry. Waxman, chairman of the House Committee on Oversight and Government Reform, in particular has focused on the rise of no-bid contracts. The committee released a report in late June concluding that half the $412 billion in federal procurements in fiscal 2006 were awarded with less than full and open competition. A Waxman bill that has passed the House would require agencies to reduce the use of sole-source contracts.

The nonprofit Project on Government Oversight says about 40 percent of government contracts are let without competition. Industry representatives say those numbers are inflated, in some cases counting sole-source task orders from competitively awarded contracts as no-bid. But an analysis of data from the nonprofit watchdog OMB Watch reveals that most civilian agencies de-creased contract competition from fiscal 2005 to 2006, in some cases substantially.

Interagency contracting has been another area of concern, making the Government Accountability Office's list of high-risk areas. When an agency buys commonly needed goods and services through another agency's contract for a fee, it can save money by leveraging the government's buying power. But GAO and watchdog groups say this type of spending has soared without a commensurate rise in the number of personnel needed to manage it. Spending through General Services Administration schedules has increased by $4 billion in the last two years, according to GAO.

The shortage of procurement workers is another looming problem receiving attention. The Acquisition Advisory Panel, which after two years of work released in December a slew of recommendations on the contracting system, called for the expansion of the acquisition workforce. And Waxman's bill would set aside 1 percent of federal procurement spending for contract management and oversight. "Procurement experts can debate whether that's the right percentage or not," Waxman said at the contracting conference. "But we need more resources, and that should not be in dispute."

]]>

No-Bid Worries

Zack Phillips — Wed, 15 Aug 2007 00:00:00 -0400

DHS finds itself defending companies that get its contracts.

If the Homeland Security Department's procurement focus in fiscal 2005 was rebuilding the Gulf Coast region after the devastating effects of Hurricane Katrina, then much of its efforts in fiscal 2006 could be described as addressing post-Katrina contracting problems.

One of those areas is no-bid contracts, or awards with less than full and open competition. Nearly half the department's contract awards in fiscal 2005 were sole-source, no-bid procurements, according to Rep. Bennie Thompson, D-Miss. DHS puts that figure at 38 percent. Although the expediency required by sudden emergencies such as hurricanes Katrina and Rita represent the most persuasive case for fewer competitive awards, that sort of acquisition leaves the government vulnerable to wasteful and abusive contracting arrangements, auditors say. That certainly proved true in the case of some Katrina recovery contracts. Federal agents are investigating 11,000 cases of potential fraud, though that figure includes thousands of cases of suspect aid claims by individuals.

In particular, some on Capitol Hill have focused on the issue of awarding contracts to companies with dubious or checkered pasts. The company hired to recover bodies in Louisiana is owned by a corporation sued for mishandling bodies in Florida. A Texas firm hired to provide ambulances had been beset with legal and financial troubles before the hurricanes hit. The Washington nonprofit watchdog Project on Government Oversight says three of the four top Katrina contractors have 37 instances of past misconduct among them.

Industry representatives say those figures are inflated and include cases in which the company was never found to have done anything wrong. Still, the fiscal 2008 Homeland Security authorization bill would require contractors to certify that they are not late on taxes and to disclose any role in creating part of the contract vehicle, which could be a conflict of interest.

One of the most frequently cited causes of wasteful and fraudulent contracts is Homeland Security's continuing shortage of qualified procurement personnel, which has attracted the attention of auditors and others since the department's formation in 2003. In particular, DHS' Office of Procurement Operations, created to handle contracts for the agencies that did not bring their own procurement shops to DHS, continues to employ fewer people than many say are needed. The department's chief procurement officer, Elaine Duke, says building the acquisition workforce is her top priority.

The dearth of contract officers leads to other practices that can be problematic. One is interagency contracting-purchasing goods and services from another agency's pre-established contracts, for a fee.

DHS says about $6 billion of its $22 billion in obligations for fiscal 2006 went to other agencies in the form of these kinds of agreements. The personnel shortage also can lead to hiring contractors or paying private sector firms to help DHS devise and manage programs.

These lead systems integrator contracts are fraught with their own perils, evidenced by the glaring problems uncovered this year in Deepwater, the Coast Guard's fleet modernization acquisition. In addition to escalating costs and delayed timelines, some of the new patrol boats built by the contractor were found to be unseaworthy. The Coast Guard since has taken much of the program management away from the contractor, and its new consolidated procurement directorate-a change initiated before many of the Deepwater problems were revealed-began operations in July. Still, some on Capitol Hill think the agency's changes do not go far enough. One House bill would require the Coast Guard to remove the contractor, a partnership between Lockheed Martin Corp. and Northrop Grumman Corp., by 2011 or earlier if DHS certified that was possible.

]]>

Big Contracts, Big Problems

Katherine McIntire Peters, Robert Brodsky, and Zack Phillips — Wed, 15 Aug 2007 00:00:00 -0400

Lead systems integrators are in the hot seat as major programs flounder.

What a difference a few years make. Five years ago, with great optimism, the Coast Guard let the largest contract in the agency's history to overhaul its fleet of aircraft, boats and cutters, and tie all those assets together with a communications system that would promote efficiency and effectiveness. The same year, the Army let an equally expansive contract to develop suites

of ground, air and robotic weapons, linked by a communications system that would lift the fog of war and dramatically improve battlefield operations.

Today, both the Coast Guard's Deepwater contract and the one for the Army's Future Combat Systems are under fire for cost and schedule overruns and performance problems. In both cases, the agencies turned to lead systems integrators to manage complex multibillion-dollar programs that were to extend over decades. While the programs have very different technical requirements and different contractors-Deepwater is managed jointly by a consortium created by Lockheed Martin Corp. and Northrop Grumman Corp. called Integrated Coast Guard Systems; Future Combat Systems is managed jointly by Boeing Co. and SAIC-they've experienced similar problems. In both cases, government auditors say the agencies have failed in their oversight roles and given contractors too much leeway in determining requirements, selecting suppliers, managing subcontractors and validating performance, things traditionally done by government employees.

The Coast Guard and the Army aren't the only agencies turning to LSIs to manage large, complex programs. NASA "partnered" with United Space Alliance to manage the space shuttle program. Defense turned to Boeing as lead contractor on the National Missile Defense Program, and the Air Force turned to Booz Allen Hamilton to manage its Transformational Communication System.

Homeland Security, the Coast Guard's parent department, also has turned to Boeing to manage SBInet, a $2 billion effort to create a "virtual fence" along the border. The contract, which initially guarantees Boeing $67 million over three years but which auditors say could eventually cost as much as $30 billion, puts the contractor in charge of integrating sensors, cameras and other equipment to improve the Border Patrol's capabilities.

All these contracts are huge and technologically complex. They strive to create what Defense calls "interoperability"-the ability to share data seamlessly across disparate platforms manufactured by different contractors, says Eugene Gholz, a defense industry expert and assistant professor at the University of Texas Lyndon B. Johnson School of Public Affairs in Austin.

Americans place great and sometimes undeserved faith in technology and private sector management, Gholz says. "It's part of our culture. We tend to think the private sector does a lot of things better. That may or may not be true." Contracting trends are cyclical, he says, and the use of lead systems integrators today is not very different from a similar concept called Total Package Procurement promoted by then-Defense Secretary Robert McNamara in the 1960s. The idea was that by bundling contracts and giving contractors a lot of discretion, they would manage more efficiently and effectively, he says. "It didn't turn out to be true then, and it isn't true now."

"The truth is, everyone lacks this capacity," Gholz says. He predicts a return to smaller, more manageable contracts in the future, with more realistic expectations for what technology can and cannot accomplish.

Increased Risk

Government Accountability Office chief David M. Walker told the Senate Homeland Security and Governmental Affairs committee in July that agencies' reliance on lead systems integrators increases risk by complicating the relationship between government and contractor. The risk, Walker said, stems from the fact that the contractor is given greater discretion to make program decisions. "Along with this greater discretion comes the need for more government oversight and an even greater need to develop well-defined outcomes at the onset."

Walker said GAO had been concerned about the Coast Guard's acquisition approach to Deepwater from the onset, precisely because such oversight was lacking, noting that the agency had not held the integrator accountable for achieving competition among Deepwater suppliers.

"On the other hand, a close partner-like relationship such as the one the Army has with its Future Combat Systems integrator can also pose risks," Walker said. "Specifically, the government can become increasingly invested in the results of shared decisions and run the risk of being less able to provide oversight compared with an arms-length relationship."

Cost overruns, performance problems and slipped schedules are hardly unique to LSI contracts, and they even can count some successes. Engine upgrades to key helicopters performed under Deepwater proved their worth during the Coast Guard's Gulf Coast rescue operations following Hurricane Katrina and likely resulted in the agency's ability to save many more lives than it otherwise would have with less capable aircraft. Also, maritime patrol aircraft and several patrol boats have been delivered on schedule with few hitches.

The Army in July approved early production planning for FCS Manned Ground Vehicles and spin-out technologies that are to be incorporated into the current force beginning next year, a decision that shows "FCS technologies are maturing according to plan and represent a crucial step toward meeting program production objectives," said Dennis Muilenburg, vice president and general manager at Boeing Combat Systems and the FCS program manager, in a statement.

And DHS officials believe they have learned from past mistakes, and their newest LSI effort, SBInet, will be a model for future integration endeavors. "I am frequently asked if SBInet will turn into a Deepwater problem," Undersecretary for Management Paul Schneider said at a June 7 hearing before the Senate Homeland Security and Governmental Affairs Committee. "The answer is unequivocally 'no.' "

For one, SBInet program staff will not share office space with contractor employees. Gregory Giddens, the SBInet program manager who was the deputy program executive officer for Deepwater, lists several other major differences from the Coast Guard program. The SBInet acquisition forces Boeing to compete task orders, prohibiting contractual arrangements in which subcontractors automatically receive certain kinds of work. The contract also includes off-ramps that would allow DHS to discontinue the project if it does not approve of Boeing's work, and makes clear that DHS can acquire certain solutions from a vendor besides Boeing.

Also, the acquisition does not call for the purchase of large capital assets, and instead will employ a collection of currently available technology. "One of the lessons we learned is, when we put out the request for proposals and evaluated the bids, we actually looked not to get cutting-edge Star Wars-types of proposals, but proven technology that has actually been deployed in the field," Homeland Security Secretary Michael Chertoff said at a Feb. 8 House Homeland Security Appropriations Subcommittee hearing.

Additionally, the Army will conduct an independent assessment of SBInet's interim operating capabilities at the end of the project's first initiative. That is one reason why Schneider told senators that SBInet is a model for how spiral acquisition and risk reduction ought to be done. "Because this is a modular and scalable architecture, we will be in a position to make important trade-offs on performance, risk and total system cost very early," he said. "All this in less than one year after this contract was awarded."

The only problem is that the first initiative, known as Project 28-for the 28 miles of Arizona border along which Boeing has built a wireless network, nine towers with cameras, sensors and radar and other communication equipment-is already behind schedule. The delays were not announced until a day after the June 7 hearing, angering lawmakers. The department has not announced an expected completion date. DHS officials say it is better to delay now to fix technological glitches than to push forward to meet the early deadlines.

Workforce Problems

While good historical data on acquisition staffing is lacking, "It is clear that the size of the workforce has declined, while the size of government expenditures for goods and services has risen significantly," Walker said. The Congressional Re-search Service reported in March that the Defense acquisition workforce was cut by more than half between 1994 and 2005. Not only is staff shrinking, but the complexity of the systems being acquired is growing, which further contributes to the lack of in-house expertise, CRS noted.

The Army and the Coast Guard turned to systems integrators for essentially the same reason-the services lacked the expertise and staffing to manage the complex programs themselves. Among the workforce challenges Walker cites are:

Key program staffers rotate too
frequently, promoting myopia and reducing accountability.
The revolving door between industry and government creates potential conflicts of interest.
There is insufficient oversight for recurring and systemic problems.
A lack of high-level attention reduces the chances of program success.

The Defense Department's 2007 Acquisition, Technology and Logistics human capital strategic plan seeks to counter that trend with a multiyear effort that establishes goals and objectives to determine needed skills and expertise, builds the workforce accordingly, provides continuous training and keeps the most talented and experienced people from leaving for the private sector.

Agencies always will have trouble attracting and hiring the people they want in acquisition, Gholz says. The private sector always will be able to offer more money. And for agencies such as the military services, where contracting debacles can spell disaster on the battlefield, the acquisition workforce always will be viewed with less than complete trust. But agencies can look for expertise outside their own workforces. Independent and federally funded research and development centers can and do provide valuable advice. "You don't need these experts to all be government employees-they just need to be different from the people selling," says Gholz.

Action on Capitol Hill

Faced with the shadow of the Deepwater debacle and the rising cost overruns that have plagued the Army's Future Combat Systems, legislators recently stepped in to try to prevent the Defense and Homeland Security departments from using lead systems integrators. A provision in the 2008 House Defense authorization bill would prohibit the Pentagon from awarding any new contracts for LSI functions in the procurement of major systems as of Oct. 1, 2011. The amendment, sponsored by Duncan Hunter, R-Calif., ranking member of the Armed Services Committee, and Gene Taylor, D-Miss., chairman of the Subcommittee on Seapower and Expeditionary Forces, directs Defense to replenish its depleted acquisition workforce over the next four years to offset the talent and management gap that will be left by excising LSIs. The Defense secretary also must submit a plan by Oct. 1, 2008, "establishing the appropriate size of the acquisition workforce to accomplish inherently governmental functions."

"The problem [with LSIs] is that you are taking someone who is profit-driven and throwing them the keys to the enterprise," Taylor says. "So, instead of rewarding them, we are taking these projects and moving them back in house."

House officials insist the provision is not intended to affect current Pentagon LSI efforts. Future Combat Systems and the National Missile Defense Program, along with the Air Force's Transformational Communication System, appear safe unless the contracts are put up again for competitive bidding. Sources familiar with the bill, however, say the language is loose enough that the Pentagon could interpret it more broadly.

Defense officials declined to comment on the legislation, but the White House says the LSI provision, along with others in the bill that limit the length of noncompetitive contracts and maximize the use of fixed price procurements, are "counterproductive and not of practical help in strengthening the acquisition process."

The Senate's version of the bill addresses cost overruns, oversight and performance requirements for major Defense weapons systems, but does not directly address LSIs, and it's unclear whether the chamber will endorse a complete ban on their use. In fact, the Senate bill rebukes an effort by the House to cut more than $860 million from FCS to rein in its cost.

If the lead systems integrator approach appears on shaky ground within Defense, it may be on life support at Homeland Security. While the House allocated full funding for SBInet, the chamber's Deepwater Program Reform bill requires the Coast Guard to dump the Lockheed Martin-Northrop Grumman team by no later than October 2011, while the Senate would allow only for the completion of outstanding delivery and task orders. The Coast Guard, which wrested control of the $24 billion project away from its embattled LSI team last April, signed a new contract in June allowing Integrated Coast Guard Systems to continue working on the contract through January 2011, but legislative action could derail that deal.

"Frankly, no matter what happens with these LSI contracts or these reforms that are being proposed right now, those trends and reasons [agencies turned to LSIs in the first place] are going to continue," Gholz says. "There's always going to be an attraction to contracts like this."

]]>

Shuffling Supplies

Zack Phillips — Wed, 15 Aug 2007 00:00:00 -0400

FEMA turns to the private sector to make sure disaster areas get ample provisions-and fast.

The state of Texas has decided that it cannot count on the Federal Emergency Management Agency for help in a disaster. So the state's emergency management division has made arrangements with big-box retailers such as Wal-Mart and Home Depot to provide water, ice and other critical supplies to its citizens in a crisis. After what happened with hurricanes Katrina and Rita, the assumption now is that FEMA will provide nothing.

If they can get supplies that way, a FEMA spokesman approvingly told the Houston Chronicle, "that's just one last thing we don't have to coordinate for." This response may sound flippant, but it actually illustrates the overhaul of FEMA's realigned logistics program, which is beginning to take shape.

The most salient change is an increased reliance on the private sector-the outsourcing of much of the agency's logistics to a contractor or contractors that will be in charge of acquiring, storing and moving emergency supplies. This arrangement, known as third-party logistics, is common in many industries and should make FEMA's supply lines shorter and quicker, says Marco Bourne, FEMA's director of policy and program analysis. Companies that specialize in third-party logistics are very good at what they do. Also, while FEMA might want to store its own computers and other sensitive materials, basics such as tarps and generators are so widely available that the agency does not necessarily need to own them. "It's not always the wisest course of action for FEMA to be storing those [materials] in FEMA facilities, then move them over FEMA trucks . . . when there is the possibility and quite high likelihood that the private sector already has the commodity or supplies available closer," Bourne says.

In particular, auditors pointed out that the system could not share information with state and local agencies and could not indicate when items would ship or arrive.

All FEMA trucks and packages now have GPS units on them, and Bourne says FEMA will go beyond that with other new technology to give officials-whether in a Washington office or in the field-an accurate picture of where items are, down to the pallet or product level.

And FEMA has formed a partnership with DLA for the procurement, movement and delivery of staples such as water or ready-to-eat meals, for which FEMA previously did all the contracting and shipping itself. "It doesn't make sense for FEMA to store commodities when DLA does it and in quantities far greater than what we'd ever need," Bourne says. "They do in a month what FEMA might do in a couple of years."

The same could be said for large retailers. Bourne says FEMA always has encouraged state and local governments and emergency responders to work out agreements with the private sector, as Texas has done. But he admits that Hurricane Katrina-during which Wal-Mart, Home Depot and other companies contributed supplies-highlighted that need.

"It's just a point of fact that those resources that are closer are the ones that need to be tapped first," Bourne says. "More of that relationship has to be built."

]]>

Spiraling Into Control

Zack Phillips — Wed, 08 Aug 2007 00:00:00 -0400

The Homeland Security Department is working on a device to solve the problem as part of a new first responder technology development program called TechSolutions. Housed in the Science and Technology Directorate, DHS' research and development arm, the program aims to take capability gaps identified by police, firefighters, emergency medical teams and bomb squads and develop a prototype solution quickly and cheaply.

Any first responder technology project that can produce a prototype within 12 to 15 months for less than $1 million is eligible. The goal is to develop a solution that satisfies at least 80 percent of first responders' requirements. This piecemeal approach, called spiral development, is popular in software and weapons manufacturing because it allows an early version to be released quickly, with later updated versions, if necessary.

"We're very innovative with the names," jokes Jose Vazquez, who ran TechSolutions at ONR and now heads DHS' TechSolutions. "It was very similar, except first responders for the Navy are sailors and Marines. Here, they're fire, police, EMTs and bomb disposal."

Vazquez came with Cohen to DHS last August as a special assistant to the undersecretary, before assuming his new position as director for first responder technologies. He says TechSolutions is driven from start to finish by first responders to ensure that "what is delivered is something that meets their needs. This is not done in a vacuum."

To jump-start the $10 million program, DHS solicited the InterAgency Board for Equipment Standardization and Interoperability, a quasi-governmental group that develops nationwide requirements for incident response. As a result, it received 15 of the group's highest-priority requirements. One of them is a 3-D situational awareness device that can locate fire crews inside a building.

Vazquez says DHS is working on a "cocktail of solutions" that employ GPSs, altimeters and dead reckoning -- a navigation system that advances a course using a known position and variables such as speed and time.

The goal is to release a prototype by April 2008 that can estimate first responder positions within a meter. But Vazquez says the department will introduce a version with 3-meter accuracy by September to begin testing. Such spiral development could expedite the development of the more accurate version, Vazquez says, because lessons learned during the testing of the less accurate model could be incorporated into the later design.

Vazquez's group -- which currently has one other staffer, but eventually will include two more -- is developing other technologies. One is an ocular scanner that could screen emergency responders' eyes to determine whether they had been exposed to certain toxic chemicals. (Fires frequently give off poisonous chemicals in buildings, Vazquez says.)

Another is a remote triage device that could determine from afar an individual's pulse rate, blood pressure and other vital signs. This would come in handy in the event of a mass casualty incident, Vazquez says, because emergency responders could determine before they arrived on the scene which victims to triage. TechSolutions also is looking at what improved tactics and training it can offer to emergency personnel who respond to an improvised explosive device attack in the United States.

Cohen arrived at the department in August 2006 on the same day news broke of the foiled liquid explosive plot to down transatlantic airliners. He had to set up an ad hoc group at the directorate to look at that threat immediately.

"The ability to do these kinds of things always existed in the department," he says. "But if you don't have a TechSolutions-type budget and a group doing that, then for each event you're going to have to put together a new group and work through the mechanics."

]]>

Security Theater

Zack Phillips — Wed, 01 Aug 2007 00:00:00 -0400

There's little downside to being alarmist about terror, so we spend too much on measures that evoke feelings of security without actually improving it.

At the time, it seemed reasonable. Richard Reid tried to ignite explosives hidden in his shoe while aboard a December 2001 flight from Paris, so Congress banned butane lighters on planes.

But in retrospect, the costs of the ban outweighed the benefits. Airport retailers had to stop selling lighters. Lighter vendor Zippo Manufacturing Co. laid off more than 100 workers in part because of the prohibition. Transportation Security Administration screeners at one point had to confiscate 30,000 lighters every day, quadrupling the amount of garbage the agency had to dispose of. TSA even had to hire a contractor to help with all the extra trash.

Meanwhile, the security benefit was minimal. Passengers were allowed to bring matches on board planes, so a determined bomber still could ignite explosives. TSA Administrator Kip Hawley later acknowledged that the search for lighters distracted screeners from the much more important task of watching for explosives and bomb components. As of Aug. 4, Hawley announced in late July, the ban will be lifted.

Author and security consultant Bruce Schneier has dubbed such cost-ineffective measures "security theater" because they evoke feelings of security without actually improving it. But it's easy to understand how the lighter ban came to pass. Lawmakers wanted to show voters they were doing something in response to Reid and the Sept. 11 terrorist attacks. Airlines were eager to restore confidence and happy to let the federal government take on the cost and responsibility of baggage screening. Neither had a motivation to argue that shoe bombers did not represent a serious enough threat to aviation to merit the lighter ban, or even to ask the question of whether they posed such a threat. Alarm overpowered reasonable cost-benefit analysis and a measured response.

Welcome to homeland security, where everyone has an incentive to exaggerate threats. A Congress member whose district includes a port has little to lose and much to gain by playing up the potential for container-borne terrorism. A city with a dam talks up the need to protect critical infrastructure. A company selling weapons-detection technology stresses the vulnerability of commercial aviation. A civil servant evaluating homeland security grant applications has an interest in over-estimating dangers that might be addressed by grantees rather than denying funding and risk blame in the event of a disaster.

Each has an incentive to be alarmist. Hardly any of the players has good reason to contemplate terrorism reasonably or to consider threats in terms of probability and finite budget resources. That lonely job falls to the Homeland Security Department, which, four years after its creation, is just beginning to integrate the complicated notion of risk analysis into its work. Most observers credit Homeland Security Secretary Michael Chertoff with talking enough about risk-not just threats-to bring some improvement. But they also say the climate of fear makes it nearly impossible to have a dispassionate discussion about the real threat of terrorism and the response it truly merits.

Overblown

John Mueller suspects he might have become cable news programs' go-to foil on terrorism. The author of Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them (Free Press, 2006) thinks America has overreacted. The greatly exaggerated threat of terrorism, he says, has cost the country far more than terrorist attacks ever did.

Watching his Sept. 12, 2006, appearance on Fox & Friends is unintentionally hilarious. Mueller calmly and politely asks the hosts to at least consider his thesis. But filled with alarm and urgency, they appear bewildered and exasperated. They speak to Mueller as if he is from another planet and cannot be reasoned with.

That reaction is one measure of the contagion of alarmism. Mueller's book is filled with statistics meant to put terrorism in context. For example, international terrorism annually causes the same number of deaths as drowning in bathtubs or bee stings. It would take a repeat of Sept. 11 every month of the year to make flying as dangerous as driving. Over a lifetime, the chance of being killed by a terrorist is about the same as being struck by a meteor. Mueller's conclusions: An American's risk of dying at the hands of a terrorist is microscopic. The likelihood of another Sept. 11-style attack is nearly nil because it would lack the element of surprise. America can easily absorb the damage from most conceivable attacks. And the suggestion that al Qaeda poses an existential threat to the United States is ridiculous. Mueller's statistics and conclusions are jarring only because they so starkly contradict the widely disseminated and broadly accepted image of terrorism as an urgent and all-encompassing threat.

American reaction to two failed attacks in Britain in June further illustrates our national hysteria. British police found and defused two car bombs before they could be detonated, and two would-be bombers rammed their car into a terminal at Glasgow Airport. Even though no bystanders were hurt and British authorities labeled both episodes failures, the response on American cable television and Capitol Hill was frenzied, frequently emphasizing how many people could have been killed. "The discovery of a deadly car bomb in London today is another harsh reminder that we are in a war against an enemy that will target us anywhere and everywhere," read an e-mailed statement from Sen. Joe Lieberman, I-Conn. "Terrorism is not just a threat. It is a reality, and we must confront and defeat it." The bombs that never detonated were "deadly." Terrorists are "anywhere and everywhere." Even those who believe it is a threat are understating; it's "more than a threat."

Mueller, an Ohio State University political science professor, is more analytical than shrill. Politicians are being politicians, and security businesses are being security businesses, he says. "It's just like selling insurance-you say, 'Your house could burn down.' You don't have an incentive to say, 'Your house will never burn down.' And you're not lying," he says. Social science research suggests that humans tend to glom onto the most alarmist perspective even if they are told how unlikely it is, he adds. We inflate the danger of things we don't control and exaggerate the risk of spectacular events while downplaying the likelihood of common ones. We are more afraid of terrorism than car accidents or street crime, even though the latter are far more common. Statistical outliers like the Sept. 11 terrorist attacks are viewed not as anomalies, but as harbingers of what's to come.

Demystifying Security

Sept. 11 was so dramatic and scary that even suggesting that some of the resulting fear is unjustified seems blasphemous. Indeed, the release in July of a new National Intelligence Estimate and its reports of a resurgent al Qaeda served to renew and stoke those fears. But the point is not that terrorists don't exist, or that terrorist attacks won't happen. It's that the pervasive alarm about terrorism obscures the most important question the nation must grapple with: "What level of protection is enough?" Seeking 100 percent security is quixotic. There always will be some risk, but how much can we live with?

This question remains unanswered because the political climate created by alarmists, however well-intentioned, prevents it from being raised. Those who try are quickly punished. Democratic presidential candidate John Kerry said in 2004 that the goal should be to reduce terrorism to the level of organized crime-a nuisance but not "the focus of our lives." The Bush campaign immediately pounced, calling Kerry "unfit to lead," and he never used such rhetoric again.

The question "How much risk can we live with?" cuts to the heart of homeland security because the answer should guide the way government spends money, the primary tool for fighting terrorism. We simply cannot protect everything, and because budget resources are limited, spending security money protecting one asset means leaving another vulnerable. We must spend effectively and strategically. That means employing sound cost-benefit analyses to reduce risk to manageable levels is the only reasonable goal. Industry has a word for this kind of strategic thinking: risk management.

"Risk management is about playing the odds," writes Schneier in Beyond Fear: Thinking Sensibly About Security in an Uncertain World (Copernicus Books, 2003). "It's figuring out which attacks are worth worrying about and which ones can be ignored. It's spending more resources on the serious attacks and less on the frivolous ones. It's taking a finite security budget and making the best use of it. We do this by looking at the risks, not the threats."

Schneier wants to demystify security for the masses. He rails against the paternalism of politicians and pundits who, he says, purport to have the answers to complex security dilemmas. Schneier, who once implemented security solutions for the Defense Department and has consulted for other governments and financial institutions, says there are no right answers. Security is all about trade-offs, and anyone can make those judgments.

'Peanut Butter' Spending

DHS has received $130 billion in budget authority since 2001 and that certainly buys more security. But more security does not necessarily make the country more secure. How much risk has that $130 billion bought down? No one knows because DHS has neither a long-term, risk-based strategic plan nor a comprehensive way of measuring risk reduction. Mueller, Schneier and many others suggest that politics, not risk, determines how the department spends money. It's not the politics of insider contracts and influence peddling, but the need to be seen as responding somehow to bad news while at the same time not knowing which reaction, if any, is appropriate.

Examples of questionable priorities abound. Intelligence and warning capabilities are less visible than detectors and other more high-profile security measures, but nearly everyone agrees they are vital to counterterrorism. Yet such programs account for less than 1 percent of government spending on homeland security, according to the Congressional Research Service.

Veronique de Rugy, a fellow at the American Enterprise Institute for Public Policy Research and a visiting scholar at George Mason University's Mercatus Center, has studied DHS' budget extensively. She points out that TSA will have spent more than $14.7 billion in five years screening airline passengers when it could have reduced most of the risk with a single measure that will cost only $100 million over 10 years: reinforcing cockpit doors. A would-be hijacker's options are severely limited if the cockpit is inaccessible.

De Rugy sees significant problems in DHS grant programs. By the end of fiscal 2008, DHS will have given $12 billion in grants to state and local governments without a way to measure whether the investment has reduced the risk of terrorism. In particular, de Rugy faults congressional requirements that originally guaranteed each state a minimum allotment. Instead, DHS should be focusing on a few high-risk areas, she says. "They think 'If we do something about it, no matter what [good it does], then we can claim we're on top of everything,' which is exactly the opposite," says de Rugy. "If you're spread really thin, you're not achieving anything."

Chertoff refers to this as "spreading the money around like peanut butter on a piece of bread, with everybody getting a little bit." He opposes it. In his first major address as secretary in March 2005, Chertoff said DHS actions should be dictated by risk, not by threats, even though threats capture the focus and imagination of the public and media. "A terrorist attack on the two-lane bridge down the street from my house is bad, but has a relatively low consequence compared to an attack on the Golden Gate Bridge," he said.

The secretary's influence is visible in homeland security grant programs. At first, the department crudely calculated risk by using population as a proxy. Later, figures for the extent of threat and the presence of critical infrastructure were added to the equation. Chertoff introduced a new equation: Risk is equal to threat times vulnerability times consequence.

For the first time, DHS is considering probabilities in the calculations that drive grants and other security investments.

And after the department's controversial Urban Areas Security Initiative grants ignited a firestorm last year, officials refined the program. Applicants now must submit an investment justification for the funds they are requesting. The list of critical infrastructure considered when calculating a city's risk now has only 2,100 facilities-mostly dams, power plants and other significant structures, according to Chertoff. (The fiscal 2006 list, mocked for including a popcorn factory and a hot dog stand, included 200,000 assets.) And perhaps most significantly, DHS now rates all parts of the country as equally vulnerable to attack. Thus, the likely consequences of an attack account for 80 out of 100 "risk points," making that the predominant factor in choosing where to allocate $746 million. The other 20 points are determined by threat analyses.

Risk Simulator

Risk management long has been used in the finance, insurance and engineering fields. But applying it to counterterrorism is much more difficult because uncertainty about terrorists' intent and capabilities requires some guesswork. Chertoff gets credit for elevating the concept of risk, but even his backers say the department has a long way to go. "I applaud him; he introduced the idea of risk and it has caught on," says Randy Beardsworth, formerly DHS' assistant secretary for strategic plans. "But it's caught on at the 101 level. We need to move to the graduate level-the 501." This is where risk gets more complicated. Beardsworth says the government is much better comparing risk at the tactical level-one nuclear plant versus another-than at the strategic level. Is there more risk associated with air travel or mass transit, for instance?

Before leaving DHS in September, Beardsworth was leading a working group to develop a strategic risk tool for Chertoff. The tool would allow him to compare the risk reduction impact of different programs. In one case, DHS could spend millions more dollars and still not lower the risk appreciably. In another case, a small additional investment would reduce risk substantially. In short, the DHS secretary could articulate clear and understandable reasons for making investments. "The cynics will say it's all politics," Beardsworth says. "But as a career guy, I really don't care. This is the right way to look at how to spend money in the homeland security world."

Beardsworth says work on the tool stalled after he left. It seems to have been picked up by the new Risk Management and Analysis Office in the Directorate for National Protection and Programs created last year. That office began functioning in April, the first time a single entity has collected risk information departmentwide. Its first tasks are cataloging the risk management methodologies DHS component agencies use and developing a single set of common principles.

"It'd be a nice, neat area to say there's only one [risk] formula," says Tina Gabbrielli, acting director of the Risk Management and Analysis Office. "If that were the case, I'd have a pretty easy job. What I learned quickly is that when it comes to risk and risk analysis methodologies, one size does not fit all." The long-term goal is to allow the DHS secretary to know, for instance, how the department can best reduce risk over the next five years. But Gabbrielli admits that capability is a long way off.

The level of difficulty becomes clear when considering actual applications-transportation systems, for example. Does an improvement in an airport's weapons screening technology really buy down any risk? Or does it simply shift risk, pushing the terrorist to find a way around checkpoints, such as an employee entrance. Does outfitting commercial jets with systems to defend against shoulder-fired missiles-which could cost as much as $1 million per plane-reduce the risk of attack or simply motivate the terrorist to aim his missile at another target?

This is where a new risk management analysis tool comes in. TSA issued a solicitation in late June for a computer simulator that would measure the effectiveness, in terms of risk reduction, of various aviation countermeasures. The simulator would use terrorist teams and government teams and would test multiple defense systems to find the most effective sequence of countermeasures.

The problem, de Rugy points out, is that even though DHS is making progress implementing risk management, more terrorist attacks likely will occur. And when they do, the alarm bells will ring, making it nearly impossible to honestly debate security priorities. "Even if it's, like, 50 people being killed, which is horrible, it's very likely it's something not worth investing billions of dollars," she says. "And who's going to be saying that?"

]]>

Spiraling Into Control

Zack Phillips — Wed, 01 Aug 2007 00:00:00 -0400

An intriguing DHS program fills safety gaps fast with low-cost technology.

When firefighters rush into a burning building, their chief manages the incident from outside. Chiefs would love to have a tool pinpointing the precise location of their crews inside a building at any moment, in case the fire changes direction or part of the building collapses. But metal and steel can interfere with the signal from, say, a Global Positioning System. And most GPSs would not be able to distinguish between parallel spaces on different floors.

TechSolutions is the brainchild of DHS Undersecretary for Science and Technology Jay M. Cohen. In less than a year, Cohen has remodeled the directorate with several of the innovations he brought to the Office of Naval Research, where he was chief before joining DHS. One of his ONR programs was TechSolutions. "We're very innovative with the names," jokes Jose Vazquez, who ran TechSolutions at ONR and now heads DHS' TechSolutions. "It was very similar, except first responders for the Navy are sailors and Marines. Here, they're fire, police, EMTs and bomb disposal."

Vazquez says DHS is working on a "cocktail of solutions" that employ GPSs, altimeters and dead reckoning-a navigation system that advances a course using a known position and variables such as speed and time.

Vazquez's group-which currently has one other staffer, but eventually will include two more-is developing other technologies. One is an ocular scanner that could screen emergency responders' eyes to determine whether they had been exposed to certain toxic chemicals. (Fires frequently give off poisonous chemicals in buildings, Vazquez says.)

If a similarly urgent need arose now, Vazquez says, TechSolutions could take it on, even if it was unrelated to first responders. The program gives DHS a core group of people dedicated to short-term technology development. "The ability to do these kinds of things always existed in the department," he says. "But if you don't have a TechSolutions-type budget and a group doing that, then for each event you're going to have to put together a new group and work through the mechanics."

]]>

Big Round Numbers

Zack Phillips — Sun, 15 Jul 2007 00:00:00 -0400

From radiation treatment to smallpox vaccines to port security, do agencies really know how much is enough?

Half a million-that's the number of soldiers who would be vaccinated against smallpox, along with 440,000 public health workers, President Bush announced in 2004. But concerns about the safety of the vaccine stalled the effort at about 50,000 vaccinations, and the administration stopped pushing for more. Where did that half a million number come from? How many doses really were needed?

The government's homeland security efforts certainly have weathered their share of criticism, with agencies told in some cases that the amount spent on one threat is too little or that the dollar figure allocated for a different threat is too high. But some critics see a pattern: The numbers coming out of government agencies are big and round, and outsiders sometimes can't figure out where they came from. Bush's fiscal 2003 supplemental budget request asked for $2 billion in grants to states and localities for terrorism preparedness. Stephen Flynn, an author and Council on Foreign Relations fellow, says his understanding is that the amount came from adding up pre-Sept. 11 requests from states and local governments for terrorism preparedness. Administration officials then tripled or quadrupled the sum, and the total came to just under $2 billion.

Since then, attention has focused on the different entities vying for larger pieces of the pie, not why the pie is that size to begin with, according to Flynn. "All the stories are about the food fight . . . not where they came up with the number and is that number adequate and what we are trying to achieve with it," he says.

One big round homeland security number that has caused consternation is 100,000-that's the number of doses of radiation poisoning treatment the Health and Human Services Department requested in September 2005. Acute radiation syndrome is a collection of illnesses that come from exposure to high doses of radiation in situations such as the fallout from a nuclear bomb blast. The solicitation said HHS could buy another 100,000 doses later.

Some say that number seems low, especially compared with HHS' procurement of a next-generation anthrax vaccine, for example. The agency's November 2004 contract with Brisbane, Calif.-based VaxGen called for 75 million doses. That contract has since been canceled, and the department has put out a new notice seeking sources for 25 million doses of next-generation anthrax vaccination. (It has an option for another 40 million doses, which, along with the 10 million doses of current generation vaccine the department bought, would put the stockpile at 75 million doses.) Either way, compared with therapies potentially used after a nuclear blast, some say that's a lot of vaccine, especially for a disease that cannot spread directly from human to human.

"You would have to spread anthrax in high enough concentration to infect people from Boston to Richmond, Va., all at once," says Michael J. Hopmeier, president of the consulting firm Unconventional Concepts Inc. of Mary Esther, Fla. The population of the entire New York City metropolitan area, he notes, is only about 18 million people.

Critics have other qualms about the 100,000 figure. In February 2006, the department separately bought 450,000 doses of two anti-radiation therapies-so-called chelating agents that attach themselves to radiation particles in the body, which helps the victim expel radiation poison through urination. The treatments would work only for certain kinds of dirty bombs and not for nuclear blasts, and they would not help a person who already had developed radiation sickness. The contract gives the department the option to buy another 500,000 doses.

HHS seeks 100,000 doses of one anti-radiation treatment, and 450,000 to 1 million doses of another. Where do those numbers come from? Department officials say they are based on the Homeland Security Department's threat assessment and the interagency Weapons of Mass Destruction Medical Countermeasures Subcommittee's evaluation of the medical consequences of a radiological or nuclear incident. According to a study in the June 2004 issue of the Annals of Internal Medicine, the detonation of a 1-kiloton nuclear bomb in a city of 2 million residents would put 136,500 people in need of hospital care-303,300 in the case of a 10-kiloton bomb.

Sometimes you see the numbers in money not spent. DHS is developing systems to be mounted on civilian airliners that would defend against shoulder-fired missiles. The department requires the systems' cost beat the threshold of $1 million per plane in units of 1,000. Both contractors say its price tag will be below that mark. But where did that $1 million figure come from?

Flynn says the big round numbers obscure larger truths.

"The administration has not worked to help people understand just what exactly they have been spending money on and also developing a discussion in the country," he says. "Every year's press release just gives you the big numbers for port security and you go, 'OK, I guess we're doing a lot for port security because those are big numbers.' "

Flynn says that instead, the government should convene experts to determine the appropriate level of protection for each sector, figure out how much that would cost, and then debate who will pay for it and how. But he says the federal government has a disincentive to establish such benchmarks.

"If they established what that level [of necessary security] is, there'd be real pushback by states and locals saying, 'Where's the money?' " Flynn says. "If the feds set minimum standards requiring this [amount] be spent, it's an unfunded mandate."

The government isn't the only source of big round numbers. The American Chemistry Council, which represents the companies whose plants have become the subject of a fierce debate over mandatory government security standards, likes to say its members voluntarily have spent $3.5 billion on security improvements since 2001. But if you break down that number over six years and 2,000 facilities, you are left with $291,000 annually per plant. Flynn says based on the cost of a 24-hour security shift-including benefits-that amount would fund an additional six to 10 guards per facility. That is a lot more understandable-and less impressive, Flynn says-than the $3.5 billion figure.

"When you actually roll it back and do that kind of arithmetic," he says, "you realize we're not talking huge investments here."

]]>

Playing the Piper

Zack Phillips — Sun, 01 Jul 2007 00:00:00 -0400

Businesses wouldn't bite on the last attempt to lure them into biodefense, so the Health and Human Services Department is changing its tune.

On the morning of Jan. 28, 2003, Bob Marsella received a tip about a surprise that President Bush would deliver in his State of the Union address that evening. Marsella had come to Washington with data on a drug that his company, San Diego-based Hollis-Eden Pharmaceuticals, was developing to cure the often fatal effects of severe radiation exposure. He was in the White House, showing the information to Alan Gilbert, Bush's special assistant for domestic policy. Gilbert reacted favorably and offered a little foreshadowing, Marsella recalls. "I think you'll really like the speech tonight," he said.

That night, halfway through his address, the president proposed a new $5.6 billion federal program, called Project BioShield, to develop and purchase vaccines and other medical countermeasures to biowarfare agents like anthrax, along with other potential weapons of mass destruction, such as a radiation-producing nuclear bomb.

Marsella, Hollis-Eden's senior vice president for development and marketing, was very happy indeed with what he heard. "It gave us a vehicle to know they had money and wanted to encourage companies," he says. "Now there was a real market for this, and we could go to Wall Street to develop the drug. . . . We had bankers come to us and say, 'We want to fund this. This is going to be huge.' "

But as of May, Hollis-Eden no longer is developing Neumune, its drug for radiation sickness, for the federal government or anyone else. In a sharply worded May letter to Rep. James R. Langevin, D-R.I., the company's chairman, Richard Hollis, announced that Hollis-Eden is "out of the business of BioShield." Langevin is chairman of the House Homeland Security Subcommittee on Emerging Threats, Cyber- security, and Science and Technology.

BioShield once was hailed as a revolutionary program that would use market forces to develop cutting-edge therapeutics where few existed before. But in the four and a half years since its creation, it's been a disappointment. The Health and Human Services Department, which oversees the program, has used it to buy a limited number of vaccines or other therapies, and few of them are new products. The department canceled two of the most high- profile BioShield procurements. And the large pharmaceutical companies it was intended to lure never appeared.

HHS leaders say they now have the program heading in the right direction. The Pandemic and All-Hazards Preparedness Act passed last year created a new HHS agency to shepherd manufacturers through the bumpy drug development process. That new agency and authority, along with reshuffling at HHS, have put the department in a better position to help companies develop medical countermeasures to smallpox, radiation sickness and the like, HHS officials say. "I'm not sure it's provided us all the tools yet, but it's moved us well in the right direction," says Gerry Parker, HHS deputy assistant secretary for preparedness and response.

Losing Interest

In April, Langevin's subcommittee held a hearing called "Can BioShield Effectively Procure Medical Countermeasures That Safeguard the Nation?" Marsella, Hollis and other industry officials sat in chairs on the left side of the center aisle. Representatives of HHS, the Homeland Security Department and other agencies sat on the right. BioShield was supposed to bring together those two groups, but the subcommittee's question betrays that the divide has yet to be bridged.

The idea behind BioShield was to attract pharmaceutical companies and biotechnology firms, traditionally active in more lucrative markets, to the biodefense arena. People buy drugs for cholesterol, diabetes and hair loss, which makes it worth it for drug companies to develop them. People don't usually go to the local pharmacy to buy anthrax vaccine. There's no guarantee biodefense products ever will be needed, hence little reason for companies to produce them.

What made BioShield revolutionary was the idea that government would create the market for such drugs by guaranteeing to buy a certain quantity of them-assuming they worked-to put them in the Strategic National Stockpile. Companies could then weigh the risks of trying to develop such drugs. Pharmaceutical firms don't take that peril lightly, since 67 percent to 91 percent of new compounds under investigation are rejected and the average biotechnology drug takes $1.2 billion and more than eight years to develop, according to the Center for the Study of Drug Development at Tufts University. Thus, the government would issue "advanced purchase" contracts. Firms wouldn't be paid until they delivered effective products, but assured of a market, private investors would fund their development.

The market and the new drugs haven't come to fruition, critics say, because HHS has been too conservative. The department has taken too long to say what kinds of therapies it wants-and how many and at what price. It has delayed issuing solicitations and has failed to buy large enough quantities of what it has asked for.

Understandably, the critics contend, companies and potential investors have lost interest.

"In commercial drug development, where the markets are known, the investment community is willing to continue to fund development as long as the potential market remains clear," Hollis wrote to Langevin. "There is no reason to believe that the same cannot be true for BioShield; however, that would require the program to guarantee markets, issue advanced purchase contracts and ride out the vagaries of the drug development process."

What Hollis is referring to, in part, is his own experience of trying to work with HHS on Neumune. High levels of radiation can cause, among other things, a fatal drop in infection-fighting white blood cells and in clotting cells called platelets. Neumune, the firm says, would mitigate both conditions. After waiting through multiple delays, a request for information, a draft request for proposals and a final request for proposals, the company finally reached the negotiation stage last year only to have the department announce in March that it was canceling the procurement. Neumune was not far enough along in development to merit a contract, according to HHS. Hollis-Eden had spent $85 million developing the drug under the belief that the department would buy it, the company chairman says.

The procurement of a next-generation anthrax vaccine sputtered, too. In November 2004, HHS awarded a contract worth nearly $900 million to VaxGen Inc. of Brisbane, Calif., for 75 million doses of the vaccine it was developing. That contract made VaxGen the most high-profile HHS biodefense contractor, the "BioShield pace car," as one company spokesman put it. But last December, HHS terminated the contract for default. VaxGen, which already had pushed back its delivery date several times, was unable to convince the Food and Drug Administration to allow it to start a Phase 2 trial by the HHS-imposed deadline of Dec. 18. A month after the payment-on-delivery contract was canceled, VaxGen cut its workforce in half and Lance Gordon, the firm's president and CEO, resigned.

As FDA commissioner from November 2002 until early 2004, Mark McClellan was one of the architects of BioShield and pitched it to industry at a well-attended Biotechnology Industry Organization conference for CEOs and investors in January 2003. He says the program's problems generating private sector interest come down to the lack of a large financial carrot. The annual appropriations process makes it difficult for the government to commit to spending a large sum of money several years from now, he says. "It's the demand at the end of the line that drives everything," says McClellan, now a visiting senior fellow in health policy studies at the American Enterprise Institute-Brookings Institute Joint Center for Regulatory Studies in Washington. "Usually, it's up to the company to convince investors [to continue funding a drug's development]. That's different here because there's not that clear, secure promise of financial success at the end of the line."

Valley of Death

Gerry Parker of HHS twiddled his fingers and shook his head in disagreement during Hollis' testimony at the April BioShield hearing. He and other HHS leaders have a very different take on the project's chief problem and the solution. They believe industry has stayed away from biodefense because of constraints imposed by the original BioShield legislation. The fixed-price, payment-on-delivery contracts the law required were too risky for companies to bear, they say.

"Any companies under a BioShield contract were operating under their own risk to get the product to the point where we could get it into the Strategic National Stockpile," says Carol Linden, HHS acting director for public health emergency medical countermeasures. "Most other contracts, and especially research and development contracts, would be cost-reimbursement-type contracts where the company or entity does some work, submits an invoice, you pay the invoice, they do some work, submit another invoice, you pay the invoice."

Under fixed-price BioShield contracts- which state that the government will buy a certain number of doses at a certain price-companies had to roll all developmental work into the initial price. "And sometimes those costs are not entirely predictable," Linden says. This is where HHS thinks it has a large part of the solution. The pandemic and hazards act created the Biomedical Advanced Research and Development Authority at HHS to manage drug development. Linden is the acting chief of BARDA. It now has nearly 150 employees (including contractors), and Linden anticipates it will grow to a total staff of 300 by the end of fiscal 2008.

The 2006 law gives HHS authority to pay companies up to 5 percent of a contract's value at completion of certain milestones and up to 10 percent of the award as advance payments. HHS and congressional backers hope this will help companies bridge what industry calls the Valley of Death-the long period between early drug development and FDA approval, when many firms run out of money.

Having stopped all work on its radiation drug, Hollis-Eden now is pursuing drugs for prostate and breast cancer. Company officials believe BARDA exacerbates BioShield's problems. Focusing on issuing development grants to get companies over the valley of death spends taxpayer dollars on a risky process guaranteed to produce some failures, and takes the program further away from a market-driven approach, they say. "I want to be perfectly and absolutely clear about this: There is no valley of death in the private sector markets for known attractive commercial products and market opportunities," Hollis said at the House subcommittee hearing. "The legislation, the way it's being implemented, has created the valley of death."

McClellan, too, thinks intermediate payments are not an ideal approach, because government bureaucrats wind up having to judge whether a drug under development is on track, traditionally the province of venture capitalists and others in the private sector. Previously, government employees only had to judge the final product, and evaluate whether it was effective. "Where governments have a better role to play is setting out a big reward, not trying to critique each intermediate step," he says.

He advocates a model like the one sometimes employed in sub-Saharan Africa, where extreme poverty means there is no market for anti-malaria medication and other drugs that are desperately needed. A foundation or government puts up a large cash prize for the first company to produce an effective therapeutic. Called Advanced Market Commitment, it is actually quite similar to the original vision of BioShield.

Changing Minds

Last summer, HHS began reorganizing in anticipation of passage of the Pandemic and All-Hazards Preparedness Act. The domain of W. Craig Vanderwagen, assistant secretary for preparedness and response, has been divided into four new offices: Office of Policy and Strategic Planning, which handles long-term planning; Office of Medicine, Science and Public Health, which is the medical adviser to Vanderwagen and does international preparedness; Office of Preparedness and Emergency Operations, which coordinates HHS' emergency response; and BARDA. Parker emphasizes that the reorganization is more than just nominal; he says it has created a central, coordinating enterprise for the many agencies and departments involved in medical preparedness and response, something that did not exist before. "We've got the foundation now of being able to more effectively manage and integrate and lead an enterprise for preparedness and response," he says.

That coordinating framework, Parker adds, has brought together not only senior leaders, but also those at the staff level, to ensure that, for example, researchers are talking to people in preparedness and response. "There's a natural tension in the research and development world: We need a lot of innovation and a lot of good ideas, but we also have to channel that innovation and good ideas into something that . . . is pragmatic at the delivery level," he says. "It would do no good if we spent a lot of money developing something that had no operational utility."

Parker is hinting at the Hollis-Eden drug. Though they have been careful to say they canceled the radiation sickness procurement because no proposed therapy was far enough along to meet their requirements, HHS officials expressed doubt about the requirement that Neumune be administered four hours after exposure. "We have to take into account how fast we can get the drugs to the people who need them versus how fast they need to be treated," Linden says. "If you have a drug that says it has a positive effect, but you have to give it in a very short time period after exposure, say four hours-from an operational standpoint, we can't do that right now." Hollis-Eden officials counter that the drug could be stocked in households or cities in the event they might one day have to use it.

In June, HHS issued a new sources-sought notice for drugs to treat some of the effects of radiation sickness. Linden says some drugs used in radiation oncology could fit the bill here, even if their manufacturers never considered it. The department also has planned a series of outreach events to get the word out to the private sector about opportunities within BioShield. Notably, Linden will host a BioShield workshop at the end of July, and a BARDA industry day at the beginning of August. "We're very excited about this-to have a whole day where folks can come," Linden says. "We've set it up with half-hour presentations so they can come tell us about their technologies."

And there is some evidence that business might be coming around on BioShield. The implementation plan HHS released in April, which, among other things, spells out acquisition priorities, was greeted favorably by companies, though many say more details are needed. And on June 4, HHS took a large step forward, awarding a $500 million contract to Danish drug manufacturer Bavarian Nordic for 20 million doses of its next-generation smallpox vaccine. Although the national stockpile already contains enough smallpox vaccine for every American, it can cause harmful side effects. The Bavarian Nordic vaccine is safer, and could be given to Americans with compromised immune systems, HHS officials say.

Will HHS be able to change private sector minds about doing business on biodefense? Both the department and its critics will be scrutinizing the response to solicitations for a next-generation anthrax vaccine and radiation sickness therapy for signals of a turnaround. "This is a new kind of a problem that the government hasn't had to solve before," McClellan says of biodefense. "Every time there are new problems to solve, there is going to be an iterative process. You start with ideas that seem like the best approach and then identify ways that they might be improved."

]]>

A Shot in the Dark

Zack Phillips — Fri, 15 Jun 2007 00:00:00 -0400

Can missile defense systems keep commercial airlines safe?

A gondola will hang 700 feet in the air, suspended by cables. Government officials will shoot missiles at it. This bizarre scene will be the latest in the Homeland Security Department's efforts to develop technology that can defend commercial jets from shoulder-fired missiles. The gondola will replicate the heat signature of a commercial jet and will be outfitted with the two anti-missile systems DHS contractors have been developing. A total of nearly 40 missiles will be fired, two at a time, at the gondola to see how the countermeasures fare. This "live fire" test at the White Sands Missile Range in southern New Mexico is planned for October, DHS program director Herm Rediess says.

That program is in its final stage, and DHS recently launched two others to defend airliners from shoulder-fired missiles, although significant questions remain about all of them. Rediess and other DHS officials spoke about the programs at a May conference sponsored by the National Defense Industrial Association for the department's Science and Technology Directorate, which oversees the research.

Shoulder-fired surface-to-air missiles, also known as MANPADS (man-portable air defense systems), were developed in the late 1950s to provide ground forces protection from enemy aircraft.

Civilian jets are an easy target for MANPADS: They're relatively slow and fly predictable routes, emit large heat signatures and descend to low altitudes miles away from the airport. In November 2002, two shoulder-fired missiles narrowly missed an Arkia Israeli Airlines flight taking off from Mombasa, Kenya, an event many consider the catalyst that began efforts to defend civilian airliners from the MANPADS threat. The White House convened a task force on the issue less than a month later.

DHS began its counter-MANPADS program in the fall of 2003, hiring Northrop Grumman Corp. and BAE Systems to convert military anti-missile technology for use on commercial airliners. The two contractors have been developing parallel on-board systems that identify an incoming missile and shoot a laser to jam its seeker, sending it off target where it would time out and self- detonate or fall to the ground harmlessly. The Northrop system is a pod mounted on the plane's belly; the BAE device includes a sensor and a tracking head on the belly, but much of its technology remains inside the plane.

The department has tested the technology on real planes with simulated missile launches and has begun installing it on cargo planes to see how well it holds up under commercial schedules. Department officials say the counter-MANPADS program is on schedule and will be completed in fiscal 2009. And yet even if the technology works, the systems' future is far from certain. "There has not been a decision to deploy, but we will be ready for it," Rediess said at the conference.

There are three prominent concerns. The first is cost. The government requires a price tag of less than $1 million per unit in quantities of 1,000 units. Both Northrop Grumman and BAE say they can easily meet that, likely even when sold in quantities of hundreds of units. But even a price below $1 million per unit adds up to a lot of money when installed on hundreds or thousands of airplanes, and neither DHS nor Congress has said who would pay for the technology, a key issue for the financially struggling airline industry. "Airlines don't really want to deploy this right now," says James Tuttle, director of the Science and Technology Directorate's explosives division. "They've got their own problems."

The second issue is maintenance. Commercial airlines fly under extremely tight schedules and are accustomed to servicing planes much less frequently than in the military, where the anti-missile technology originated. DHS requirements dictate that the technology go at least 3,000 hours between repairs. So far, the systems have not reached that level of reliability, but both companies say they are confident they will by fiscal 2009. Evaluating and improving reliability is what the current phase of the project is for, says David Denton, the program director for Northrop Grumman. "We're on our way. The only way you know is to get the system into the operational environment. You don't do it in a laboratory."

A third potential sticking point is that counter- MANPAD devices contain sensitive military technology, so international planes using the anti-missile system would need an export license. Homeland Security officials are working with the State Department, but admit it is a thorny issue. "If Congress wants to put these on airplanes, it will be done," Tuttle says. "It's up to Congress to change the laws. And they know what the issues are."

For its part, Congress has asked DHS to evaluate other possibilities to defend civilian airliners. Under one such program, DHS has conducted a suitability study on several defense systems that would not be mounted on planes. Raytheon Co.'s Vigilant Eagle, for example, uses towers around the airport to fire high-power microwave beams at a missile, diverting it from the airplane; Northrop Grumman offers a ground-based system that would fire a laser to divert missiles. DHS officials say both systems need to be tested for their effects on the surrounding area, especially in the event of a false alarm or missed shot.

The department also has begun another program meant to find a lower-cost solution to the missile problem. Named Project Chloe, after DHS Secretary Michael Chertoff's favorite character on the television show 24, the program would put some or all anti-missile devices on a small fleet of unmanned aerial vehicles that would hover around the airport and protect planes from potential missiles during takeoff and landing.

"What we envision is an unmanned vehicle flying 65,000 feet above the airport," said Chloe program manager Kerry Wilson. That height is out of commercial air space.

DHS will begin flight testing a system developed by the Defense Department later this year and is in the process of awarding contracts in connection with a March solicitation. The Predator B or Global Hawk drones would work autonomously and, DHS officials said, ideally they would fly for weeks or months without having to land.

Others, like Ron Barrett-Gonzalez, associate professor of aerospace engineering at the University of Kansas, are less sanguine. Barrett-Gonzalez said Defense Department efforts to counter missiles with high-flying UAVs have failed because clouds-and the water particles inside them-hinder the system's ability to track and shoot at a missile thousands of feet below. He called Chloe "fatally flawed at the outset."

"They'll test it in blue-sky conditions and it will hit its target and everyone will clap, but no end user is going to buy it because they're well aware of the problems," he said at the conference. "Of course, no one wants to hear that at one of these things."

Homeland Security officials note that Project Chloe is classified as a high-risk, high-reward project, meaning that they don't really expect it to work. "There are many challenges; that's why it's [an innovation prototype]," Tuttle said in response to Barrett-Gonzalez's comments. "We know it's high risk. But we want to come up with another solution than putting it on the plane."

]]>

Snapping Back

Zack Phillips — Fri, 15 Jun 2007 00:00:00 -0400

Since we can't prevent every disaster or attack, why not shift focus toward surviving them?

Gregg Ward was sitting in his office at the Detroit-Windsor Truck Ferry, the business he and his father started 11 years earlier to haul tractor- trailers over the Detroit River between the Motor City and Ontario, Canada. One of his eight employees came off a flat-deck barge carrying a television from the vessel galley and talking about a news report: Two hijacked planes had hit the World Trade Center in New York.

He entered Ward's office and plugged in the TV.

Within the hour came the first of many phone calls. Intense security inspections had created a 14-mile backup on the nearby Ambassador Bridge and the next closest bridge to and from Canada was 165 miles away. Automotive companies called frantically to find out whether Ward had room for them on his eight-truck barge.

Working 16 hours a day for the next four days, Ward and his staff made room, moving about 250 vehicles a day. It's hard to overstate the importance of this alternate border crossing to the time-sensitive automotive industry. General Motors later said Ward's ferry was the only thing that allowed the company to continue operating the 3,400-employee Detroit Hamtramck Assembly Plant.

Think about that for a second. In the immediate aftermath of the terrorist attacks, the federal government closed airports, stepped up physical inspections and began purchasing new detection equipment. And yet the only thing protecting the fragile auto industry from huge economic consequences was a single barge, created as an environmentally friendly alternative to a nearby bridge.

"That's a sad statement," Ward says. "You wouldn't build a plant at the end of a roadway with no other way to get there but going over one rickety bridge. That's kind of how we built the economy. We've got a bridge built in 1929, which is the economic engine that facilitates the movement of commerce between our two countries. To have no contingency is unusual. I don't think it would happen in any other country."

A growing chorus of voices agrees with that sentiment. Current and former government officials, private sector representatives and other experts are calling for a dramatic change in focus for government's homeland security efforts. Weak links such as the Detroit-Windsor border crossing must be confronted more directly, they say. Instead of focusing only on preventing terrorist attacks, the government should turn its attention to building systems that can successfully withstand enemy strikes and other disasters without the cascading economic and social consequences that followed Hurricane Katrina and Sept. 11. What's needed, they say, is resilience.

Enhancing America's ability to snap back from crises could take many forms: decentralizing the power grid so it can endure a local outage without widespread disruption, as occurred in New York in August 2003; altering processes at chemical plants near cities to use new substances that are less volatile and less toxic; investing in satellite phones so first responders can communicate even if catastrophic flooding wipes out all land-based phone systems.

Focusing primarily on physical protection, from radiation detectors to Border Patrol agents, gives the appearance of security but actually leaves the country quite brittle, resiliency advocates say. To paraphrase martial arts actor and philosopher Bruce Lee, an oak tree may seem strong and imposing, but a large enough storm will snap it in half, while the willow survives because it bends with the wind. Resiliency experts see our increasingly interdependent system of critical infrastructure as the metaphorical oak tree, vulnerable to snapping in a crisis if it's not made more flexible. For example, hospitals need water, shipping water requires gasoline and gas-pumping oil refineries need electricity. Shutting down Interstate 95 to stop the spread of a contagious disease, as occurred in the national preparedness exercise TOPOFF 3, would lead to shortages of fuel, food and milk in New York City and the Northeast within days.

The idea of resiliency is gaining momentum, but advocates say the Homeland Sec-urity Department and federal government are moving far too slowly, paying rhetorical respect to resiliency in speeches but still mired in an outdated way of thinking. "If critical infrastructure protection was 'Homeland Security 101,' resiliency is 'Homeland Security 301,' " says Randy Beardsworth, DHS' assistant secretary for strategic plans until last September. "It's a little more mature way of looking at things."

Beyond Protection

Hundreds of people gathered at the Mandarin Oriental Hotel in downtown Washington on Jan. 10, 2006, to hear what the Homeland Security Advisory Council's Critical Infrastructure Task Force had come up with after more than a year of work. The answer was resiliency. The task force said DHS Secretary Michael Chertoff should adopt it as a top-level strategic objective. Council Chairwoman Ruth David, president of Washington research institute Analytic Services Inc., emphasized that this change would not be a matter of semantics. The task force believed infrastructure resiliency should replace protection as the goal of all government efforts, she said.

It's an idea that seems at once revolutionary and wholly obvious, and the implications are huge. With the exception of one area-biodefense, where the Health and Human Services Department has been trying to stockpile vaccines to treat people in the aftermath of a bioterrorism attack-the majority of homeland security work since 2001 has been focused on protection, that is, pre-attack defense. DHS and other governmental agencies have spent billions of dollars on airport and cargo screening, sensors and cameras at the border, tamperproof credentials, integrated criminal and terrorist databases for law enforcement authorities, and so on. But what happens after an attack or a natural disaster has received short shrift, resiliency advocates say.

The aftermath is where most of the damage of a terrorist attack-such as the estimated $20 billion cost of recovering from Sept. 11-occurs, says Stephen E. Flynn, a Council on Foreign Relations fellow and former Coast Guard commander, who specializes in port security. "Resiliency for me is fundamentally about prevention, in that the biggest risk associated with a terrorist attack is not the attack but the consequences that flow from it," he says. "In terms of destroying the United States by putting a bomb in a box, it's not going to happen. This isn't thermonuclear war. The real risk is how we react to that act of terror on our soil. That's where we get things that lead to a profound disruption."

Flynn is one of Washington's most frequently cited homeland security experts. In February, Random House released his new book, Edge of Disaster. It advances the notion that resiliency should become a national motto and the organizing principle for governmental action.

Flynn's bomb in a box scenario-let's say reasonable intelligence suggests a dirty bomb sits amid cargo at the Port of Los Angeles-neatly demonstrates the need for resiliency planning: Federal, state or local authorities surely would close the port, but then what? The international shipping industry runs on extremely tight schedules. Where would ships already on their way to Los Angeles go? Where would the trucks and rail cars waiting for cargo from the ships go? What would the thousands of companies with supply chains tied to the port do without their shipments? How long can the system survive a shutdown?

"These are things that need to be thought through. None of that has happened," Flynn says. "Most of the Navy and a good chunk of the Coast Guard and even bits of Customs have looked at the maritime domain as [if] their job is to police it. . . . My main focus has been on it as a critical infrastructure. . . . I'm worried about that system being targeted with the ambition of getting us to turn it off with real consequences."

The private sector is well aware of continuity of operations planning, and continuity of government programs are not new either. But as the Cold War ended and associated national threats seemed to wane, such programs were scaled back in the early 1990s. The Year 2000 software scare brought back concern about systemwide continuity and resilience, but when the millennium passed without incident, much of the work in this area stopped. Sept. 11 swung the pendulum dramatically back toward physical protection.

Resiliency advocates are quick to clarify that they are not arguing for an end to protection-focused efforts; rather, they say, protection alone is not enough. "We're asking the wrong question," says Jeffrey Gaynor, formerly the Homeland Security Advisory Committee's director for emergency response. "It's not 'How many detector technologies [are enough]?' and not 'How many buffer zones?' but 'How long can [we] do without something?' And you can measure that. And you can also measure the consequences of its loss."

Gaynor is now chief operating officer with Entegriti, a Herndon, Va., consulting firm that focuses on resiliency. The former Army colonel is bald with a salt-and-pepper beard, and his heavily rhetorical speaking style takes on a sarcastic edge when discussing the status quo. Gaynor sees protection-"gates, guns, guards, gadgets and gizmos"-as a collection of static, single-point defenses inadequate to dealing with an ever-changing adversary and prone, inevitably, to failure. "Every [preparedness] exercise that we run in this country begins with a failure of protection," he says, unable to hide his exasperation. "Every one. So why is protection what we're trying to do? Why is that the objective?"

Gaynor, Flynn and others also contend that resilience has deterrence value against terrorists looking to maximize the effect of their limited resources. If attacking an electrical transformer or another piece of infrastructure is unlikely to have large repercussions, it becomes a less attractive target. "What you want to do is to make the effect of what they're doing negligible," says Gaynor. "In other words, instead of making everything critical, which is what we're doing-and when everything is critical, nothing is-what we ought to be doing is building a country where nothing other than its people are critical."

The critical infrastructure task force worked for a year with private and public sector experts before settling on resiliency as the center of its recommendations to DHS. When Ruth David finished the presentation at the meeting in January 2006, Deputy Secretary Michael Jackson nodded in approval. "I'm very much intrigued by and supportive of the idea of resiliency," he said. But a year and a half later, Gaynor and others feel that Homeland Security either ignored the task force's recommendations or has not pursued them nearly aggressively enough.

Degrading Gracefully

Resiliency is gaining momentum and beginning to enter the popular lexicon. A June 25 summit convened by the Washington-based Council on Competitiveness will be the latest conference to focus on resiliency in government and private sector security. The financial and information technology sectors long have used this kind of approach to security. Homeland Security Presidential Directive 20, released in May, focuses on continuity of government and directs the DHS secretary to award grants to local governments and private sector infrastructure owners for continuity planning and exercises. And a bill in the Senate would provide $100 million in satellite communication infrastructure for first responders. The technology of Iridium Satellite LLC, located outside Washington, now is being used by Border Patrol agents, hospitals and private companies for communicating and tracking assets. The company sent 10,000 of its satellite telephones to the Gulf Coast after Hurricane Katrina wiped out all land-based communication networks-including cellular phones-in wide areas.

And although many fault DHS for not doing enough to push resiliency, even critics say they think Chertoff and Jackson believe in it, but face a difficult political environment in which to push a long-term and somewhat revolutionary idea. After all, the nation looks to the department for protection. "DHS makes the argument that communities want those guns, guards and gates because that's how you protect people," says Eileen Larence, director of homeland security and justice issues for the Government Accountability Office. " 'It's OK for businesses to look at standing back up, but people want to be protected.' "

Within DHS, some work on resiliency solutions is proceeding. The Science and Technology Directorate, the department's research and development wing, is investigating the feasibility of building airplane cargo and passenger compartments that can withstand a certain level of explosion. While detection technology scans for a finite list of substances, improvised explosives, by definition, evolve to use new components. Hardening planes would help combat this problem while making screeners' jobs easier by allowing them to focus on searching for larger amounts of explosives. "You're never going to get rid of screening," says James Tuttle, head of the directorate's explosive countermeasures division. "If you're looking for larger amounts, you'll get less false alarms and that means less people are needed to man the checkpoints."

The plane-hardening programs face significant hurdles: The new cargo compartments are 10 times more expensive than existing ones, and even using the lightest ones would add up to 1,000 pounds per plane. Nonetheless, DHS officials say the passenger cabin program will start live testing later this year. The Transportation Security Administration already is testing 25 hardened cargo containers aboard Continental Airlines and United Airlines flights.

This kind of resiliency isn't about systematic redundancy; it's about making the targets less brittle. The goal is building infrastructure that degrades "gracefully" if attacked or damaged, in the words of the critical infrastructure task force. Thus, an explosion in a plane would not blow it apart. A breached levee would be plugged with patches to slow the water flow and give city residents time to evacuate. A bomb blast aboard a train in an underground tunnel would not flood the entire train or subway system. The Science and Technology Directorate calls that idea "Resilient Tunnel." The program has $1 million this fiscal year to test inflatable, flame-resistant barriers-already deployed in Europe-that would be positioned throughout a tunnel and inflate to contain a fire. Research in future years could include new materials and erosion-control technology used in tunnel lining.

Not Alarmist

Government agencies could do more, resiliency advocates say.

Researchers at George Mason University's Infrastructure Mapping Project urge detailed resiliency assessments, measuring the capacity of each piece of infrastructure, calculating how dense different geographic locations are with such infrastructure-a particular site might have 15 fiber optic cables, three gas pipelines and two electric transmission lines, for example-and identifying bottlenecks where traffic is high but few alternative routes exist. The consequences of disruptions can be measured in terms of the number of businesses, the proportion of other infrastructure, the amount of traffic or portion of the population affected. Resiliency assessments enable government to quantify the cost effectiveness of alternative routes and other adaptive efforts.

And critics finger DHS in particular as falling short in exploring resilience. While Chertoff mentions it in speeches, and the National Infrastructure Protection Plan now includes dozens of references to it after a draft version elicited complaints that it was too protection-focused, resiliency advocates say the department still is overly focused on protection. One oft-cited example is grant programs such as the Buffer Zone Protection Program and the Chemical Sector Buffer Zone Protection Program, which give millions to state and local governments to develop measures to protect critical infrastructure. "If you dangle money over people's noses and say, 'If you tell me you're doing protection, I'll give you money,' what are people going to do?" Gaynor asks rhetorically.

DHS also should be doing more to educate the public, advocates say. "If [Bush or Chertoff] were to use that terminology in speeches, that becomes policy and people start driving toward that," Beardsworth says. "So it takes time for the ideas to flow down. And it works much easier when it's coming from the top in an aggressive, assertive way, rather than from the middle or from the outside, with folks like Steve Flynn."

Flynn, for his part, returns frequently to the topic of government-mandated security standards and excoriates the Bush administration for its reluctance to impose them. Not only should Homeland Security force standards on ports and chemical plants, he says, but the department should enforce them rigorously. If standards aren't en-forced strictly, then an incident, which Flynn and others say is inevitable, calls into question the entire security regime, instead of a single problematic port or plant. "You're left with 'Open every damn box and check it,' " he says. "Resiliency here would require a means to audit [implementation of security standards], so when you have an incident you can diagnose it quickly, and you can respond quickly by isolating that breach."

For chemical plants in particular, Flynn thinks physical security is not enough and that the government should mandate that facilities near population centers replace hydrofluoric acid, which is highly toxic and forms a cloud after being exploded, with sulfuric acid or another less lethal alternative. "It's not like [truck bombers] are going to stop to give you their ID," he says. "If that's the scenario, you have to say, 'What can I do to reduce the consequences for the surrounding population?' "

Barnstorming the country on his book promotion tour, Flynn says he has been struck by how well the idea of resiliency resonates with people of all political stripes. He frames it as a pragmatic, nonpartisan approach just waiting for a presidential candidate to adopt it. And despite his vociferous criticism of the status quo as inadequate, Flynn is far from an alarmist. His book strikes a fairly optimistic tone. Protection focuses on an amorphous enemy, which can make people feel kind of helpless. Focusing on building more resilient infrastructure gives them a sense of control.

"Every American generation has had to confront serious dangers, and they have always passed the test," Flynn writes. "While we must be prepared to acknowledge that there are dark clouds on the horizon, it is vital that we not lose sight of our most important and endearing national trait: our sense of optimism about the future and our conviction that we can change it for the better."

]]>

Picture This

Zack Phillips — Tue, 15 May 2007 00:00:00 -0400

Rising accuracy rate makes face recognition technology a viable security tool.

Eighty percent is a decent success rate in most cases. But for a security system meant to deny entry to terrorists and other criminals, while letting others pass through quickly, it's not good enough.

When the National Institute of Standards and Technology conducted a test of face recognition products in 2002, it reported a 20 percent error rate-the number of innocent people falsely identified as security risks-for the three technologies evaluated. That was a marked improvement over the 54 percent error rate in a 1997 government test and a nearly 80 percent error rate in 1993.

"One out of five people having a mistake-that is a carnival trick, not a security solution," says Jeremy Grant, a senior vice president and identity solutions analyst at Stanford Washington Research Group in Washington.

This spotty history does much to explain the excitement over the 2006 face recognition product test, the results of which NIST released in late March. The error rate for some systems is now down to 1 percent. Grant and others say the orders-of-magnitude improvement marks the arrival of face recognition technology as a legitimate security tool for federal agencies and private entities.

In a test involving still images, Google subsidiary Neven Vision of Santa Monica, Calif., was the most accurate system, registering a 1 percent false rejection rate. When NIST used 3-D images, the face recognition technology from Viisage, a subsidiary of L-1 Identity Solutions Inc. of Stamford, Conn., won with false rejection rates ranging from 0.5 percent to 3.1 percent.

What really drives home the viability of these tools, according to the NIST test, is that automated face recognition technologies are capable of equaling or surpassing the performance of an average person perusing mug shots. Undergraduate students at The University of Texas at Dallas were shown 80 pairs of photographs for two seconds at a time and asked whether the two faces were the same person. They also had to rate their confidence in their answers. Six out of seven automated systems outperformed the students.

Improvements in face recognition technology are due to several factors. Advances in algorithms played a large part, increasing the technology's performance by a factor of four to six, according to NIST. But the dramatic upswing, the study noted, also was a result of higher resolution images and more consistent lighting. So as cameras improve, face recognition technology gets better too.

While the 2006 test showed a marked improvement in the technologies' ability to match faces across changes in lighting-systems made by Neven Vision, Viisage, the Samsung Advanced Institute of Technology and the German firm Cognitec Systems all fared better than the top-rated products in a January 2005 test-the accuracy of face recognition systems drops dramatically as the illumination for the photographs becomes less standard, the NIST report said.

Grant says this means that face recognition is still a stretch for access control systems that use cameras to scan crowds and attempt to match faces against photographs in terrorist and criminal databases. Settings where photographs are taken with a standard illumination and background-driver's licenses, passports and other credentials-are a better fit.

NIST also studied iris scanners and found that the most accurate one, a combination of technology from French company Sagem Morpho and L-1 subsidiary Iridian Technologies, performed impressively, with an error rate of about 1 percent. But in the first head-to-head evaluation of multiple biometrics, NIST found that iris- and face-based recognition systems had "comparable accuracy." Grant says this is a blow to manufacturers of iris scanners that have touted their products as more accurate than face recognition.

Ultimately, Grant says, federal agencies, law enforcement authorities and others could opt to use systems with multiple biometric components. Checking fingerprints against an FBI database while also comparing mug shots against another database increases certainty about identity and decreases the chances of misidentifying a criminal as harmless.

]]>

Fish Story

Zack Phillips — Tue, 01 May 2007 00:00:00 -0400

Companies expected to land big deals when Homeland Security was created four years ago. Things haven't panned out as they anticipated.

When Congress passed the Aviation and Transportation Security Act on Nov. 19, 2001, it created more than a new bureaucracy to oversee transportation security. It also spawned enormous anticipation among government contractors. The law required airports to be equipped to screen all checked luggage for explosives by Dec. 31, 2002. No exceptions. Many in the private sector looked at this requirement, and the enormous purchasing power of the soon-to-be-created Homeland Security Department, and saw boundless procurement opportunities ahead.

The checked-luggage deadline resulted in the purchase of more than 7,000 explosives detectors under a contract between the newly established Transportation Security Administration and Boeing Co., a contract originally estimated to cost between $508 million and $1.3 billion. When DHS finally was created in 2003 to address what seemed like countless nationwide security vulnerabilities, contractors saw more lucrative opportunities as the agency's first annual budget topped $41 billion the following year.

But for many, those early expectations of contracting largesse proved elusive. They are based on the misguided or exaggerated predictions that often accompany what appears to be the birth of a new industry and the creation of scores of companies and lobbying shops to serve it.

"The pool of folks chasing homeland security work was far greater than [opportunities that] existed," says John Clerici, a partner in the government contracts practice of Washington law firm McKenna, Long and Aldridge.

A little more than five years later, Clerici and others see a different contracting landscape than the one many first imagined. For security firms, lobbyists, market analysts and others, five trends are emerging in this still nascent industry.

Size Matters

The first myth that can be dispelled is the notion that the terrorist attacks of Sept. 11, 2001, and the subsequent creation of DHS gave birth to a wholly new industry. In fact, many see the homeland security sector as simply an extension of the defense industry. Indeed, the largest beneficiaries of Homeland Security funding undoubtedly are the same behemoth companies that dominated the federal marketplace before 2001.

In fiscal 2006, DHS' top four contractors were the goliath firms called in for Gulf Coast recovery after the devastating 2005 hurricane season: Bechtel National Inc., CH2M Hill Constructors Inc., Fluor Enterprises Inc. and Shaw Environmental Inc., with more than $3.2 billion in federal contracts combined. Not far behind were IBM, Unisys Corp. and Integrated Coast Guard Systems, a Lockheed Martin-Northrop Grumman partnership.

But even before hurricanes Katrina and Rita ravaged the Gulf Coast states, the largest beneficiaries of DHS' procurement dollars were big-name contractors. In fiscal 2004, the top three contractors were Integrated Coast Guard Systems, Unisys and Boeing Service Co., which won a combined $1.2 billion in contracts from the department.

"Those opportunities for the larger contractors who received a fairly significant increase in business definitely exceeded their expectations," Clerici says. "A lot of the stuff that needed to be done to increase . . . the response levels because of the incidents in 2001 was consistent with goods and services already available."

The opportunities for smaller firms have been fewer. DHS has a relatively high percentage of small business contracts: Of all the dollars it spent on prime contracts in fiscal 2006, 31 percent went to small businesses, slightly exceeding the department's goal. And that figure was even higher before the Gulf Coast recovery (38 percent went to small businesses in fiscal 2004, for example). But for small firms to win a piece of the most lucrative procurements, partnering has emerged as a crucial strategy, analysts say. In an arena inundated with new technologies and ideas, few small technology firms offer a product or service so unique that it immediately separates them from their competitors.

And five and a half years after Sept. 11, the demand on homeland security agencies is not for technology alone, but rather for solutions-to communication problems, detection deficiencies, and other vulnerabilities and shortcomings. According to a November report on the industry by Washington consulting firm Civitas Group LLC, that means the ideal technology could lose out if others are more widely compatible or are already integrated into a functioning system.

"Partnering in this market is particularly critical, especially for smaller companies," the report notes. "Obtaining market share can depend upon agreements with complementary services [or] products."

Bubble Technology Industries is a good example. The Canadian firm has a 50-person staff with expertise in radiation detection technology. It partnered with the much larger Raytheon Integrated Defense Systems, and the team last year won one of the advanced spectroscopic portals procurements-a contract potentially worth hundreds of millions of dollars to develop and deploy next-generation radiological and nuclear detectors for sea and truck cargo.

"The way to market has been to partner with the bigger companies and make sure your technology is the primary technology used, while the larger companies bring the project management and integration skills needed to tie the whole thing together," says Jeremy Grant, a senior vice president and emerging technologies analyst at Stanford Washington Research Group.

Integration Is Key

DHS' Transportation Security Administration oversees 429 airports. The Customs and Border Protection directorate manages 317 ports of entry, and oversees more than 6,000 miles of land borders and 95,000 miles of shoreline. An initial list made last year to inventory the nation's critical infrastructure contained more than 77,000 assets. Clearly, interconnecting separate pieces of the security puzzle is a huge part of the picture.

"Part of the problem is you generally can't just be buying sensors," says Penrose "Parney" Albright, managing director at Civitas and former assistant secretary of Homeland Security for science and technology. "A lot of the companies that have [science and technology] expertise to develop this technology are not systems integrators."

Systems integrators are companies such as Accenture Ltd., Boeing, Lockheed Martin, Northrop Grumman and Unisys-firms that, in the case of integration contracts, often don't actually build anything but collect and organize credentialing stations, sensors and other devices into a functioning system. These integrators increasingly are looking to homeland security as the defense market tightens, Albright says. And DHS more often is looking to them.

TSA awarded Unisys a $1 billion contract to build a telecommunications infrastructure connecting the 65,000 employees at the agency's command center, its 21 field offices and the nation's 429 airports. Accenture headed a team that won a DHS contract potentially worth as much as $10 billion to construct US VISIT, a system to track the arrival and departure of foreign nationals in and from the United States, confirm their identities and check for immigration violations. In 2004, the department awarded a contract with an estimated value of $224 million to McLean, Va.,-based BearingPoint Inc. to construct a financial management system for the department's 22 component agencies. DHS tapped Boeing last fall to lead a team that organizes and coordinates sensors, cameras, radios and other equipment to improve security along the country's land borders-a potentially multibillion-dollar enterprise. And Lockheed Martin and Northrop Grumman combined to form the team that the Coast Guard hired to manage and build its $24 billion fleet modernization program.

Most of these programs have fallen behind schedule and gone over budget, inviting harsh criticisms of DHS. In the case of the Coast Guard's troubled Deepwater program, these problems even led the agency to announce in April that it would take over the integration functions from the Lockheed-Northrop partnership. But with the department's latest effort, Boeing's SBInet, Homeland Security leaders say they have learned from past failures and created the management safeguards and personnel necessary to effectively run the program with Boeing as lead integrator. This and the likely demand for compatibility between programs-border and maritime security systems that share data, for example-bode well for large systems integrators, the Civitas Group report says.

Contractors Assume Risk

The integration projects demonstrate another emerging truth about the homeland security industry: The agency is shifting more risk to the private sector.

With SBInet and other performance-based procurements before it, DHS asked industry to tell the department "how to do [its] business," as Deputy Secretary Michael Jackson famously said at an SBInet Industry Day in 2006. The contractor, in other words, essentially creates the business model. But, as the Civitas Group report notes, the government favors models in which the private sector makes upfront investments and assumes the initial risk. In these models, the firms make most of the money down the line, if the system is a success.

Boeing could be paid as much as $2 billion for SBInet-DHS' inspector general said that figure could be as high as $30 billion-but was guaranteed only $2 million initially. BearingPoint's eMerge2 contract to create a new financial management framework for DHS was valued at as much as $229 million, but the firm received only about $23 million before the department scrapped the project because of various problems.

"More and more risk is being shifted to the private sector," says Alan Chvotkin, senior vice president of the Professional Services Council in Arlington, Va. "It's a good marketplace, still fairly open and robust, but it's unquestionable that some of the risk issues are shifting back toward industry. And that's having people scratch their heads."

Project BioShield, the Health and Human Services Department program to develop and procure countermeasures to biological weapons, has operated this way more or less from its inception. Despite the inherently unpredictable nature of drug development, BioShield contractors making vaccines and other therapies get the bulk of their money at the end, when they deliver an effective product. The results can be ugly if problems arise. VaxGen Inc. of Brisbane, Calif., seemed to score big in November 2004 when it won an $877 million contract to supply 75 million doses of a next-generation anthrax vaccine, its primary product. But last December, HHS canceled the contract after the company missed a deadline for starting a clinical trial. Less than a month later, Lance Gordon, VaxGen's president and CEO, resigned and corporate officers cut the workforce by half.

The Market Is Here to Stay

The point of BioShield when it was launched in 2004 was straightforward; by laying out what kinds of products it intended to buy, HHS would create a market for those products. Investors would then fund the development efforts of drug manufacturers, knowing that the return of a large federal procurement awaited if the firm was successful.

Industry and congressional critics say BioShield has been a disappointment, however, because HHS has been too slow to conduct threat assessments, release contract solicitations and process procurements. The result, they say, is that many of the large pharmaceutical firms the government had hoped to lure into the biodefense arena have become discouraged and opted for more lucrative markets elsewhere.

But outside of BioShield, most observers say the homeland security market has solidified as DHS has matured and major firms have made investments in the arena. "We continue to believe in the long-term potential of this market," the Civitas Group report says. It projects steady growth in the years ahead.

For one thing, much currently deployed technology falls short of addressing completely the vulnerabilities that Homeland Security agencies and first responders face. As long as the terrorist threat remains in the public consciousness, as seems likely, opportunities will exist for the manufacturers of next-generation equipment.

"You're never going to be completely happy with your bio detection or nuclear detection capacity," Civitas Group's Albright says. "You're always going to want to be doing a little bit better."

And though the mandates originating in the immediate aftermath of 2001 have mostly been contracted for, there remain other, unfulfilled procurements where the department continues to clarify its priorities and needs.

In January, DHS began the Secure Freight Initiative to test radiological and nuclear detection portals at six foreign ports that process cargo bound for the United States. In March, the department published draft requirements for the state-issued identification cards envisioned in the REAL ID Act; after May 2008, all driver's licenses and other credentials issued by states must meet the final DHS requirements. And an emergency supplemental spending bill now being negotiated in Congress could give states the right to impose security requirements on chemical plants that are stricter than those coming from DHS, a change that would create a sizable business opportunity.

"Even if there isn't substantial regulation, just a more serious focus on [chemical plant security], that will in itself push [facilities] to start doing more, and that will increase the market," says Doron Pely, vice president of the Washington-based Homeland Security Research Corp. The firm's most recent report projects the homeland security market will grow by 50 percent over the next five years.

Critics on Capitol Hill and elsewhere note how long it has taken Homeland Security to initiate these requirements and programs. But observers say industry has mostly adjusted-or resigned itself-to the frustrating pace of the department.

"Without naming names, I've heard large defense contractors say, 'We're done with Homeland Security,' and they're still in it," Clerici says. "I don't see how [with] an agency that has a budget of [more than] $30 billion, any responsible contractor can say they're going to ignore it."

Stanford Washington's Grant says savvy investors take into consideration the low likelihood of the department meeting aggressive program deadlines.

"Yes, DHS continues to be a difficult place to do business . . . but a lot of the investment community is building all those risk factors into their equation," he says. "You've got to be very patient to do business in this environment. People have stopped complaining about it; they've kind of accepted it."

R&D Shapes New Business

The other sign of an enduring homeland security market, the Civitas Group report notes, is the department's prodigious research and development funding.

Operating mostly under DHS' Science and Technology directorate, the budget for such activities has grown to more than $1 billion a year. Appropriators last year trimmed the budget in response to a perceived lack of direction, but their concerns appear mostly mollified by promises from new Undersecretary Jay M. Cohen.

And now, four years after the department was created, the products of initial research finally are arriving in the marketplace. While much of the technology first deployed after the 2001 terrorist attacks was retrofitted from other uses, the next round will be specifically tailored to meet post-Sept. 11 requirements, as the Civitas Group report puts it.

The department this year will begin procuring advanced spectroscopic portal systems-next-generation radiological and nuclear detectors that screen cargo, including tractor trailers, more effectively and with fewer false alarms than existing machines, which sometimes register the radiation given off by bananas and cat litter as a threat. The $1 billion-plus contract would help DHS screen maritime cargo for radiological and nuclear materials by the end of this year, and all cargo by the end of 2008, according to the agency's 2008 budget request.

And DHS soon will deploy the third generation of BioWatch, a surveillance program that aims to detect airborne pathogens within 36 hours of release. Now, technicians must visit the existing monitors daily to retrieve filters for analysis at a laboratory. The new monitors, Albright says, do the analysis internally, meaning that several dozen can be deployed in a city to provide more extensive coverage with less effort.

Other biological and chemical sensors are being tested against real agents in laboratories and could be tested in the field later this year, Albright says. "You're starting to see a new generation of technology come out that really does meet the requirements," he says. "So you're going to see a lot of things migrating out of [research and development] into procurement and integration contracts, which is where you make money."

]]>