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Border and maritime security drives Raytheon growth PDF Print E-mail
by Philip Finnegan   
Wednesday, 30 November 2005

Raytheon Co., based in Waltham, Mass., sees strong growth in its border security business, driven not just by US-VISIT (United States Visitor and Immigrant Status Indicator Technology), a program to develop a system that tracks foreign visitors to the United States, but also by new programs in the United Kingdom, Japan, Australia and other countries.

Raytheon's win on US-VISIT as part of the Accenture team will be key to its border security growth. US-VISIT is worth up to $10 billion. Raytheon's role is to lead the effort in biometrics, systems architecture engineering and system deployment. Raytheon already developed the Immigration and Naturalization Service's automated biometric fingerprint identification system that is used to identify illegal aliens.

Hugo Poza, Raytheon's vice president of homeland security, and Tony Difurio, Raytheon's vice president of business development of homeland security, outlined their strategy for building on their success in US-VISIT during a recent discussion with HSToday .

Overseas opportunities

The United Kingdom is in the process of putting together a £1.2 billion ($2 billion) program that goes beyond US-VISIT, but will build on its experience. A request for tender on the program is expected in the second or third quarter of the year, with an award anticipated in 2007. Raytheon will be part of a team bidding on the contract, but has not released further details.

The United Kingdom promises to be the most immediate international opportunity to apply the expertise developed in US-VISIT. Terrorist attacks on subways and buses in London in July gave new urgency to the program.

Raytheon's management sees the potential to apply its expertise to similar programs in other countries, including Japan and Australia. Both countries are in the process of defining their needs for such a visitor management program.

Raytheon is already working in eastern Europe, one of the hottest areas for border security. Through a contract financed by the Defense Threat Reduction Agency, Raytheon is assisting the Ukraine in developing border security to prevent the passage of weapons of mass destruction out of the Ukraine or into the country from neighboring states.

Raytheon is pursuing other selected border security opportunities in Romania and Bulgaria, as well as coastal surveillance in Poland. With the expansion of the European Union (EU), some projects in those countries are being funded by the EU.

Yet competition is intense. Major U.S. contractors are also pursuing international border security business, including Lockheed Martin Corp., Northrop Grumman Corp. and the Boeing Co.

Closer to home

There are also substantial opportunities closer to home for Raytheon that could build on its US-VISIT experience. The company will be pursuing business in America's Shield, the project to secure the northern and southern borders of the United States. Raytheon executives feel the need for seamless interoperability between the two systems promises to give their company an advantage in the competition.

In support of its plans to pursue America's Shield, Raytheon conducted field evaluation and testing in August, when it evaluated vibration and other sensors, radar and cameras.

Raytheon also leads a team pursuing the Integrated Wireless Network in competition with teams led by Lockheed Martin Corp., General Dynamics Corp. and Motorola. The $8 billion to $10 billion, 12-year program will allow secure communications between border agents, the Federal Bureau of Investigation and law enforcement agencies.

Port and maritime security also is a promising growth area for Raytheon, although offering slower growth than the dynamic border security area. The company has been down-selected by the New York/New Jersey Port Authority for a contract that would involve perimeter security, including some maritime situational awareness. Other ports, such as Los Angeles, are also considering moving ahead with their own systems.

So far, US ports, particularly large ones, are ahead in considering port security, but European ports also promise to increasingly focus on the need for their own systems.

Although Raytheon's growth in coming years may be driven primarily by border and maritime security, its leadership also sees more modest growth in intelligence, an area in which Raytheon is well positioned. Raytheon has programs such as Genesis, which can mine data for personal information about suspected terrorists, and Red Wolf, telecommunications surveillance equipment used not only by the United States but also the United Kingdom, Australia and Canada. Growth in intelligence related to homeland security will now come from taking the vast amount of intelligence data available, sifting through it and providing better analytical tools to make it more useful to decisionmakers.


Philip Finnegan
About the author:
HSToday business columnist, is director of corporate analysis at the Teal Group, a firm based in Fairfax, VA, that provides strategic and market analysis to major corporations. He is also a veteran journalist who reported on defense and foreign affairs.