PRICE TAG New federal security rules could cost ports $5.4 billion over 10 years. (Photo courtesy of the Port of Seattle)

Construction firms hoping for a quick bonanza of homeland security work have found a disappointingly spotty market. They’ve seen pockets of new business from agencies such as the Dept. of Defense, but also hit bureaucratic blind alleys where contract dollars are hard to find.

"The money’s not been flowing nearly as fast as everyone thought in the beginning," says Jeffrey Peacock, director of corporate security for CH2M Hill Cos. Adds Charles Neubauer, Parsons Corp. homeland security coordinator: "The market really didn’t shape up for what we might call homeland security in the areas where I think we all expected it to shape up."

Congress gave the new Dept. of Homeland Security $29.4 billion in its first appropriations bill, enacted Oct. 1. That total is up 2% from what its component agencies got in 2003 and includes hundreds of millions of dollars in potential design and construction.

For design firm HDR, "Basically our experience with DHS is good news and bad news," says Larry Bory, vice president for federal government relations. Where the firm had existing contracts, such as within DHS’s Border Protection, Immigration and Customs Enforcement units, "We kept getting work. We kept getting new contracts." Elsewhere, "It’s been difficult to get to certain people," he adds. "Generally most money has been going to consultants other than architects and engineers."

There is design work out there. CH2M Hill has contracts from DOD and the State Dept. and water and transportation agencies. Parsons is working on new Air Force entry gates and systems. DOD is "investing a fair amount in strengthening their posture," Neubauer says. "That business is moving."

Peacock says that "the trick is...identifying the legislative driver first, then where the money is going and then try to find out if there’s an actual project that’s been funded."

One potential "driver" is the 2002 Maritime Transportation Security Act. It mandated rules, published Oct. 22, requiring security plans from 361 ports by Dec. 31. Implementing the plans will cost $5.4 billion over 10 years, the Coast Guard estimates, including $1.1 billion in the initial year.

Since 9/11, port security aid has totaled about $500 million, including $150 million in the DHS 2004 appropriations bill. But with the new Coast Guard rules in place, the American Association of Port Authorities is seeking $400 million more for port security in 2005.

Some in Congress are trying to find a steadier funding stream for port security than appropriations. For example, Rep. Doug Ose (R-Calif.) has introduced a bill to steer part of the $15.6 billion in marine transport customs duties to port security.

Airports also look promising. The Transportation Security Agency has $250 million in 2004 to reconfigure airports for machines to scan baggage for explosives. That brings total federal aid for that work to $1.5 billion since 9/11. But airport groups estimate up to $3.5 billion more is needed to complete that job.

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