|
On-line HDS conference update – follow the money!
By Allen
R. Gibson
Oct 2004
The Department of Homeland Security since its inception has
been very cognisant of the fact that much of today’s cutting edge technology
has been, and is being, developed in the commercial sector, often by small,
companies. In order to respond to the urgent needs of the DHS in the wake of
9-11, the agency spread its procurement wings wide, and entrepreneurs have been
rushing to fill its needs every since.
“This has led to some spectacular successes among small
companies in fields where the government mandated not only budgets but timelines
for implementation,” says Brian
Ruttenbur: Equity Research Analyst at
Morgan Keegan & Co. He notes that only 2 pieces of legislation
post-911 had both money and deadlines attached.
$12 Billion has been spent on airports, where companies
such as L3 and Envision did really well. And secondly the US Visit program has
committed $10 Billion to Accenture,
and its subcontractors, to enhance identification and security of visitors to
the US, by installing multiple-biometric, machine-readable travel document
systems at points of entry into the US.
In other areas, such as biodefense, where there exists
budget legislation but no mandated timelines, progress has been slower, much to
the frustration of some companies with good technology but no market. As the
current flap over vaccines indicates, there have been large budget announcements
for Project Bioshield, but little in
the way of significant contracts signed.
What will happen in terms of timeline mandates is going to
be greatly affected by the results of the upcoming Presidential election. The
two candidates have different priorities and approaches to the war on terror,
and to how the DHS will play its role.
That said, however, it remains clear that significant new
spending on homeland security issues will be coming in the next few years, both
from the federal and state governments, and perhaps even more so from private
enterprises, as the government moves to shift some responsibility for security
onto the private sector.
So the market for security technologies is expected to
remain strong and, depending on what form the next terrorist attack takes, to
grow in new, unpredictable ways. Jack Mallon of Mallon's Security Report
says “Everything bodes well for the security industry in the immediate
future.”
Among the many companies striving to secure America both at
home and abroad were the participants in the recent HomelandDefenseStocks.com
on-line forum. Each of these companies is focussed on a specific security need
with technologies that often have other applications as well. This is a really
useful approach, according to Paladin
Capital Group’s Dr. Alf
Andreassen., who says his security investment fund focuses on
Co.
’s with “dual-use commercial applications that can expand into the
government’s security market.”
The Current Focus
Two areas that are priorities in homeland defense budgets
are:
Border/Infrastructure Protection: includes ports,
containers, plants, and water supplies. Security can often involve locating,
identifying, and tracking perpetrators: Includes biometrics, surveillance, and
tracking of people and vehicles, as well as less-lethal weaponry.
Biological Threat detection and countermeasures.
Border /
Infrastructure.
“Rail and port/border security seems to be heating up,”
says Brian Ruttenbur. “Bills to mandate spending on these are before both
houses, with a lot of talk in the Presidential campaigns on this issue.”
Infrastructure
protection can take many forms. Companies that are involved in this sector
include Snocone Systems, Bulldog Technologies, AEGIS
Assessments, Law Enforcement Technologies,
Global Matrechs, Extreme CCTV, Roaming Messenger and Wave Dispersion
Technologies.
Aegis
Assessments has built wireless
communications products for both building security and for First Responder radio
interoperability. Their very 1st “Safety-Net Radio
Bridge,” which allows up to up to 8 different radio-frequency systems to be
integrated on-site, was purchased by DHS for testing, and has been under continuous
improvement for the past two years.
Markland
Technologies is involved in a number of key
defense technologies through its various subsidiaries, including Remote Sensors
and Border Security. The Company forecasts 100% growth this year.
Snocone
Systems has developed a software package
that turns any WAP 2.0 cellphone into a remote CCTV controller/viewer. Users can
monitor their security cameras over the phone, and even send frame-grabs via
email for instant analysis and identification!
Extreme CCTV designs
and manufactures extreme application, all environment high performance CCTV
camera systems and infrared illuminators for technical surveillance day and
night.
Bulldog Technologies
have developed the “Boss” series of wireless security systems for use in
the global freight industry. Units attached to the locking mechanisms on
containers or trucks transmit continuous updates as to their status, and have
successfully prevented thefts at container ports in South America.
Navicom Wireless.
Offers wireless asset tracking with a vehicle “Black Box” – a compact GPS
locator Integrated with cellular technology and the vehicles electrical system.
Low cost provider of vehicle location and recovery service. www.navicomgps.com
Global
Matrechs. Their “EKOR” radiation-resistant spray-on material for
the containment and safer transport of radioactive materials was originally
developed for the Chernobyl site. There are now 12 different derivatives
available.
Wave Dispersion
Technologies is a private company that has created two very successful
marine barrier products. Each is a floating breakwater – one designed to
mitigate wave damage and beach erosion called WhisprWave, the other a portable
small-craft intrusion barrier that is increasingly being used by the Military to
protect vital installations.
Civil Defense
Homeland Security also involves the technologies and
countermeasures employed by our First Responders, and to that end there is
considerable innovation and upgrading going on among First Responders. A primary
issue identified in the aftermath of 9-11 was the need for better communication
between departments.
Companies involved in this sector include: Taser, Onscreen
Technology, Roaming Messenger, MDM Group and Law Enforcement Technologies.
Roaming Messenger packages
time-critical information and decision points into a ‘smart courier’
message. The result is a messenger that roams throughout the wired and wireless
worlds - from mobile devices to desktop PCs to central servers - tracking down
people and getting responses to critical incidents in real-time.
Onscreen Technology
has created portable LED video displays utilizing a revolutionary patent pending
architecture that enables rapid visual communication to the masses during
catastrophic events. The screens are easy to set up, and can run off the power
supply of any vehicle.
Non-lethal
Weapons: Taser, by
far the most famous and widely used electrical ‘stun gun’ on the market, has
still only reached 8% penetration in the US Law Enforcement Market, meaning it
and its competitors have lots of room for growth. And competitors are coming!
Law
Enforcement Associates, a security and
surveillance technology company, has approved the final housing designs for its
new stun gun. The
Co.
has a projected March 2005 launch date for its
pistol-like weapon.
MDM
Group Inc. is working on ShockRounds™.
Fired from existing weapons, a
ShockRounds low-velocity specialized bullet generates an extremely high voltage
charge upon impact. The effect is similar to a Taser, but with much longer
range.
Biological Threat Protection
With the passing of the Project
Bioshield bill earlier this year promising $5.6 Billion over ten years, it
was expected there would be a flood of money into countermeasures for biological
attacks. So far, that hasn’t happened.
Part of the problem could be the complexity of the task.
And while Project Biowatch has
installed monitor and sensing equipment for airborne agents at the nation’s
most at-risk cities, it is still far form certain how we would be able to
respond even if an attack was identified by those sensors.
The government has so far not followed through on its
announced plans to stockpile millions of doses of Anthrax vaccine. Hospital
infrastructure, while being upgraded, is still far from adequate to meet a
large-scale attack. And terrorists potentially have access to many more deadly
toxins than vaccines exist for anyway! The picture is not encouraging.
Fortunately, there are companies working on options. Among
them is Aethlon Medical, who have
created a blood filtration device called a Hemopurifier that holds out hope of
being an effective countermeasure to a wide range of biological attacks.
The Homepurifier is essentially a ‘vacuum cleaner’ for
the blood that removes virus components. So far, it has proven remarkably
effective against HIV and Hepatitis C, and is now being tested against
bioweapons.
Other alternatives are also being explored by other companies, but judging by
the public information, at least, there is much more work required in developing
an effective suite of responses to a bioterror attack. Not to mention the work
needed on the potential of a ‘dirty’ nuclear-tinged device being detonated
anywhere in the
USA
, perhaps fuelled by some of the tons of high explosives that have been spirited
away by insurgents in
Iraq
.
In conclusion:
While the Nation’s ‘away game’ has lowered considerably the odds of
terrorists physically entering our country, the domestic preparedness in
the event that they DO manage to smuggle in WMD’s or a biological or nuclear
nature remains dubious.
Were such an event to take place, there is little doubt that investments
in many of the companies outlined here would skyrocket. For investors, it is a
catch-22 situation. While no one wants to bet on a new terrorist attack, in the
event that a large scale attack does
take place, it only makes sense to hold some security stocks in one’s
portfolio to defend against the losses that may be experienced in sectors
negatively affected by the attacken R. Gibson
Allen R.
Gibson
Editor
Allen R. Gibson has over twenty-five years of experience in media and corporate
communications. He has been a reporter, television producer, and marketing
communications consultant for public companies in both the US and Canada.
Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp,
www.homelanddefensestocks.com/Companies/HomelandDefense/Disclaimer.asp
©Copyright InvestorIdeas 2004
|
