Boeing virtual fence: $30 billion failure

Summary:The Department of Homeland Security "virtual fence" project, being built by Boeing, is in big, big trouble. The virtual fence is a high-tech network of cameras, lighting, sensors, and technology designed to intercept illegal border crossings.

The Department of Homeland Security "virtual fence" project, being built by Boeing, is in big, big trouble. The virtual fence is a high-tech network of cameras, lighting, sensors, and technology designed to intercept illegal border crossings. According to the Wall Street Journal:

Boeing Co. has changed the management of an electronic-surveillance project along the U.S.-Mexican border after falling more than two months behind schedule, marking the complications involved in setting up a new generation of border security.

The project, part of a larger Department of Homeland Security program called SBInet, is a critical link in the plan to use technology to monitor the borders for illegal immigrants, drug smugglers and possible terrorists. Towers set up along a stretch of the border near Nogales, Ariz., are supposed to use motion sensors, cameras and radar to keep track of wide areas. According to the government, Boeing has had trouble getting the different components to work together without glitches.

The government's plans for monitoring as much as 6,000 miles of the Canadian and Mexican borders hinge on towers such as these working properly. If they prove ineffective, officials could be forced to spend billions of dollars for more traditional security measures, such as fences and more officers. The Homeland Security Department currently estimates that the virtual fence will cost about $8 billion through 2013, although the agency's inspector general wrote last November that the cost could balloon to $30 billion.

Additional information can be found in a superb article by Joseph Richey, of the Nation Institute, which funds investigative journalism:

In Washington, U.S. Congressional representatives are already bristling at the skyrocketing costs of SBInet. Since Boeing won the contract last year, the estimated cost of securing the southwest border has gone from $2.5 billion to an estimated $8 billion just a few months later. When Republican Congressman Duncan Hunter asked SBInet Director Giddens for the real costs at a February 2007 hearing of the House of Representatives Oversight Committee, Giddens replied: "I wish I could answer that with greater clarity."

At the same Congressional hearings, Boeing vice president and SBInet program manager, Jerry McElwee, took heat from Congressman William Lacy Clay who demanded information about the ballooning costs and the extension of the contract period. "You bid on these contracts and then you come back and say, 'Oh we need more time. It costs more than twice as much.' Are you gaming the taxpayers here? Or gaming DHS?" the Missouri Democrat asked.

DHS's own inspector general, Richard Skinner, says that the Boeing contract is in the "high-risk" category for waste and abuse because of its scope, its dollar value, and "the vulnerabilities stemming from the lack of acquisition management capacity."

A major concern is the pyramid-like management structure that critics say have led to cost overruns and poor quality in other major projects. They note that the multiple subcontracting tiers allow Boeing to exact a cut at every turn, and create a conflict of interest because the company is also in charge of oversight.

This failure has the potential to eventually rival the UK National Health Service disaster, known affectionately as the "greatest IT disaster in history." It also brings back memories of the Airbus failure, in which multiple project segments failed to work when brought together as a finished unit.

The level of planning and coordination required to complete a project like this on time and budget almost defies human capability. Why don't they break it down into smaller, simpler components, increasing the likelihood the thing can actually be built?

Update 9/10/07: DHS has another failure on its hands. Read about it here.

Topics: Government

About

Michael Krigsman is recognized internationally as an analyst, strategy advisor, enterprise advocate, and blogger. For CIOs and IT leadership, he addresses issues such as innovation, business transformation, project-related business objectives and strategy, and vendor planning. For enterprise software vendors and venture-funded star... Full Bio

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