Tracking ground transportation security spending can be complicated, both because of the sheer number of purchasers and the fact that organization buying security solutions (i.e., a local transportation administration) may be doing so with money from other sources (i.e., a federal grant).
By Scott Greiper and Mark Sauter
Scott Greiper : Head of the Convergent Security Group; Principal, Legend Merchant Group (www.legendmerchant.com)
Mark Sauter : Managing Director and Market Knowledge Lead, GrayDome Partners LLC (http://www.graydome.com/)
 This makes it easy to miss certain expenditures and double count others. Some of the numbers are clear. The U.S. federal government reports committing some US$400 million to ground transportation security since 9/11 for 60 of the country? rail mass transit, ferry, and intra-city bus systems in 25 states and the District of Columbia. A similar amount will be spent on ground transportation-related nuclear detection. In the three years following 9/11, the transit industry invested more than US$2 billion of its own money in security, according to the American Public Transportation Association.1) The railroad industry says that since 9/11 it has spent more than US$200 million on security precautions such as access control, scanning, cargo tracking and training.2) Major transit agencies, especially the New York MTA, appear to account for several hundred million dollars in additional spending (above funding received from the federal government).
1) Daniel Duff, Vice President of Government Affairs, American Public Transportation Association. Testimony before the House Committee on Government Reform on the 9/11 Recommendations, 8/3/2004.
2) Ibid, 6.
U.S. Federal Spending and Programs
Federal U.S. agencies have taken steps to provide direct support for transportation security. The U.S. Department of Homeland Security (DHS) funded the Program for Response Options and Technology Enhancements for Chemical/biological Terrorism (PROTECT). A combined chemical detection and camera network, the system is designed to detect an attack and help officials respond; it has been deployed in parts of the Washington, New York, and Boston transit systems. The Transportation Security Administration (TSA) is sending 30 canine teams and 100 inspectors to transit systems, along with providing technical assistance and training. It has also developed the "VIPER" program (Visible Intermodal Protection and Response) to rush air marshals and other security assets to high-risk locations.
However, the governments major contribution has been through grants and recent technology projects. Some of them include:
● Transit Security
Transit Security Grant Program (TSGP): The FY 2006 TSGP is designed to create sustainable, risk-based programs to protect transit systems from terrorism. The grant totals US$136 million, now working its way to end users, and is for heavy, light, and commuter rail, intracity bus and ferry systems. Tier I funding goes to specific systems and Tier II is allocated as risk-based competitive grants.
 The program allocates the bulk of its funding for rail security, with priorities for: protecting underwater and other tunnels and associated tracks from explosive attacks; building capabilities to prevent, detect, and respond to explosive attacks in other areas; and mitigating unique risks identified by individual transit systems in their security assessments.
The US$21 million for intracity bus security is primarily designed to prevent the use of buses as weapons. Priorities include inventory control, such as ignition key recognition systems and remote tracking/shut-down capabilities; access control and perimeter security at bus depots; video surveillance; suspicious behavior identification; and emergency response. US$5 million is provided to ferry operators, with priorities on mobile explosive detection and surveillance, perimeter security, training, and canine teams. In a related project, Smiths Detection was selected for a 2005 pilot program to screen passengers traveling on San Francisco-area ferries.
● Intercity Buses
Intercity Bus Security Grant Program (IBSGP): The FY 2006 IBSGP aims to protect bus travelers from terrorism. It provides US$9.5 million to those operating fixed route intercity and charter bus services. The grants may be used for products such as GPS tracking devices, video surveillance, access control, perimeter security, baggage screening technology and training.
● Intercity Passenger Rail
Intercity Passenger Rail Security Grant Program (IPRSGP): The FY 2006 IPRSGP focuses on "man-made and natural threats that could potentially have devastating impacts on the economy and communities throughout the nation." The program is solely dedicated to Amtrak, which is receiving US$7.2 million (up from US$6.3 million last year) in grant funding to enhance security in the Northeast Corridor (between Washington DC, and Boston), Amtraks Chicago hub, and high-risk urban areas on the West Coast. In 2002, Amtrak received US$100 million in special funding for safety and security improvements to tunnels connecting Manhattan to New Jersey and Long Island. Amtrak has also requested US$15 million in security funding through its own budget process for the coming fiscal year. The corporation has also recently concluded a US$4.7 million contract to secure tracks in Washington, D.C.
● Commuter Rail
Rail Technology Pilots: RSP, BRSS and TRIP: Some observers have looked at the scale and complexity of the transit security challenge and thrown up their hands. Yet a key essence of our nations "layered" security strategy is to avoid focusing on "all or nothing solutions." It is true that passenger and luggage screening of the type practiced at airports is not now technologically feasible for transit. Yet there remains substantial room to leverage new technologies to enhance passenger security and safety today and study next generation technologies that could produce security breakthroughs in the future. In addition, its not necessary to screen each passenger at every station all the time to produce security benefits. Such concepts are behind the Rail Security Project (RSP), Baltimore Rail Security Study (BRSS) and Transit and Rail Inspection Pilot (TRIP) programs. These federal pilot programs, while not a substantial source of funding (detailed costs are unavailable), have attracted major industry players who appear to believe they may lead to large deployments.
RSP : Perhaps the most immediate security challenge in mass transit is to prevent attackers from detonating body-borne (e.g., suicide vests) or leave-behind (e.g., suitcase bombs) explosive devices. One of RSPs primary aims is developing a "response package" that could be quickly deployed to specific systems based on threat information. The project includes identifying effective and efficient strategies for screening, known as concepts of operations (CONOPS), testing and endorsing equipment, and creating a training package for local transit employees and public security officials. Mandated by Congress, RSP is being conducted by DHS? Security Science & Technology Directorate (S&T) and its Counter Measures Test Bed project, working with Port Authority Trans-Hudson (PATH), a subsidiary of The Port Authority of New York and New Jersey. Field testing was completed and involved two phases at Exchange Place Station, located in Jersey City, N.J., a crowded train connection between New Jersey and Manhattan.
The first phase focused on "promising commercial technologies," including existing aviation security technologies. According to DHS, the technologies were required to pass qualification testing by the federal governments Transportation Security Laboratory (TSL); we believe this is a positive step in broadening the TSLs activities to nonaviation modes of transportation. During this phase, the technologies were "recalibrated" for detection in a rail environment. Detecting explosives at a distance and passenger screening were the focus of the second phase. This included CONOPS such as random passenger checks and screening of large bags.
RSP has been gathering and analyzing information from the tests such as false alarms, screening throughput, and suitability for integration into the rail passenger environment -- information DHS says it will share with equipment developers to foster improvement in future technologies. The government has also stated it will derive life-cycle cost information from the project to help generate effective transit security strategies. The prospect of future implementations of RSP-style security has attracted leading security companies. L-3 Communications and Brijot Imaging Systems, Inc. participated in the project.
BRSS: This is another project from S&T in partnership with the Maryland Transit Administration (MTA) and the Maryland Department of Transportation (MDOT). It is studying a detection system to detect explosive residue on passengers getting tickets before boarding. If explosives are detected, authorities are alerted and the passenger receives additional screening.
Cubic Corporation and GE Security provided their Early Warning Explosives Detection System (EWEDS) for its first operational test.
TRIP: A pre-cursor to RSP and BRSS was conducted during 2004. The Transit and Rail Inspection Pilot (TRIP) program evaluated the use of emerging technologies to screen passengers and their carry-on items for explosives. The program was a joint effort of DHS, TSA, the U.S. Department of Transportation, Amtrak, Maryland Rail Commuter (MARC), and the Washington Metropolitan Area Transit Authority (WMATA). In Maryland, the program evaluated the use of technologies for screening rail passengers and their baggage prior to boarding a train. At Washingtons Union Station, it tested screening equipment for checked baggage and cargo before loading, plus unclaimed baggage and temporarily stored items inside the station. On a moving Shoreline East commuter rail car in Connecticut, the project evaluated existing technologies for screening passengers and their baggage for explosives.
Some of the industrys major players including L-3 Communications, GE Security and Smiths Detection also participated in TRIP. According to DHS results from the pilot, passengers were receptive to screening and the tested technologies did not adversely impact operations. The project did indicate challenges posed by baggage and passenger volume, along with the highlighting the fact that transit facilities were not built to facilitate easy security screening.
● Freight Rail
National Capital Region Rail Security Pilot/ D.C. Rail Security Corridor (DCRSC) Project: DHS announced this program after public concerns and vulnerability assessments regarding trains carrying HAZMAT on tracks running through the Capital, in some cases within blocks of sensitive facilities. According to DHS, "The pilot project will include numerous components, including a virtual security fence that will detect moving objects, perimeter breaches, left objects, removed objects and loitering activity. Data from the fence and the gates will be encrypted and transmitted simultaneously to multiple locations, such as US Capitol Police, US Secret Service, CSX and other applicable federal or local agencies."
In July 2006 Duos Technologies, Inc., an emerging leader in ground transportation security, announced that it and its teaming partner, Epsilon Systems Solutions, Inc., had won the contract. With an anticipated US$9.8 million contract value, the project will harden seven miles of CSX rail tracks between Reagan National Airport and CSXs Benning Rail Yard in Washington D.C. Technologies will include intelligent video and Radio Frequency Identification (RFID). In a related project announced in August 2006 Duos and Epsilon were awarded a US$4.7 million contract to secure a segment of the Amtrak rail system in Washington, D.C.
DHS says it is now conducting assessments in various High Threat Urban Areas (HTUA) rail corridors at potential risk from HAZMAT, working with the Department of Transportation? (DOT) Federal Railroad Administration (FRA) and Pipeline and Hazardous Materials Safety Administration (PHMSA), railroads and private entities. Such assessments may bode well for more projects such as that in Washington.
● Urban Area Security
Urban Area(s) Security Initiative (UASI) Grants: Other DHS and federal grants may be used for transportation security under certain circumstances. For example, Urban Area(s) Security Initiative (UASI) grants totaled US$757.3 million in FY06 and some of the funding may be used for transportation security. In August 2006 California Gov. Arnold Schwarzenegger allocated US$2.9 million, some from his states UASI funds, to protect the Bay Area Rapid Transit tunnel between San Francisco and Oakland.3) Washingtons Metro received US$4 million in UASI funding this summer and will use the money for creating an alternate operations control center.4)
3) Kimra McPherson, "Schwarzenegger Earmarks US$2.9 Million to Boost BART Security," Mercury News, August 23, 2006.
4) Metro press release, July 19, 2006
● Access Control and Identification Management
Transportation Worker Identity Credential (TWIC): This large and troubled program is designed to provide a common credential to workers who need unsecured access to sensitive trucking and rail facilities, airports and seaports, and certain other locations. The roll out is expected to start with some 750,000 workers and ultimately expand to millions more. Each worker would have to pay up to US$150 to obtain the credential, which would require the worker to submit his fingerprints and undergo a background check against terrorist watch lists, criminal histories and other data. The credential will include biometric information; a card reader will confirm the identity of the person carrying it. However, in August 2006 the federal government delayed requirements that facility owners install biometric card readers, which various sources estimate to cost US$1,000 to US$6,000 each. This means the credential will apparently start as a "flash pass" I.D. card.
Piloted by BearingPoint, Inc. from 2004-5, the program is expected to cost the transportation industry scores of millions of dollars. The federal contract to manage the program could run into the hundreds of millions of dollars; TSA attempted to free up nearly US$20 million in funding for 2006.
● Trucking Security
The primary security threat in the trucking industry arises from shipments of HAZMAT. PHMSA issues HAZMAT safety rules, while the TSA is responsible for programs to keep terrorists from employing HAZMAT shipments in their attacks.
HAZPRINT: TSAs growing HAZPRINT program is the most prominent of various federal programs to protect the public from HAZMAT releases. Under HAZPRINT, commercial drivers who want to transport HAZMAT must provide their fingerprints and pass a background check in order to receive a Hazardous Materials Endorsement (HME) to their Commercial Drivers License (CDL). Integrated Biometric Technology (IBT), a division of L-1 Identity Solutions, has become the dominant contractor for government agencies operating these programs. The company recently announced a contract worth up to US$10 million to operate the service for the State of Illinois. The company says it has won 75% of such state contracts and now operates enrollment sites at about 250 locations in 34 states and the District of Columbia. Last year ComnetiX, Inc., a provider of biometric identification and authentication solutions, announced it would provide fingerprinting services to IBT in support of its HAZPRINT efforts.
Highway Watch: In 2006, DHS is providing US$4.8 million to the ATA for the Highway Watch program, which is training hundreds of thousands of trucking industry employees to identify safety and security issues on the road. The effort includes maintaining a Highway Watch Call Center and operating an Information Sharing and Analysis Center (ISAC). DHS reports it has provided more than US$45 million to the program over recent years.
HAZMAT Truck Security Pilot: Started in 2005, the US$4 million project is testing tracking, detection, and disabling technologies to prevent the unauthorized use of trucks carrying dangerous chemicals.
● Nuclear Detection
Advanced Spectroscopic Portal Program and related projects: Created in 2005, DHSs Domestic Nuclear Detection Office (DNDO) attempts to prevent radioactive material from being smuggled into the United States. It is now involved in a US$1.3 billion program (with US$342 million in additional over-runs projected by one government study) to install radiation detectors at U.S. ports-of-entry, including 205 land and rail crossings. The agency is acquiring and deploying radiation detectors for use by the Customs and Border Patrol (CPB) with the 2009 goal of screening all cargo, vehicles, and individuals coming into the United States without creating major delays in travel time. This is a daunting challenge given that everyday U.S. inspectors must process about 64,000 containers arriving in the United States via ships, trucks, and rail cars; 365,000 vehicles; and more than 1.1 million people.5) CPB inspectors use three major types of radiation detection technology:
?Radiation portal monitors (to detect gamma radiation and neutrons)
?Personal radiation detectors, called "pagers" (small handheld safety devices that detect gamma radiation, but not neutrons)
?Isotope identification devices (handheld devices designed to determine theidentity of radioactive material, i.e., distinguish natural, commercial, and weapons grade radiation)
As part of this effort, DHS has announced the Advanced Spectroscopic Portal Program, a contract worth up to US$1.15 billion, to develop and deploy 1,400 ?econd-generation?portals. Designed to produce more accurate portals and reduce ?alse positive?readings, the contract was won by Raytheon Corporation, Thermo Electron Company, and Canberra Industries. 967 portals had been planned for land and rail crossings compared with 1,205 for seaports and international airports. Assuming a mid-range of old and new portal technologies, portal spending for these land crossings could total US$400 million or more. DHS is also reportedly in the process of purchasing 6,500 additional ?agers?and 900 more isotope identification devices; this procurement will likely run into the tens-of millions-of-dollars. Further opportunities exist for technology to improve information sharing with other government agencies, such as the Nuclear Regulatory Commission (NRC), and increase operational capabilities and throughput.
5) "Combating Nuclear Smuggling: DHS Has Made Progress Deploying Radiation Detection Equipment at U.S. Ports-of-Entry, but Concerns Remain," GAO Report, March, 2006.
● Border Security and Other Federal Programs
Secure Border Initiative (SBI-net) and others: Numerous other federal programs include funding for what we consider transportation security technology.
U.S. State/Local Spending and Programs
Most commuter transit systems are operated by government or quasi-governmental agencies. These organizations typically face severe financial pressure -- the fares from their customers often do not cover operating costs, leaving them reliant on government support. This can squeeze funding available for anything but essential services. However, since 9/11, and with renewed emphasis since the London subway bombings in 2005, these agencies have focused on security. We spot checked public records on 2006 anticipated security budgets among Americas approximately two dozen major transit agencies. They ranged from the NY MTA, where yearly spending imputed from its multi-year security budget probably approaches US$100 million, to US$21 million for Chicagos commuter rail system and US$38.5 million for Washington, D.C.s transit agency.
The MTA is the largest in the nation and a clear terrorist target. As of December 31, 2005, the MTA had committed US$428 million of what is expected to be a US$721 million program of "Phase 1" capital improvements for security. The projects include improving tunnels and support structures, protecting perimeters, improving fire prevention and evacuation, and installing surveillance and other electronic security measures. By some estimates 1,000 cameras and 3,000 motion detectors could be installed during the project, which includes a US$212 million contract to Lockheed Martin Corp. for an integrated electronic surveillance system. Lockheed team members include ARINC Inc.; Slattery Skanska USA Civil Inc.; SYSTRA Engineering; Intergraph Corp.; Cubic Corp., and Lenel Systems International, Inc. The project, announced in 2005, has reportedly already increased in cost by millions of dollars. "Phase 2" of the larger MTA program was expected to cost at least US$495 million; MTA officials are now working with outside consultants to revise the budget based on current terrorist threats.6) One MTA effort is a US$5.2 million pilot project to outfit 400 New York buses with surveillance cameras from North Carolinas Integrian, Inc. The cameras will initially record images but may be upgraded to provide live transmissions to a command center. While focused on security, the MTA believes the cameras may detect fraud and thus help reduce the millions of dollars in accident claims it lays out yearly. Should the pilot prove successful, it will be extended to the entire fleet of 4,500 buses.7)
The Chicago Transit Authority (CTA) has already installed security cameras on all its buses and is now undertaking a US$12.7 million program to install them at 22 subway stations and non-public areas, bringing its total number of cameras to almost 800. The CTA wants to spend US$20 million more on surveillance systems, plus include cameras in its requirements for new subway trains.8)
Bus cameras are also on the agenda at Miami-Dade Transit (MDT), which recently placed orders that could ultimately exceed US$6 million, and Washington, D.C., where 585 Metrobuses (roughly 40 percent of the fleet) have on-board cameras. All new Washington buses are equipped with video cameras.
6) Alan G. Hevesi, New York State Comptroller, Report dated March 2, 2006.
7) Pete Donohue, "Bus-ted! MTA Will Be Watching You," Daily News, August 3, 2006.
8) CTA press release, September 9, 2005.
Private Sector Spending
One of the most significant variables in estimating the ground transportation security sector is spending by the private sector. The major private transportation operators are the rail and trucking industry. As noted earlier, the railroad industry says that since 9/11 it has spent more than US$200 million on security precautions such as access control, scanning, cargo tracking and training. We believe this spending will continue and may even increase given increasing railroad budgets and awareness of security ROI. As discussed elsewhere, ROI security solutions exist for the trucking industry, but so far they are being deployed relatively slowly.
A key emerging factor is pressure by manufacturers themselves for better security from their shippers. As discussed below, this may also include direct spending by the manufacturers on security technology and supply chain efficiency.
For more info., contact to email swm@infothe.com
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