Defense Firms Eye Potential Boost From Provisions in Stimulus Package
Friday, February 13, 2009
Hundreds of millions of dollars have been allocated in the economic stimulus package to programs that could directly benefit several major government contracting companies.
Defense contractors including Boeing, Northrop Grumman and Raytheon, along with L-3 Communications Holdings, General Electric and Reveal Imaging Technologies, may see boosts on a range of their government projects such as securing the U.S. Southwest border, building satellites and selling baggage screening equipment, according to a watchdog group.
"It may not be an earmark per se, but it looks and feels like one," said Steve Ellis, vice president of Taxpayers for Common Sense. "If we're talking about stimulating the economy, we should be spending money on the most critical and important needs rather than a benefit to certain companies' bottom lines."
Some details of the stimulus package are still being worked out; it could clear Congress today. Some of these specific contract allocations were included in either House or Senate versions. It's not clear which ones will survive the conference process; however, they have not been publicly identified as having been cut.
In the Senate version of the bill, for instance, Boeing would get $200 million for a "virtual fence" project to help secure the Southwest border. The $1 billion project, known as SBInet, has had some technical troubles. Last year, the Department of Homeland Security stopped the project, but it is expected to start again soon.
Boeing did not "ask anyone up on the Hill to put the $200 million into the stimulus bill for SBInet," company spokesman Tim Neale said. "We did not actively lobby on this."
The House and Senate versions of the package proposed money to build a satellite system to monitor climate change. Northrop Grumman and Raytheon have been working on such a satellite system for the Pentagon and the National Oceanic and Atmospheric Administration.
Randy Belote, a spokesman for Northrop, said that with the stimulus money, "we could add sensors back on to the satellite, which would then directly affect the hiring of new employees." He said that adding the sensors could help create between 1,000 and 1,500 jobs. A Raytheon spokeswoman had no comment.
Another part of the Senate stimulus bill included about $1 billion to buy and install baggage-screening equipment and machines that detect explosives at airports. L-3 Communications, General Electric and Reveal Technologies currently produce that gear.
A spokeswoman at L-3 declined to comment. Dennis Cooke, president and chief executive of General Electric's security and homeland protection business, said in an e-mail that it is "too early to predict our share of the equipment orders," but said "this will have a direct and positive impact on jobs as we build the explosive detection systems at our Newark, Calif., facility."
Michael Ellenbogen, chief executive at Reveal, said the money in the bill could help create 200 to 400 jobs at his firm and suppliers.
Research editor Lucy Shackelford contributed to this report.