Senate-approved immigration legislation could give billions to federal contractors

Enactment of the sweeping immigration bill now before Congress would yield billions of dollars in new and expanded federal contracts for a host of defense and tech companies.

The legislation, which cleared the Senate last week, would direct the government to buy everything from four new drone aircraft and 15 Blackhawk helicopters to night vision goggles and high tech surveillance systems.

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Most of the new spending is included in a $38 billion border security amendment sponsored by Sens. Bob Corker (R-Tenn.) and John Hoeven (R-N.D.) that was added to the bill in the hopes it would build GOP support in the Senate.

One Senate Democrat described the amendment as reading “like a Christmas wish list for Halliburton.”

“I am sure there are federal contracting firms high-fiving at the prospect of all of the spending demanded by some of our friends on the other side in this amendment,” Judiciary Committee Chairman Patrick Leahy said during the upper chamber’s consideration of the legislation.

Fourteen Republican senators voted to approve the bill, which faces tougher prospects in the House.

Including the Corker-Hoeven amendment, the bill would spend $46 billion on border security, most of which would pay the salaries of 20,000 new border patrol agents and go toward other direct government expenditures.

But a significant chunk would be left for contractors to fight over, particularly in the tech and defense industries. In addition, the Corker-Hoeven language suspends certain competition requirements, making it easier for select companies to be chosen for contracts.

The amendment lays out a list of dozens of items to be acquired and positioned along the southwestern border. Some, as in the case of the Sikorsky Blackhawak helicopters, are identified by name, while others would be more competitive.

As written, the bill would ramp up Customs and Border Protection’s “Integrated Fixed Towers (IFT) Program,” designed to let agents better detect illegal border crossings via towers equipped with radar and infrared cameras.

The plan calls for 87 such towers in California, Arizona and Texas. Defense heavyweights including Lockheed Martin and Raytheon are seen as being among the top contenders for the contract.

In a statement, Lockheed pointed to its 25-year record of fielding successful border security technology, including the P-3 aircraft and its “Gyrocam” camera system. The firm said it is ready to move forward with the fixed tower program.

Apart from the amendment, the legislation contains $22 billion in discretionary spending, which would pay for a combination of border measures and other programs. They include an expanded electronic worker verification system, an overhaul of existing visa programs and more money for immigration courts.

The legislation would place a greater emphasis on the use of “biometric,” or photo-matching technology. Companies like Accenture, which already provides similar services under federal contract and lobbied on the bill, would be well positioned for added business.

Accenture, along with other firms, including Microsoft and IBM, declined to comment on the legislation. Some firms emphasized that the bill must still pass the House, and that if it does it could be changed significantly.

Some observers say the final product is unlikely to amount to a game-changer for contractors, who are already suffering from the effects of sequestration.

“People may see this top-line number and think it's a gravy train, but there's less for contractors than meets the eye,” said Stewart Verdery, the founder and partner of Monument Policy Group and former Department of Homeland Security official. Verdery was the assistant secretary for policy at the department during its early years.

The bill also contains $11.8 billion expenditure for the first fiscal year to cover start-up costs, including $1.5 billion for fencing and $750 million to expend and implement E-Verify.

“I don't see it as a game changer for companies in this space,” Verdery said. “It’s not going to be as much of a sea change as it was the three years after 9/11, there will be a much more modest increase in DHS contracts.”

Until a clearer picture of the legislation presents itself, experts say, companies are flying under the radar and watching the bill just like everyone else.

“Substantial resources are not going to be expended to take advantage of the opportunities that might present themselves until they know that any new approach will be passed into law,” said a contracting industry official, who asked to remain anonymous because of the sensitivity around the issue.

— This story was corrected on July 3 to reflect the spending on border security authorized by the Corker-Hoeven amendment.