DHS turns back on U.K. company to secure its buildings

Published 18 April 2006

Growing sensitivity in the United States about foreign ownership of critical infrastructure assets and sensitive technology already claimed two victims: The DP World port management deal, and the Check Point-Sourcefire acquisition plan. Both deals were withdrawn after the companies involved concluded that the deals would be blocked — DP World after it had already been approved by CFIUS; the Columbia, Maryland-based Sourcefire one before it had been fully vetted. The same sensitivity is also apparent in other countries, as evidenced by the recent decision by Belcamp, Maryland-based SafeNet to withdraw its plan to acquire Cambridge, U.K.-based nCipher, after the British authorities let it be known that they did not like the idea of a sensitive-technology U.K. company being owned by a non-U.K. entity.

All this will have a chilling effect on the globalization of the security market. The most recent example: DHS was planning to use a British-based security firm to protect the buildings where U.S. domestic security policy is formed, but changed its mind. Instead of using Wackenhut Services, the department awarded the five-year, $29 million contract to Chantilly, Virginia-based Paragon Systems.