TrendMilitary contractors move aggressively into civil security

Published 29 July 2008

BAE’s acquisition of Detica, a company with a large portfolio of British civil IT contracts, exemplifies the EU policy of encouraging military firms to use their knowledge of homeland security; civil libertarians are worried

BAE Systems is set to acquire a large portfolio of British civil IT contracts in a move that some see as justifying the argument that the war on terror has allowed the military industry’s advance on civilian concerns. U.K., U.S., and EU policy has encouraged military firms to get into civil security. Mark Ballard writes in the Inquirer that the justification is that the boundary between internal and external security is being eroded, and that the theatre of war is no longer lined up on a battle field: new technologies combined with vast global inequalities of wealth, environmental catastrophes, and instability in the Middle East and Africa have increased the probability that terrorists and organized criminals will try to undermine rich Western states from within. BAE said it had offered £0.54 billion for the purchase of all shares belonging to Detica, a U.K. firm with an array of civilian IT contracts with the police, local government, banking, telecoms, transport, and health sectors. It is unprecedented for a military firm to get such a strong presence in civilian affairs. Alexander Garton, who advised BAE on the acquisition for RBS Hoare Govett, said this was, “the one and only” deal of this type to have been brokered in the United Kingdom. He compared BAE plus Detica with Raytheon, a U.S. military firm that has gained a strong foothold in homeland security. Raytheon also leads the consortium of suppliers building the U.K. eBorder fortress, which includes Detica. Ballard writes that EU governments have encouraged such deals because they fear that U.S. military firms were getting a competitive advantage over their own arms industries because of the vast amount of money they were earning from contracts for homeland security. The U.S. Department of Homeland Security has been spending $0.8 billion a year on technology to monitor for civilians for security threats. European governments have stressed how combining their spending on military and civil security tech is vital for their economic competitiveness. “Competitiveness of markets makes Eisenhower’s fears less relevant today,” said John Reid, the U.K. then home secretary, before a surveillance industry conference in 2006.

BAE’s purchase of Detica is just the kind of deal that has been hoped for. Detica advises U.K. local government authorities on IT systems development. It is one of just nine firms certified to supply “Multi-Disciplinary Consultancy” services for public sector customers under the Office of Government Commerce’s Catalyst framework