The Department of Homeland Security canceled Boeing's border fence program Friday, putting an end to a five-year-long project plagued by delays and technical problems.
The Secured Border Initiative Net, or SBI Net, is a network of ground tower-mounted sensors, cameras and radars that President George W. Bush's administration backed five years ago as a security measure.
It was originally envisioned to stretch the 1,969-mile U.S.-Mexican border, but initial phases of the $1 billion project took longer than anticipated to complete and covered just a small portion, 53 miles in Arizona, since the project began.
In a statement Friday, Homeland Security Secretary Janet Napolitano said SBI Net "cannot meet its original objective of providing a single, integrated border security technology solution."
The program was part of Boeing's St. Louis County-based defense unit, but the termination of the contract is not expected to affect local jobs.
Homeland Security will use the technology gleaned from SBI Net to develop a plan costing less than $750 million that will cover the remaining 323 miles of the Arizona border, according to an assessment the Homeland Security agency sent to Congress on Friday.
"There is no 'one-size-fits-all' solution to meet our border technology needs, and this new strategy is tailored to the unique needs of each border region, providing faster deployment of technology, better coverage, and a more effective balance between cost and capability," Napolitano said in the statement.
Boeing wouldn't comment on whether it will bid on the new program proposed by the Homeland Security.
"It's really too early to speculate about that," said Deborah Bosick, Boeing SBI Net's spokesperson. "They haven't come out with their requirements yet."
In a statement, Boeing said it appreciated Homeland Security's recognition of "the value of the integrated fixed towers Boeing has built, tested and delivered so far."
"We are proud of the accomplishments of our team and of the unprecedented capabilities delivered in the last year that provide Border Patrol agents increased safety, situational awareness and operational efficiency," the statement continued. "Boeing remains committed to providing valuable solutions and supporting DHS."
Loren Thompson, a defense analyst at the Lexington Insitute, a Lexington, Va.-based think tank, said the news wasn't unexpected but is a setback for Boeing, which has sought to diversify in recent years.
"This is a big disappointment for Boeing," Thompson said. It really won't have an impact on the company's financial results, "but it was a new line of business they were hoping to expand into."
Boeing sought to diversify as its sales of military planes dropped in recent years.
Despite the project's cancellation by Homeland Security, Boeing won't abandon efforts to build its border security and surveillance systems business, he said.
The Houston Chronicle and Bloomberg News contributed to this report.
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