Outside In

For many small companies, doing business with the government is a labyrinthine affair. The seemingly impenetrable bureaucracy of the Homeland Security Department, in particular, has been enough to scare away many small technology companies that could be government contractors.

Intecon was one such company. In the late 1990s, when most of the venture capital that had flowed through Southern California in the dot com boom was drying up, the San Diego-area firm faced a familiar dilemma, says founder Ralph Sias: "We were out of money and had a great concept."

That concept was a novel way for disinfecting "clean rooms," the sterile environments used in electronics or pharmaceuticals manufacturing. Sias developed a technique for passing hydrogen peroxide through a stream of plasma at low temperatures. The theoretically simple technique was also highly effective.

But with no funding, Sias and his colleagues nearly abandoned hope of turning their idea into a real product. Then, in early 2000, Sias found an online ad for a new venture organization that had been started in San Diego, one that was trying to get innovative tech firms into business with the Defense Department. Sias had figured that his plasma device could be applied to medical use, and the military would certainly make a good customer. "But with our tiny, limited resources, we hadn't been able to do any work at all defining that market," he said.

The Center for the Commercialization of Advanced Technology, a congressionally funded consortium of prominent Defense contractors and universities, put Intecon through a rigorous screening process to determine if its technology was feasible and marketable. CCAT gave Intecon $60,000 to perform market research, which confirmed there were prospective customers in the medical industry and the military.

With their technology and market validated, things started to snowball. A friend of Sias' put him in touch with Jaycor Corp., a well-established government technology contractor that was looking to penetrate the decontamination market. With strong support from the well-respected heads of CCAT, Sias said he could prove to Jaycor that he and his colleagues weren't "snake oil salesmen."

Jaycor agreed to fund Intecon's research and development. And three months later, Jaycor was acquired by Titan Corp., an even bigger Defense and technology contractor. Then, all kinds of doors started to open, Sias said.

"It was hard to get any serious attention paid to us [by the government], until we got into the mix with Titan," he said, describing the new level of interest as "kind of awe inspiring." Titan has an extensive track record developing technology and combat systems, and was able to bring Intecon into the game as few others could.

The new attention also coincided with a macabre opening of a new market. The October 2001 anthrax attacks proved there would soon be an even larger market for Sias' decontamination technology. Intecon has since conducted a number of studies showing the plasma spray is highly effective at killing anthrax and other toxins.

As Intecon continues to develop and perfect its device, Sias is keeping close watch on the Homeland Security Department. Officials there have signaled that some of their top priorities for new acquisitions will be chemical and biological agent detection and clean-up devices. With its new network of contacts now even more extensive following Titan's acquisition by Lockheed-Martin, Intecon is a perfect example of a small outsider that went from Nowheresville to a sweet spot in the burgeoning homeland security market.

Finding Clearance

A prominent Washington trade association is conducting a survey of the projected need for security clearances among its members as the government struggles to winnow down a major backlog in its clearance-granting process.

The Aerospace Industries Association, which represents makers of commercial, military and business aircraft, announced this month that it would try and ascertain its membership's current and future need for security clearances. The move comes as the Defense Department unit that processes clearances for military personnel and contractors has merged into its civilian counterpart at the Office of Personnel Management.

In fiscal 2002, those two agencies received more than 1.2 million requests for clearances. OPM hires a private firm to conduct background checks, and a number of other companies have signaled their intent to vie for the government's clearance business. Almost 2,000 government investigators have moved from Defense to OPM as part of the merger, which became official Oct. 1.

Security clearances are particularly valuable for technology companies, who find they're increasingly a requirement for homeland security work.