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Defense, Homeland Security Boost Reston Economy

Firms with headquarters or major offices in Reston have received billions of dollars in contracts for the Iraq War and the War on Terror.

As Titan Corporation opened the doors to its new 16-story regional headquarters last week at Reston Town Center, it joined one of the fastest-growing segment of Reston's economy — multi-billion dollar defense and homeland security contractors.

California-based Titan, which provides information and communication services to defense and intelligence agencies, moved its Washington, D.C. area headquarters from Tyson's Corner to Reston because of the easy access to Dulles International Airport and the area's high quality of living.

"Over the years as Titan has continued to grow, so has our presence in Fairfax County," said Wil Williams, Titan's spokesman. "This new complex continues to reflect that growth, our anticipation of even more, and the centralized and excellent business environment."

Titan's relocation to Reston places the $2 billion corporation alongside the headquarters or major offices of at least 12 of its fellow multi-national defense and homeland security contractors.

And since the Sept. 11, 2001 terrorist attacks and the onset of the Iraq War, these contractors have enjoyed a windfall of billions of dollars from the federal government.

"If it's not the fastest-growing sector of business in Reston, it's certainly one of the fastest," said Gerald Gordon, president of the Fairfax County Economic Development Authority.

DURING THE FISCAL YEAR that ended in September 2003, the federal government spent $42.2 billion on goods and services from contractors in the Washington area — a $6.1 billion increase over the previous year, according to a study released last month by the George Mason University Center for Regional Analysis.

The majority of the higher spending is related to fighting the Iraq War and the War on Terror, along with rebuilding Iraq and Afghanistan. And many of the recipients of the unprecedented federal procurement spending are located in Reston.

That's because of Reston's convenient location and quality of life, said Stephen Fuller, director of the Center for Regional Analysis.

"Locations between the Pentagon and Dulles Airport have been preferred for obvious reasons and the availability of high quality office space in proximity to good housing and amenities, schools, and a smart work force with ample fiber optics all make the Dulles corridor an ideal location," he said.

The spike in federal defense and homeland security funds has helped create tens of thousands of new jobs and sparked economic growth in Northern Virginia while other metropolitan regions around the country are struggling. In Fairfax County, the Tyson's Corner and Reston areas have been the engine driving that economic boom.

WAR AND THE THREAT of future terrorist attacks has meant big business over the last three years for several local defense and homeland security firms.

Accenture, a technology firm located in Reston, was awarded a $10 billion, 10-year homeland security contract in June to secure U.S. borders using biometrics technology, which uses finger scans and photographs of incoming immigrants to determine if they are wanted criminals or known terrorists.

In April, homeland security contractor, STG International Inc., moved its corporate headquarters to Plaza America in Reston. A $170 million company, STG is part of a team of contractors that was awarded a $175 million grant to develop and maintain a human resources network for the Department of Homeland Security.

DynCorp, also located at Plaza America, was awarded a multi-million dollar contract in April to advise the Iraqi government on setting up law enforcement, judicial and correctional agencies. The firm will also arrange for up to 1,000 U.S. civilian law enforcement experts to travel to Iraq to help locals assess threats and mentor government officials on security and administration, according to a database of government contracts collected by the non-partisan Center for Public Integrity.

And two year ago the Homeland Security Department awarded a $1 billion contract to Pennsylvania-based Unisys Corp., which occupies a 173,717-square-foot office building in Reston. The seven-year contract is to develop the Transportation Security Administration's information technology and telecommunications infrastructure.

In September 2003, Raytheon, which operates a major office building on Sunrise Valley Drive, was awarded a $39.4 million contract to store and develop any nuclear, chemical or biological weapons discovered in Iraq, according to the CPI contracts database. Raytheon also makes Tomahawk cruise missiles and laser-guided bombs, both of which played a significant role in the Iraq War and War in Afghanistan.

BUT FEW CONTRACTORS have drawn as much attention as Reston's newest arrival, Titan Corp. Titan has been awarded at least $402 million in Department of Defense contracts for the Iraq War and made headlines last May for being one of two firms that employed civilian interrogators who were allegedly present during the Abu Ghraib prison abuses.

Titan officials downplayed the significance of its role in the Abu Ghraib atrocities last week at the Reston office buildings opening, saying the abuses of a few bad employees should not reflect poorly on the entire corporation.

The roles of Titan and Arlington-based contractor CACI in the Abu Ghraib prison abuse scandal drew attention to the issue of military contractors operating in Iraq and Afghanistan, which operate with little government oversight.

But while the future of military contractors operating abroad is unclear, local defense and homeland security outsourcing is expected to remain strong.

According to a report issued last May by Reston-based market research firm Input, Inc., defense technology outsourcing will continue to grow steadily from $3.8 billion in 2003 to $7.4 billion in 2008.