OCTOBER/NOVEMBER 2006

S ECURIT Y
EXECUTIv E
A PUBlICATION OF ThE NATIONAl ASSOCIATION OF SECURITY COMPANIES

WINGING
IT IS ThE AVIAN FlU ThE NEXT
PANDEMIC? IS YOUR BUSINESS
PREPARED?

AlSO INSIDE…

> S P E C I A l R E P O RT: A S I S 2 0 0 6 10
> A FERTIlE ENVIRONMENT FOR SUBCONTRACTING 18
> lEGISlATIVE UPDATE 20

WWW.SECURITYEXECUTIVE.ORG
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Table of Contents

FEATURES
OCTOBER/NOVEMBER 2006 • VOlUME 1, NO. 3
W W W. S E C U R I T Y E X E C U T I V E . O R G

EDITORIAl
Winging It Publisher
Is the avian flu the next pandemic? Is your

12
Joseph Ricci, CAE
business prepared? jricci@nasco.org
Editor
Prepared by CRI’s WAIS Jennifer Sikorski
editor@securityexecutive.org

DESIGN & PRODUCTION

Art Director
A Fertile environment for Jacki Silvan
Subcontracting art@securityexecutive.org

As the practice takes hold of the industry,

18
take care to avoid insurance snafus. ADVERTISING SAlES
Joan Daly
By Mike Lehner joan@securityexecutive.org

BOARD OF DIRECTORS
IN EVERY ISSUE Chair: Martin Herman, Special Response Corporation
1st Vice Chair: Heather O’Brien, Security Forces, Inc.
2nd Vice Chair: James McNulty, Securitas Security Services USA
2 Calendar of Events 3rd Vice Chair: Stephen I. Kasloff, Guardsmark, LLC
Treasurer: Lynn C. Oliver, American Security Programs, Inc.
4 In the News Secretary: Robert Kilbride, The Wackenhut Corporation
Director-At-Large
HoT ToPIc: Companies Plan for Avian Flu Pandemic, but Dennis Roberts, SecTek
Outcomes Remain Uncertain Executive Director: Joseph Ricci, NASCO
bUSINeSS FocUS: Mergers, Acquisitions to Continue Past Chair: G. R. Massimei, U.S. Security Associates, Inc.

Security Executive is published bimonthly by the National Association of

PArTNerING UP: AlliedBarton Joins Corporate Partnership
Program to Support IACLEA, Campus Public Safety
bUSINeSS beST: ARES International Security Ranks No. 47
on 2006 Inc. 500 Fastest Growing Companies
Security Companies (NASCO), the nation’s largest contract security trade
association. Security Executive is designed to provide practical information on
all aspects of security management. Subscription rates: Free for members and
non-members in the U.S., Mexico and Canada; $45 for international members;
$55 for international non-members. Security Executive content may not be
photocopied, reproduced or redistributed without the consent of the publisher.
Copyright 2006. All rights reserved.

UNIoN PrIorITIeS: Union Takes Issue with Fitness Rules for
Nuclear Plant Guards
From THe HILL: Bush Signs Defense Authorization
cHANGING FocUS: Kroll Looks to Sell Security Subsidiary,
Focus on Consulting and Training
Security Executive is distributed to more than 5,000 decision-makers at nearly
3,000 contract security companies.
Opinions or statements of authors and advertisers appearing in Security
Executive are their own and do not necessarily represent the opinions or
statements of NASCO, its board of directors or NASCO staff.
Security Executive welcomes article submissions and reader feedback. Articles
and comments may be e-mailed to editor@securityexecutive.org. Include your full
name, address and phone number.

8 NASCO News For questions regarding subscriptions, please call 703.518.1478.

boArD rePorT: NASCO Elects Board of Directors Postmaster: Send address changes to Security Executive, 1625
Prince Street, Suite 225-B, Alexandria, VA 22314.
member beNeFITS: NASCO Launches Database of State
Licensing, Private Security Regulation
eveNT HIGHLIGHT: First NASCO/FPS Working Group
Scheduled for Nov. 29
SPecIAL rePorT: NASCO Contract Security Breakfast Attracts
Nearly 100 Senior Contract Secuirty Leaders National Association of Security Companies
1625 Prince Street, Suite 225-B | Alexandria, VA 22314
20 Legislative Updates www.nasco.org
cover Photograph: Jean schweitzer | agency: Dreamstime

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

1
 Calendar of Events

November 8–9
CALSAGA 2006 Annual Conference
Temecula, Calif.
www.calsaga.org

SCHEDULING November 15–16

OSAC 2006 Annual Briefing
TIME & ATTENDANCE Washington, D.C.
www.osac.gov
PAYROLL
COMPLIANCE
MANAGEMENT
November 15–16
BENEFITS Securing New Ground
New York, N.Y.
ADMINISTRATION www.securingnewground.com
PERFORMANCE
TRACKING
REAL-TIME REPORTING November 27–December 1
The 4th International Aviation
24/7 SUPPORT Security Technology Symposium
Washington, D.C.
www.sskies.org/symposium.htm

Valiant helps more than 60% of

the largest, fastest growing
national and regional contract November 29
NASCO FPS Working Group
security companies harness the
Washington, D.C.
speed and power of technology www.nasco.org
to work smarter, more produc-
tively every day!

Don’t let others capture the December 4–6

ASIS International Middle East Security
competitive advantage, contact a
Conference & Exhibition 2006
Valiant Workforce Management The Kingdom of Bahrain
www.asismiddleeast.com
Solutions representative today!

December 6–8
ASIS International Security Force
Management
www.valiant.com St. Pete Beach, Fla.
800-521-4555 www.asisonline.org/store/program_
info@valiant.com detail.xml?id=12322583

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG


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 In the news
companies Plan for Avian Flu Pandemic,
HOT TOPIC
but outcomes remain Uncertain
The majority of global corporations have
developed, or are developing, detailed avian
flu pandemic readiness plans, according to a
report from The Conference Board. Nearly
three-fourths of the 553 responding global
companies either have a plan or are well into
developing one, and 85% of survey partici-
pants began their planning efforts within the
past 12 months.
Large and publicly held companies appear to
be the most advanced in their preparations for
a possible avian flu pandemic. Approximately
95% of companies with more than $5 billion
in sales either have an up-to-date prepared-
ness plan or are in the process of planning.
But 65% of companies with less than $100
million do not yet have any plans specifically
in place addressing the impact of an influenza
pandemic.
The GOOd…
mergers, Acquisitions to continue
According to recent surveys and discussions,
leading security industry experts and market
watchers expect mergers and acquisitions to
continue to boom, creating opportunities for
the physical and technology security markets.
The recent acquisition of Initial Security by
Allied Barton and the merger of Andrews
International and Copstat Security have fur-
ther fueled interest in increasing revenues and
growing market share through M&A. Results
OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG
4
According to The Conference Board report,
the most significant disadvantage in not
conducting formal pandemic preparedness
planning may be the virtually total absence of
coordination with the public sector. An over-
whelming 94% of participating companies
report that they have not discussed with any
level of government officials their organiza-
tions’ ability to provide essential services or
access to facilities, equipment or staff during
a pandemic.
In the event of a pandemic, companies are
most concerned about the health and welfare
of employees (98%), operational continuity
(96%) and their telecommuting capabilities to
enable employees to work from home (93%).
There doesn’t seem to be a strong consensus
on any specific criterion that would activate
an organization’s pandemic preparedness plan.
Close to one-third of the survey participants
95% 65%
The Bad…
OF COMPANIES WITH more
THAN $5 bILLIoN IN SALES
EITHER HAVE OR ARE IN THE
PROCESS OF PLANNING
of a recent ACG/Thomson survey indicate
that the main objectives of M&A is to increase
revenues and profitability (46%) and grow
market shares (35%). Other objectives include
new market entry, expanding geographic
reach, adding new services and obtaining
management strength.
Emphasis continues to focus on midsized and
niche companies, such as disabled-veteran
and 8-A firms serving the federal and state
report that they will activate their plan when
the World Health Organization (WHO)
declares Alert Level 4 (increased human-to-hu-
man transmission). Eighteen percent said that
© Photographer: vlad bryden | agency: Dreamstime.com
their plan will go into effect when a pandemic
situation is declared in a country where their
organization has an operating presence; while
15% simply don’t know.
The Conference Board survey and other
similar reports have not addressed business
concerns regarding security, especially the loss
of security due to officer illness and coordina-
tion between law enforcement, emergency
response and private security, the primary
elements of first-response. If you have case
studies, plans or information you would like
to share concerning your contract security
firm’s planning, coordination and communi-
cation for pandemic response, please e-mail
them to info@nasco.org. For more on avian
flu, see “Winging It” on page 12. n
OF COMPANIES WITH LeSS
THAN $100 mILLIoN DO NOT
HAVE ANY PLANS IN PLACE
BUSINESS FOCUS
markets. In addition to the largest company
participation in the M&A market, many
larger regional companies are looking to
expand their geographic reach and are seeking
acquisitions and mergers that provide new
market access. n
 Alliedbarton Joins corporate Partnership Program
PARTNERING UP

to Support IAcLeA, campus Public Safety

NASCO member AlliedBarton Security Services
has become a corporate partner of the Interna-
tional Association of Campus Law Enforcement
Administrators, Inc. (IACLEA), under a new
program developed to honor IACLEA’s 50 years
of service and to support initiatives to enhance
the ability of campus public safety to protect
higher education institutions in the future.
AlliedBarton is a Titanium Sponsor and, as
such, has pledged a significant donation to
support IACLEA’s 50th anniversary and future
initiatives. The goals of IACLEA’s corporate
partnership program are to highlight the growth
and importance of campus public safety and to
support initiatives to strengthen campus public
safety and expand its impact on higher educa-
tion and its service to stakeholders worldwide.
IACLEA will celebrate its 50th anniversary with
a series of events, beginning in Las Vegas in
2007 and culminating with its 50th Annual
Conference and celebration in Hartford, Conn.,
in 2008.
AlliedBarton Security Services, headquartered
in King of Prussia, Pa., is the largest American-
owned and managed security services firm in the
United States. Since 1957, AlliedBarton has pro-
vided quality security services and highly trained
personnel to clients in a number of industry
sectors, including commercial real estate, higher
education, healthcare, government, residential
communities, manufacturing and distribution,
financial institutions, shopping centers and
other commercial facilities.
IACLEA is an association that advances campus
public safety for its more than 1,000 educa-
tional institution members and 1,500 individual
professional members by providing educational
resources, advocacy and professional develop-
ment services. n

BUSINESS BEST

AreS International Security ranks No. 47

on 2006 Inc. 500 Fastest Growing companies
reprinted from Inc. Magazine, sept. 2006

Inc. magazine recently announced its 25th annual
Inc. 500 ranking of the fastest-growing private
companies in the country. Government security
services company ARES International Security
ranks No. 47 on the list, with three-year growth of
1,198%. ARES is the only contract security com-
pany recognized in the Inc. 500 Fastest Growing
Companies list for 2006.
The 2006 Inc. 500, published in the September
issue, reports the most robust bunch of companies
the magazine has ever compiled, with aggregate
revenue of $19.7 billion, up from $16.5 billion
last year and $12.9 billion in 2000. ARES’ 2005
annual revenues of $25.9 ranked it as 47th on the
list of 500 companies across the nation.
The 2006 Inc. 500 list measures revenue growth
from 2002 through 2005. To qualify, companies
had to be U.S.-based, privately held independent
(not subsidiaries or divisions of other companies)
as of Dec. 31, 2005, and have at least $600,000
in net sales in the base year.
ARES is a SBA 8(a) certified service disabled,
veteran-owned, small disadvantaged, Ameri-
can-owned firm that specializes in providing
armed/unarmed security officers, canine explo-
sive detection, classified couriers and technical
security services to the federal government. It
employs more than 950 security professionals
in seven U.S. states and internationally. n

Inc. Magazine’s top 50…

1 Litle & Co. 7 Method Products 13 NetShops 20 Visionary 27 C&B Services 33 Sirius Solutions 40 Merlin Technical 45 Group9
2 Airborne Health 8 StubHub 14 PatchLink Solutions 28 Resurgence 34 The Insitu Group Solutions 46 Everything
3 Digital Lifestyle 9 Ancillary Care 15 Global 21 The Macaluso Financial 35 OneWayFurniture. 41 Speck Products Furniture
Outfitters Management Performance Group 29 Interactive com 42 Kurtzman Carson 47 AreS
4 Edible 10 MemberHealth 16 Bandwidth.com 22 OpenPages Technology 36 TIC Properties Consultants INTerNATIoNAL
Arrangements 23 Booyah Networks Solutions 43 NightHawk SecUrITY
11 Advanced 17 Mercer Staffing 37 VeriStor Systems
International Equities Financial 24 LanceSoft 30 Clear Capital Radiology 48 Study Island
18 Immediate-Care 38 Wendel Energy Services
5 SUNRx 12 Silver State 25 Video Gaming 31 Advanced Services 49 The Experts
19 Evolve Planning Services 44 Bell-Corley
6 United Bank Card Helicopters Manufacturing Technologies 39 DataSynapse 50 Attic Technologies
32 Valley Healthcare Construction
Technologies 26 WageWorks
Systems

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

5
 In the news

UNION PRIORITIES

FROM THE HILL

bush Signs Defense
Union Takes Issue with Fitness
rules for Nuclear Plant Guards
Authorization
On Oct. 17, President Bush signed into law an extension
Two years ago, the Energy Department announced plans for creating “a special elite
of the temporary authority for contractor performance of
federal force” to protect high-priority nuclear plants. After 18 months of study, it
security guard functions as part of the larger $532.8 billion
implemented a policy that created combat teams to protect against and engage poten-
defense appropriations bill.
tial terrorists or other adversaries outside a nuclear weapons plant rather than waiting
for attackers to penetrate the gates.
The bill amends Section 332(c) of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003,
These elite combat units currently work for companies that operate Energy Depart-
extending authorization for contracting guard services at
ment plants or security contractors, such as NASCO member Wackenhut, that provide
military installations through Sept. 30, 2009. However,
guards and security officers.
the law begins phasing out contract security by limit-
ing the total number of personnel employed to perform
The demands of these positions protect the United States’ critical infrastructure,
security guard functions, effectively reducing the contract
including Energy Department plants and facilities that use nuclear weapons mate-
security force by 10% each year.
rial such as plutonium and highly enriched uranium. These facilities are expanding
the number of security jobs covered by rigorous physical fitness standards critical to
In addition, the law requires the secretary of defense to
improving security.
submit by Feb. 1, 2007, a report on contractor perfor-
mance of security guard functions to the Committee on
A department official said contractors should be able to reassign officers who do not
Armed Services of the Senate and the Committee on
meet the fitness standards for “offensive combative” positions into less demanding jobs.
Armed Services of the House of Representatives.
The Energy Department is not interested in exploring whether the officers should be
“federalized.”
The report will include the following:
• An explanation of progress made toward implement-
Bryan Wilkes, spokesman for the department’s National Nuclear Security Administra-
ing the seven recommendations in the comptroller
tion, said no compelling reason was found that justified converting the officers into
general’s report, “Contract Security Guards: Army’s
federal employees. “What we have is working great,” he says.
Guard Program Requires Greater Oversight and Reas-
sessment of Acquisition Approach” (GAO-06-284).
But the National Council of Security Police, a union group representing officers at
nuclear facilities, thinks the department’s plans will undercut the goal of enhanced
• An assessment, taking into consideration the comp-
security in the post-Sept. 11 world.
troller general’s observations on the Department of
Defense’s November 2005 report, “Department of
In the past, nuclear weapons plants have assigned officers to offensive and
Defense Installation Security Guard Requirement
defensive positions. The Energy Department’s policy shift is prompting
Assessment and Plan,” of the following:
plants to realign their security posture and convert more positions to the
offense, union officials said.
1. The cost-effectiveness of using contractors rather
than Department of Defense employees to per-
For the offensive positions, a security officer must run a mile in eight
form security-guard functions.
minutes and 30 seconds and complete a 40-yard dash in no more
than eight seconds. Defensive positions require a half-mile run in
2. The performance of contractors employed as
four minutes, 40 seconds, and a 40-yard dash in 8.5 seconds.
security guards compared with the performance
Union officials believe the physical fitness standards do not
of military personnel who have served as security
take into account a person’s age or sex, and that subsequently
guards.
hundreds of officers will not meet the standards for of-
fensive positions.
3. Specific results of on-site visits made by officials
designated by the secretary of defense to military
Most contractors believe many older officers and female
installations using contractors to perform secu-
officers “are fully capable” of meeting the physical standards and
rity-guard functions. n
jobs are being identified for officers who do not meet the fitness
standards. n

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

6
CHANGING FOCUS

Kroll Looks to Sell

Security Subsidiary,
Focus on consulting
and Training
Kroll, the risk consulting and technology division of
Marsh & McLennan Companies Inc., is seeking buy-
ers for its subsidiary, Kroll Security International, that
provides security services in Iraq and Afghanistan to
focus on consulting and training according to Simon
Freakley, Kroll chief executive.

Kroll Security International currently accredited sub-

contractors in Iraq and according to Freakley Kroll has
been “speaking to high-quality companies that do this
work and have expressed an interest in purchasing that
subsidiary and taking over the activities.”

The issue during insurance brokerage Marsh &

McLennan’s most recent earnings report that stated
Kroll planned to leave high-risk international assign-
ments that no longer fit its business strategy. Later
clarifying the statement was referencing operation and
security personnel in Iraq and Afghanistan.

During the past year, Kroll has acquired several

“successful, best-of-breed companies that provide a
competitive advantage and secure Kroll’s leadership in
key markets” said Freakley, including InfoLink Screen-
ing Services, Inc., a leading, privately-held back-
ground screening company now operating as Kroll’s
Background Screening West Coast office. Demands
for consulting and training continue to rise due to
new legislation and concerns about workplace security.
In addition to backgrounds, Kroll provides employee
background checks and related services such as drug
testing, Form I-9 employment eligibility verifications,
and pre-employment physical examinations.

Two KSI workers were killed in Iraq in January 2005.

Another Kroll employee died in December 2005, the
company said. After Kroll Security International is
transferred, Kroll security will focus on consulting
and training, with some security services provided for
corporate or individual clients. n

© 2006 The Associated Press

7
 nAsCo Update

MEMBER BENEFITS

BOARD REPORT
Martin Herman

NASco elects
board of Directors NASco Launches
NASCO recently concluded its board and general
Database of State
membership meetings in Alexandria, Va., electing
its board, approving its budget and operational
Licensing, Private Security
regulation
Heather o’brien

plan for 2007 and setting its legislative agenda (see

“Legislative Update” on page 20).

The states conduct the majority of private security service regulation, with
NASCO membership elected Martin Herman as
40 states requiring licensing of security companies and security officer reg-
chair for a two-year term. Herman is president of
istration. Conducting business in multiple states and maintaining compli-
Special Response Corporation, a national leader
ance requires frequent contact with each state’s regulatory office and visits
in providing highly specialized security services in
to their Web sites. The new NASCO State Private Security Licensing and
times of crisis or heightened vulnerability. Herman
Regulatory Database captures and reports, by state, more than 50 regula-
Jim mcnulty

has guided Special Response Corporation through

tory variables ranging from general licensing and registration requirements
more than 1,700 security-related deployments.
to background checks, number of hours of training, armed vs. unarmed,
He has formulated security contingency plans for
length of license, reciprocity and liability and insurance coverages. This
hundreds of Fortune 500 companies, small busi-
one-of-a-kind database is also searchable by each of these categories, pro-
nesses and public agencies facing crisis situations
viding companies with an excellent snapshot of the requirements for the
ranging from homeland security threats to natural
states they operate — or wish to operate — in.
and manmade disasters. An expert in crisis and
emergency security, Herman serves as serves a
The database is available to NASCO members at www.nasco.org. The
stephen kasloff

consultant on these topics.

database will help you:

In addition, the NASCO members elected:

1. Save time. Responsibilities for maintaining state regulatory informa-
• Vice Chair — Heather O’Brien, executive vice
tion will require fewer resources for your company to review and
president, Security Forces
maintain, allowing for more time committed to the business of
• 2nd Vice Chair—Jim McNulty, executive vice
contract security.
president, Securitas Security Services USA
• 3rd Vice Chair — Stephen Kasloff, vice presi-
2. Increase access to information. The Web-based tool is constantly up-
Lynn oliver

dent, Guardsmark
dated and available for multiple users from any Internet connection.
• Treasurer — Lynn Oliver, president, American
Security Programs
3. Reduce risk and simplify compliance. Quick reviews of state
• Secretary — Robert Kilbride, vice president
requirements are only a few clicks away and instant access to the ap-
and associate general counsel, The Wackenhut
plicable legal requirements by jurisdiction can reduce your risk of fines
Corporation
and potential civil damages.

© Photographer: alessandro bolis | agency: Dreamstime.com

• Member-at-Large — Dennis Roberts, chief
operating officer, SecTek
4. Simplify research. Query capabilities enable users to retrieve current
robert kilbride

statistics on private security licensing, registration, screening and train-

Each elected officer serves a two year term begin-
ing requirements for easy comparisons between states requirements. n
ning at the conclusion of NASCO’s Oct. 18
general membership meeting except the treasurer,
whose term ends Dec. 31, and the past chair,
Rick Massimei, special consultant at U.S. Secu-
rity Associates, which as a non-elected position. n
dennis roberts

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

8
 EVENT HIGHLIGHT

First NASco/FPS Working Group

Scheduled for Nov. 29
Senior security executives representing NASCO The NASCO FPS Working Group will work to
government security contractors will begin identify and validate security officer require-
working with Fred Muccino, Federal Protective ments, as well as develop training to sup-
Service (FPS) chief inspector for guard force port these requirements. Any NASCO
operations, to address FPS-related communica- member representatives interested
tions and initiatives such as contract and site in participating should contact
requirements, validation and training. Joseph Ricci at 703-518-1479;
jricci@nasco.org. n
The Department of Homeland Security’s FPS
employs more than 14,000 contract security
officers and provides law enforcement and
security services to more than 1 million tenants
and daily visitors to federally owned and leased
facilities nationwide. FPS’ protection services
require close coordination and intelligence
sharing with the investigative functions within
DHS, which is itself relying more on private
security’s assistance.

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is faced with a crisis,
whether man-made or natural;
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OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

9
 ASIS INTERNATIONAL 2006

The securiTy
NASCO Contract Security
indusTry [should]
Breakfast Attracts Nearly 100
“do more” To Senior Contract Security Leaders
N
professionaliZe
early 100 contract security leaders attended the
NASCO Contract Security Breakfast, held during
privaTe securiTy,
the recent ASIS Annual Seminar in San Diego, to honor
long-time private security leader Don Walker, chairman of
including Securitas Security Services, and listen to insight from Paul
Johnson, California’s chief of the Bureau of Security and
Investigative Service. ASIS International President Jeff Spivey,
improving accompanied by ASIS International Executive Director
Michael Stack, welcomed NASCO’s guests.
securiTy officers’
Walker was presented with the prestigious Colonel Edgar B.
Watson Award for his contributions to private security and
wages and tireless efforts to raise the standards for contract security.
Upon receipt of the honor, Walker called for the security
industry “to do more” to professionalize private security,
benefiTs.
including improving security officers’ wages and benefits.
“We’ve only started to raise the standards; we have a long way
to go,” Walker said.
Johnson discussed his state’s initiatives to assist private secu-
rity in raising standards through licensing, training and com-
pliance. He outlined his efforts during the past few months to
increase the importance of — and need for—qualified private
security personnel nationwide. “Because private security
protects nearly 90% of the nation’s critical infrastructure,”
Johnson said, “industry standards need to be put in place
immediately.”
Walker and Johnson’s statements further reinforce NASCO’s
mission and efforts to promote higher standards and sustain
professional integrity and competence throughout every
aspect of private security business. n

10
 JoSePH rIccI, cAe
Ricci is executive director of the
National Association for Security
Companies (NASCO).

NASco chair michael Goodboe presents the NASCO Colonel

Incoming NASco vice President Martin Herman presents
Edgar B. Watson Award to Don Walker, chairman of Securitas
outgoing NASCO Chair Michael Goodboe, Ph.D., with a plaque for
Security Services, USA, for his superior leadership and commitment
his outstanding leadership and direction.
to raising private security standards.

don’t miss nasco at asis international 2007

Plan noW to be in las VeGas sePtember 24-27, 2007
PHotos by cHoIcE PHotoGraPHy

ASIS International President Jeff Spivey welcomes NASCO

Don Walker accepts the NASCO Colonel Edgar B. Watson Award Private Security Breakfast attendees to the ASIS Annual Seminar and
with wife Mary and daughter Kathryn. Exhibits in San Diego.

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

11
FEATURED ARTICLE :: WINGING IT
IS ThE AVIAN FlU ThE NEXT PANDEMIC?
WINGING
IS YOUR BUSINESS PREPARED?
T
hroughout history, every generation
has faced a flu pandemic of
some sort. These pandemics are a natural
phenomenon and will undoubtedly continue in
the future. With 39 years as the longest interval
between pandemics and the current interval
at 38, flu experts warn that an upcoming
epidemic is a ticking time bomb.
Concerns have focused on the H5N1 avian
flu, a strain identified as containing pandemic
potential since it may ultimately mutate into a
strain that is highly contagious among humans.
While some argue that the bird flu threat
is merely being sensationalized through the
media, historical perspective and the deadly
affect of the avian flu strain on humans who
contract the virus indicate that every facet
of the world should plan and prepare for the
very real threat of an upcoming human flu
pandemic.
According to the U.S. government, a disease
pandemic could have a greater impact on a
country than a terrorist attack or a natural
disaster and could even be comparable in scope
to a war. Predictions by the World Health
Organization (WHO) back this warning,
indicating that a severe flu pandemic could
kill 70 million people worldwide. Such a
devastating pandemic could contract the world
economy by 3.1%, leading to global economic
losses of US$2 trillion.
In recent months, millions of chickens in
infected countries have been culled in an
1
IT
attempt to eradicate the spread of the
bird flu virus. Despite these efforts, the
virus has been credited with 151 human
deaths since 2003, a toll that is steadily
rising. Bird flu, the origins of which
began in East Asia, has now spread
deep into Africa, Europe and Asia, and
low-pathogenic forms were reported in
the Americas in the fall of 2006. Further
complicating matters, most nations
remain ill-prepared to respond to an
epidemic of this sort, despite dozens
of warnings from international health
experts.
D E A D Ly T H R E AT
Avian influenza, commonly known as the H5N1 strain of flu in humans reported
“bird flu,” is a contagious viral disease that in 10 countries, 151 of which were fatal. The
is normally relegated to birds and, to a lesser mortality rate thus far has been approximately
degree, pigs. Domestic poultry such as chickens 59%. To put this into perspective, the recent
and turkeys are particularly susceptible to Severe Acute Respiratory Syndrome (SARS)
avian influenza viruses. The virus causes a wide outbreak in Southeast Asia had a mortality rate
variety of symptoms, including a sore throat, of less than 10%, yet still caused widespread
cough, fever, pneumonia, respiratory distress panic. In further comparison, the WHO fears
or respiratory failure and can result in death. that an avian flu pandemic could cost up to
There are about 15 different types of bird flu, US$2 trillion dollars and infect 70 million
the most contagious of which include variants people; SARS cost the economies of the
of the H5 and H7 strains. The current strain Asia Pacific US$40 billion and infected only
causing the most concern is the deadly H5N1 8,000 people. The economic damage to Asian
variety, which was discovered among wild birds economies alone due to outbreaks of the avian
in South Africa in 1961. flu last year was estimated at US$8 billion to
US$12 billion.
While the number of human infections from
the disease has remained relatively low, health Perhaps most alarming about the current
officials are particularly concerned about the pandemic threat will be the little-to-no notice
high fatality rate. Between late 2003 and received around the world if the virus does
mid-October 2006, there were 256 cases of mutate to an easily transmittable human-to-
did you KnoW?

bird flu, The origins of which

began in easT asia, has now
spread deep inTo africa, europe
and asia and is eXpecTed To
hiT The americas in The near
fuTure. The virus causes a wide
varieTy of sympToms…and can
resulT in deaTh.

13
FEATURED ARTICLE :: WINGING IT
human form. The 1918 to 1919 flu pandemic spread rapidly around the
world in an age where global transportation was primarily by steam ship.
In today’s world of airplanes and high-speed continental transit, it is highly
likely that once the virus makes the jump to humans, it will appear around
the world nearly simultaneously.
The response Scientists have noticed striking
similarities between a pandemic
of world likely to result from the H5N1 strain
of avian flu and the 1918 to1919
governments
Spanish Flu pandemic. A number
to the threat of experts believe that the Spanish
Flu’s origin may be the same region
of the bird of China as the H5N1. Further, the
flu virus has Spanish Flu was an avian flu that
adapted to humans, precisely what
varied widely health officials fear with H5N1.
Scientific predictions, based partly on
the 1918 to 1919 pandemic, estimate that 100% of the world’s population is
likely to be exposed to an upcoming pandemic, 30% of which will contract
the flu.
In addition to its origins, the H5N1 strain of avian flu appears similar to the
1918 to 1919 outbreak in its target victims. The Spanish Flu experienced
a particularly high fatality rate in individuals aged 18 to 30; thus far, such
has also been the case with H5N1 avian flu. A study released by the WHO
revealed that younger females are the most likely to become victims of
the H5N1 avian flu. The highest proportion of infections since the latest
outbreak began in 2003 has occurred in those between ages 10 and 29, and
the majority of those infected were females. Out of all reported cases thus
far, 90% have infected people under the age of 40. While the overall fatality
rate has been 59% since the December 2003 case in Vietnam, infections in
individuals between ages 10 and 29 have resulted in an approximately 73%
fatality rate.
Public health experts and scientists are increasingly concerned that the H5N1
virus may evolve through mutation or re-assortment and eventually spread
from human to human. Officials were extremely alarmed after a cluster of
bird flu cases in the North Sumatran village of Kubu Sembeland, Indonesia,
appeared to be contracted via human-to-human transmission. Seven out of
the eight family members eventually died of the virus. However, the WHO
later concluded that thus far, only limited transmission between extremely
ill humans has taken place. The organization’s pandemic alert level has
remained at 3, meaning there has been “no or very limited human-to-human
transmission” of the virus.
A ffected C o u n trie s
Outbreaks of the H5N1 strain of avian influenza have been reported in
the following countries since 2003 (human cases have been confirmed in
countries are denoted with a “*”): Afghanistan, Albania, Austria, Azerbaijan*,
Bosnia & Herzegovina, Bulgaria, Burkina Faso, Cambodia*, Cameroon,
China*, Croatia, Cyprus, Czech Republic, Denmark, Djibouti*, Egypt*,
France, Georgia, Germany, Greece, Hungary, India, Indonesia*, Iran, Iraq*,
Israel/PNA, Italy, Ivory Coast, Japan, Jordan, Kazakhstan, Kuwait, Laos,
Malaysia, Mongolia, Myanmar (Burma), Niger, Nigeria, Pakistan, Poland,
Romania, Russia, Serbia, Slovakia, Slovenia, South Korea, Spain, Sudan,
OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG
14
Sweden, Switzerland, Thailand*, Turkey*, Ukraine, United Kingdom and
Vietnam*.
G l o b al R e s p o n s e
In May 2005, the 192 members of the WHO approved measures that would
give the agency greater power to combat health threats and disease outbreaks.
The necessity of heightened powers for the WHO became all the more
apparent after the 2003 SARS outbreak in China. Under the new regulations,
member countries are required to report any outbreak that could pose a
health concern internationally to the WHO.
In addition, the WHO now has the authority to issue recommendations
regarding travel restriction, including airport checks and quarantine measures.
The response of world governments to the threat of the bird flu virus has
varied widely based on a number of factors including resources, funding
and perceived threat. In Southeast Asia, a region that has thus far been hit
the hardest by the avian flu virus, the disparity between the preparedness of
relatively wealthy and poor nations for a possible pandemic is acutely evident.
While countries such as Australia and Singapore are assembling anti-viral
drugs and developing inclusive pandemic plans, traditionally poorer countries
such as Thailand and Indonesia have struggled to contain outbreaks. Scarce
resources, traditionally close interaction between animals and humans
and poor surveillance mechanisms to monitor the spread of viruses are all
contributing factors that keep the risk of infection high in Southeast Asia.
Health officials are concerned that centuries-old farming practices mixed
with generally poor health conditions have fostered an environment where
the spread of virulent diseases would pose especially dire consequences for a
region in which many people live on less than a dollar a day.
World health experts are particularly worried about the bird flu’s affect on
Indonesia, the most populated Southeast Asian country in terms of both
people and poultry. With an already fragile health care system, a growing
population and close contact between animals and humans, the country faces
the potential for enormous economic damage and human casualties from
a bird flu pandemic. While most other Southeast Asian nations have been
able to contain outbreaks, human infections continue to rise in Indonesia,
which recently surpassed Vietnam with the highest human death toll from
the avian flu in the world. The U.N.’s Food and Agriculture Organization
has warned that the virus is rampant among Indonesia’s billions of backyard
chickens. Slaughtering is rarely carried out following outbreaks, vaccination
is spotty at best and surveillance is weak. Local politicians are often hesitant
to implement bird flu policies due to the heavy economic dependence on
chickens in small towns and villages. Based on the prior human-to-human
transmission case in the country and Jakarta’s seemingly inability to combat
the disease, health experts warn that a human pandemic could very well begin
in Indonesia.
Analysts are also apprehensive about bird flu outbreaks in China, a nation of
about 1.3 billion people whose government has traditionally held a tight lid
on its media. China’s vast geographical boundaries, large-pockets of poverty,
incompetent medical facilities and colossal bureaucracy have many concerned
that news of a viral outbreak affecting humans would be released too late,
long after the outbreak started. Such concerns were heightened after it was
discovered that the country’s initial human case of H5N1 flu actually took
place in November 2003, two years prior to the first case the government
 reported to the WHO. Further, a Chinese farmer known as the first “bird
flu whistleblower” was imprisoned two months after he reported suspected
cases of avian flu in Tianchang City, Anhui Province, to the Ministry of
Agriculture in October 2005. While local government officials said that he
was complicit with an extortion case that took place two years earlier, many
residents suspect he was imprisoned because the local government wanted
to “settle scores” with him for reporting the avian flu. His arrest could lead
to extreme hesitation by locals to report future cases.
While Asia remains a central focus of concern, even highly developed
countries have yet to adequately prepare for an avian flu pandemic. In the
United States, the head of the U.S. Agency for International Development
described the threat of the H5N1 virus as “the biggest single challenge
facing the organization” and recently declared the virus its No. 1 priority.
However, a federal audit criticized the Bush administration’s preparations
for an avian flu pandemic, saying that the U.S. Department of Agriculture
lacks a comprehensive plan for testing and monitoring bird flu in
commercial poultry. A U.S. government analysis concluded that most
American cities and states remain woefully unprepared for any type of a
catastrophe—a serious concern since much of the federal government’s
plan to combat a pandemic relies on state and local governments.
countries affected by bird flu
Illustration by Jacki Silvan
cases confirmed in humans
OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG
Worldwide, a report from the World Bank harshly criticized the response
to the threat of an avian flu pandemic. Although international donors
pledged US$1.9 billion to assist countries in their fight against the virus at
a donor’s conference in Beijing in January 2006, as of July, only US$331
million of the funds had been handed over.
While some of the more wealthy countries have purchased treatments and
stockpiled anti-viral vaccines to combat an outbreak of the avian virus, the
poorer countries where a pandemic is most likely to occur have struggled
to prepare for an outbreak. Experts note that this trend is particularly
dangerous because wealthy countries have thus far focused efforts on
protecting their home interests first, rather than attacking the virus at the
source countries. The amount of resources allocated to virus protection
varies greatly from country to country. Indonesia currently has a 10,000
course supply of Tamiflu (made by Swiss-based Roche pharmaceuticals) for
a nation of 220 million. Comparatively, the nearby island state of Singapore
is amassing a supply of 350,000 doses for its 4.2 million citizens. Should
a pandemic occur, it is likely that considerable portions of the world will
not have the volume of antibiotics or antivirals available to meet the need,
greatly increasing the fatality rate.
reported cases
15
FEATURED ARTICLE :: WINGING IT
Create a Pandemic Preparedness Plan
The WHO has urged companies to prepare for possible disrup-
tions in business as the result of a human pandemic. While the
breadth and scope of a contingency plan will vary according
to the nature and size of the company, businesses can employ
some of the following recommendations:
n Establish a crisis management team (CMT) that will
take responsibility for developing a pandemic preparedness
plan and assume responsibility for critical business decisions
if a pandemic occurs. Designate a manager to take charge
and distribute emergency information
n Determine what circumstances will trigger your cor-
porate response plans.
n Establish a budget to create a CMT and to prepare
for concerns during a pandemic, including a sharp drop in
income.
n Review or develop employee health procedures
to minimize the potential for transmission of infectious dis-
ease to other workers, including washing hands and sanitiz-
ing work areas.
n Review human resource policies for leave, travel,
working remotely, quarantine and insurance coverage.
n Review the supply chain for your business to under-
stand where and how it might be vulnerable during a pan-
demic; keep in mind that supplies by outside companies may
be disrupted.
n Identify what services can be handled remotely.
n Test operational contingency plans regularly.
Consider running exercises using various outbreak scenarios
to test your plan’s effectiveness.
n Regularly contact governments, international
agencies and industry groups about the availability of guid-
ance that could benefit your company or staff.
OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG
16
U.N. officials concede that part of the difficulty in preparing for a pandemic is
that it is nearly impossible to predict where the virus may emerge next, as well
as how the virus may mutate to become easily transmittable between humans.
According to a WHO bird flu expert in Southeast Asia, a clear strategy to
confront the avian flu virus has yet to be implemented. While well-developed
countries have placed orders for anti-viral drugs, which boost the immune
system, these drugs may have little impact against new strains of the flu. As a
result of this uncertainty, governments are struggling to implement contingency
plans and assign tasks to different agencies.
C o n ti n ge n c y Pla n s f o r Bu s i n e s s e s
Just as governments have scrambled to plan for a possible global pandemic,
recent data indicates that some companies are moving to incorporate
contingency procedures for a bird flu pandemic as well. The quality and
operability of such plans varies tremendously, not surprising considering the
variety of companies planning for such an event. According to a recent poll
by a major U.S. consulting firm, almost 70% of organizations surveyed in 38
countries worldwide responded that a pandemic will have a negative impact
on profits. However, only 47% of respondents have established a business
continuity plan and only 17% have allocated a budget to deal with pandemic
preparedness.
Some companies have modified detailed business continuity plans developed
during the SARS outbreak to apply to the avian flu virus. These plans cover
how to monitor staff, where and how workers could seek medical treatment
and establish a viable way to work from a remote location to limit person-
to-person contact. Many businesses are reviewing hygiene requirements
concerning the general office environment, air-conditioning systems,
ventilation and employee cleanliness. Communication in the event of a
pandemic is also a major concern as electricity and telephone lines could
potentially be unavailable.
Pandemic planning presents a serious challenge for many businesses as it
requires that companies anticipate “waves” of infections that last for two or
three months, often times followed by a repetition of infections months later.
A flu pandemic could easily impact up to two-thirds of the workforce while
business operations continue in an elevated risk environment. The likelihood
of significant shortages of essential goods and the cessation of essential services
will increase directly with the severity of the pandemic as outside delivery
companies lose staff as well. Security risks to facilities thought to contain
essential items will increase exponentially at the very time those facilities are
least capable of maintaining security due to a lack of personnel as panicked
populations seek to acquire the supplies. As pandemics by nature typically
affect entire regions or countries, companies should anticipate that outside
assistance will likely be much slower than during normal operations. SE
This article was prepared by Corporate Risk International’s (CRI) Worldwide Advisory
Intelligence Service (WAIS). CRI is a full service security consulting group headquarterd in
Reston, Va (www.corprisk.com).
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OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

17
 FEATURED ARTICLE :: SUBCONTRACTING
XXXXXX

A Fertile
Environment for
Subcontracting
As the practice takes hold of the industry,
take care to avoid insurance snafus.
By Mike Lehner
Photographer: Franz Pfluegl | Agency: Dreamstime.com

18
A
s contract security firms continue to consolidate, forming
super-regional and national agencies, a movement of small
privately owned firms has emerged to fill in local relationships.
In order to compete with the super-regional or national security firms,
many small security operators have adopted a business practice of subcon-
tracting to other small firms throughout the country. Interestingly, super-
regionals and national firms are also sometimes required to give small busi-
nesses or minority-owned security firms a small part of a national contract.
Regardless of business size, subcontracting for any reason is a contractual
relationship that should be done with care, planning and proper risk
management.
To protect your business when subcontracting, a few simple rules may help
you avoid, reduce and deter unwanted litigation:
1 . C ertificate o f I n s ura n ce M a n ageme n t .
Obtain a certificate of insurance from your subcontractor that names you
and your client as additional insureds on the general liability and auto li-
ability insurance plans of your subcontractor.
Defense coverage is the primary motive in your request or demand for
additional insured status under your subcontractor’s general liability or auto
liability policy. Far too often the prime contractor only gets a certificate
of insurance in favor of his company, leaving the client relationship open
to liability and exposure. Be sure to include your client when asking for a
certificate of insurance.
2 . W ai v er s o f Su b r o gati o n R e q ue s t .
Request a waiver of subrogation from your subcontractor in favor of both
your company and your client. Waiver of subrogation should be requested
for both your sub’s workers’ compensation and general liability insurance
plans. An additional way to protect the interests of both you and your
client from subrogation is to include a waiver of subrogation provision in
your subcontract agreement. Just as the insurer has the legal right to pursue
subrogation, so too does a party to a commercial transaction have the right
to structure it in order to prevent a specific insurer from subrogating against
another of the parties. Some states do not allow subrogation regardless of
contract terms.
3 . C rime a n d F idelit y R e q ue s t .
In case your subcontractor’s employee steals from your client, require a fi-
delity bond that delivers some protection to get your client repaid promptly.
The key: make sure coverage includes third-party crime and no arrest or
conviction clause applies.
4 . U m b rella R e q ue s t .
If your client asks you for an excess or umbrella limit, it is critical that any
subcontractor that works for you carries equal excess limits of protection
5 . Su b c o n tracti n g A greeme n t .
Establish a standard subcontracting agreement for use with all subcontrac-
tors. The agreement should include an indemnity/hold harmless provision
in favor of both you and your client.
Finally, coordinate a procedure with your insurance broker to collect and
follow up on all subcontractor certificates of insurance. In most states, any
subcontractor that doesn’t provide a workers’ compensation insurance certif-
icate is a subcontractor that you are paying workers’ compensation benefits
for in the event a subcontract employee is injured. Your workers’ compensa-
tion insurance carrier will audit your uninsured subcontract expense and
charge it as payroll. SE
Mike Lehner is principal of the Large Lines Division of The Mechanic Group.
LEGAL DISCLAIMER
The information contained in this article is for general guidance on matters of interest only.
The application and impact of laws can vary widely based on the specific facts involved.
Given the changing nature of laws, rules and regulations, and the inherent hazards of
subcontracting, there may be omissions or inaccuracies in information contained herein.
Accordingly, the information in this article is provided with the understanding that the
authors and publishers are not herein engaged in rendering insurance, legal, accounting, tax
or other professional advice and services. As such, it should not be used as a substitute for
consultation with your trusted insurance advisor. Before making any decision or taking any
action, you should consult with your trusted insurance advisor.
While we have made every attempt to ensure that the information contained in this article
has been obtained from reliable sources, The Mechanic Group is not responsible for
any errors or omissions, or for the results obtained from the use of this information. All
information in this article is provided “as is” with no guarantee of completeness, accuracy,
timeliness or of the results obtained from the use of this information, and without warranty
of any kind, express or implied, including, but not limited to warranties of performance,
merchantability and fitness for a particular purpose. In no event will The Mechanic Group,
its related partnerships or corporations, or the partners, agents or employees thereof be li-
able to you or anyone else for any decision made or action taken in reliance on the informa-
tion in this article or for any consequential, special or similar damages, even if advised of
the possibility of such damages.
19
 Legislative Update

S U M M A R Y A N D W H AT I T M E A N S TO N A S C O M E M B E R S NASCO’S VIEW B I L L STAT U S

Provision of bill pertinent to private security services changes the Proprietary Security Services
Approved by
CA S.B. 1849

Act and the Private Security Services Act to allow a registered proprietary private security officer
to request review by disciplinary committee and to contest an adverse action. The bill itself covers governor on
numerous other regulated entities in non-security categories. Sept. 29, 2006.
SuppoRtive

Clarifies that unlicensed security or investigative companies are subject to licensing requirements and
Signed by
to the penalties described in 24 Del. C. Section 1303(b). This bill enables law enforcement to enforce
DE S.B. 373

regulatory statutes. Further, the bill enables the board to discipline a licensee when that licensee has governor on
consumed or been impaired by alcohol or a controlled substance while on duty. July 6, 2006.
SuppoRtive
Amends current licensing law for security regulation in Washington, D.C. Sets training requirements
and calls for a security officer registry. Requires companies to pay fees for security officer applicants.
Creates an advisory council with power to make recommendations to mayor. The council is com- Enacted July 25,
posed of four security managers, three security officers, one property owner or manager, two union 2006. Projected
DC B16-102

representatives and one college instructor expert on security issues. Effective date to be delayed for D.C. law date is
training and examination provisions. According to note added at second reading, funding for pro- Feb. 23, 2007.
posed FY 2007 budget will not be sufficient to cover implementation costs for all program changes in
bill. Fiscal note says metro police will need $591,000 to fund first year. SuppoRtive
supportive of required training and security officer registry. raised concerns over several
other provisions, especially employer-paid fees and advisory council composition.

Part of compromise package reached between Gov. Corzine and legislature after government shut
down in early July 2006 over budget issues. Increased current sales and use tax from 6% to 7% on Approved P.L.2006,
NJ A.B. 4901

July 15, 2006; expanded base of sales and use tax on October 1, 2006 to include investigative and c.44 July 8, 2006.
security taxes.
NOT
SUPPORTIVE
nasco has retained nJ counsel to help in effort to repeal sales tax on security services. initial
meetings with nJ’s leadership have begun. coalition against security Tax (casT) is forming now.

Bill authorizes appropriations for FY 2007 for military activities of the Department of Defense, pre-
scribes military personnel strengths for FY 2007, with additional issues addressed. Sec. 333 of confer-
ence committee’s report extends authority for contractor performance of security guard functions to
Signed by president
US H.R. 5122

Sept. 30, 2009. Ten percent cut from Oct. 1, 2006’s number of contract security guard personnel for
on Oct. 17, 2006.
FY 2008, and additional 10% reduction for FY 2009. Secretary of defense to report to House and
Senate Armed Services Committees on contractor performance of security guard functions by Feb. 1,
2007.
Strongly
Supports
Referred to the
Private Security Officer Employment Enhancement Act of 2006 would amend “Intelligence Reform House Education
and Terrorism Prevention Act of 2004” to authorize secretary of homeland security to process & Workforce
criminal records checks through FBI’s database for “covered employees” of “covered employers” who Committee’s
US H.R. 5893

provide security services or certain proprietary security employers. Request would be made through Subcommittee
DHS, and report would be provided to employer under tight restrictions as to use and handling of on Employer-
information. Employee Relations
SuppoRtive on Sept. 28, 2006.

supportive of legislation to provide private security companies timely access to criminal

background checks on private security officers.

All information is accurate as of press time.

OCTOBER/NOVEMBER 2006 • SECURITYEXECUTIVE.ORG

0
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nowhere vs. everywhere

                
    
   
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