ADT Security Services: Spread Far and Thin

By Joshua Weinberger Print this article Print

Government customers still like ADT Security Services. But its accounting missteps have plagued its credibility.

Gobble up everything in sight, and you may get indigestion. Parent company Tyco International was already collecting security firms when it bought ADT in 1998—and then went right on munching.

Tyco's accounting during the growth spurt has been the subject of close scrutiny, and ADT was the source of substantial mistakes. Tyco recently took more than $600 million in charges for the way it amortized ADT customer contracts and handled a dealer program "connect fee." Still, despite the distraction, ADT has kept busy—and apparently in the government's good graces.

The U.S. Marshals Service, for example, has been an ADT customer since before Tyco bought it, hiring ADT to design security systems for judges' chambers and detention areas, in bankruptcy courts, military courts, and tax courts. ADT just completed one such project, for $3 million, and has embarked on a similar $2.5 million effort in Seattle.

John Kraus, the Marshals Service's chief of judicial contracts, says bidding for federal gigs used to be a lot more competitive. Now, the industry has consolidated, with General Electric, for instance, buying Interlogic and Tyco itself picking up ADT, SecurityLink and Sensormatic. "There aren't too many choices anymore," Kraus says, "All those other companies disappeared."

The one-time American District Telegraph Co. is the largest security player left, and has locked up contracts to lock down a wide variety of public facilities, including some of the nation's most critical ports.

But consolidation isn't necessarily good news for customers. The director of loss prevention for one nationwide franchisor says that "deliverables are something [ADT] cannot provide. Their entire invoicing and accounting services are in disarray. Every time they buy another company it intensifies the continuing chaos they already have.

"We'd like to pay our bills," this executive says. "We're just waiting for [ADT] to get them [to us] correct."

It's not all so bleak. The situation has improved at Darden Restaurants, says VP of Corporate Security Kenneth Grover. "When I first got here, if I could've gotten rid of them, I would have," Grover says. "But they've done a very good job for us," thanks in part to the addition of an ADT staffer at Darden headquarters.

And being the big kid on the block has its advantages. Lt. Glenn S. Awong, of the U.S. Virgin Islands Police Dept., says ADT's size helped it trump a local incumbent on the department's surveillance system. "We'd been looking at other equipment," he says. "[ADT] made some recommendations and we got some better bang for our buck." ADT's quote even came in about $5,000 lower.

John Kraus agrees about the benefits of size. "ADT's able to meet our service requirements," he says. "You can't get a mom-and-pop shop to do something like this nationwide."

ADT Security Services
One Town Center Road, Boca Raton, FL 33431-0835
(561) 988-3600 www.adt.com

Ticker: TYC (parent company)
Exchange: NYSE
Eployees: 21,600

Michael F. Snyder
In his current post since 1997, he's spent 25 years with ADT, during which he held senior positions in sales and marketing.

Paul Brisgone
VP, Federal Systems Division
With ADT since 1973, he oversees the implementation of all federal security projects.

Jamie Rosand
VP, Commercial Sales & Mktg.
Handles the Small Business and Core Commercial divisions. Has a degree in International Business and Japanese.

Products & Services
Perimeter security, fire protection, access control, alarm monitoring, video surveillance, and intrusion detection.

Reference Checks

John Kraus
Chief, Judicial Security Contracts
(202) 307-5080
Project: ADT won a third five-year contract to install and maintain integrated security for all federal courthouses—connecting the U.S. Attorney's Office, General Service Administration and Federal Protective Services.

Darden Restaurants
Dr. Kenneth Grover
VP, Corporate Security
(407) 245-4533
Project: The parent company of chains Red Lobster and Olive Garden utilizes ADT for fire protection and security in almost all of its 1200-plus restaurants.

Port of Oakland
Jill Bornor-Brown
Port Supervising Electrical & Mechanical Engineer
(510) 272-1100
Project: In addition to providing security systems at both maritime and air ports, ADT is scheduled to complete work in September on a separate $4.75 million deal for a wireless deployment at the nation's fourth-busiest container port.

Washington Metropolitan Area Transit Authority
David Couch
Director, Infrastructure Renewal Grp.
(202) 962-1402
Project: D.C. mass-transit organization is halfway through a two-year, $10 million contract with ADT to upgrade and modernize the fire and intrusion-detection systems in its 50 underground stations.

U.S. Virgin Islands Police Dept.
Lt. Glenn S. Awong
Special Assistant to the Police Commissioner
(340) 778-2211 x4518
Project: The U.S. protectorate chose ADT to provide dozens of surveillance cameras across its three islands, using the network of coverage for security monitoring as well as for video-evidence documentation and collection.

The executives listed here are all customers of ADT Security. Their willingness to talk has been confirmed by Baseline.

This article was originally published on 2003-09-10
Assistant Editor
After being on staff at The New Yorker for five years, Josh later traveled the world, hitting all seven continents in a single year. At Yale University, he majored in American Studies, English, and Theatre Studies.

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