To protect their radio communications from being intercepted by
the enemy, the military services equip their devices with expensive
encryption systems. The most secure form of encryption is called
“Type 1,” and has been certified by the National Security
Agency. But the cost of Type 1 encryption—which can add $4,000
to $5,000 to the price of each radio—is frustrating some industry
executives who believe that the military is overpaying for radios
because there is such limited supply of Type 1 encryption engines.
Only two vendors have been certified by NSA as authorized suppliers
of Type 1 encryption for military radios. That is hardly a competitive
marketplace, laments Larry J. Williams, director of business development
at ITT Industries. “It’s very difficult to get products
certified, and they manage to keep prices extremely high, if they
will sell to you at all.” The government could save millions
of dollars if they had real competition in the marketplace, he adds.