Having spent $672 million so far with little to show for it, Washington has ordered a reassessment of the whole idea. The outlook became gloomier this week when President Barack Obama proposed cutting $189 million from the venture.
Ultimately, the project could be scaled back dramatically, with the government installing virtual fences along a few segments of the nation's 2,000-mile southern boundary but dropping plans for any further expansion, officials said.
"The worst that happens is that we have a system which gives us some value but we conclude that it's not worth buying any more of it," said Mark Borkowski, the government's director of the project at U.S. Customs and Border Protection.
60 Minutes: Watching the Border - The Virtual Fence
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Web Extra: The Virtual Fence
The first permanent segment of virtual fence - a 23-mile stretch near Sasabe, Ariz. - was supposed to be turned over to the Border Patrol by the main contractor, Boeing Co., for testing in January, but the handover has been delayed by problems involving the video recording equipment.
The Bush administration launched the project in 2005 to help secure the border against illegal immigrants, drug smugglers and other intruders. It was conceived as another layer of protection, in addition to thousands of Border Patrol agents and 650 miles of real fences.
The system was supposed to let a small number of dispatchers watch the border on a computer monitor, zoom in with cameras to see people crossing, and decide whether to send Border Patrol agents to the scene. Although there are sensors, cameras and radar at many points along the border, they are not connected to cover large expanses.
Originally, the virtual fence was supposed to be completed by 2011; that date has slipped to 2014, largely because of technical problems.
Among other things, the radar system had trouble distinguishing between vegetation and people when it was windy. Also, the satellite communication system took too long to relay information in the field to a command center. By the time an operator moved a camera to take a closer look at a spot, whatever had raised suspicion was gone.
The Homeland Security Department and Boeing said the early problems were fixed, but other glitches keep popping up. The latest: a software bug that causes video recording devices to lock on to the wrong cameras, hindering agents trying to collect evidence against illegal border-crossers.
Aside from the technical glitches, one of the biggest problems was that no one at the Department of Homeland Security or the engineers at Boeing bothered to ask the people who would actually be using the surveillance system what they wanted or how they wanted the system to work, "60 Minutes'" Steve Kroft reported in January.
"What we didn't do was iterate with them and said, 'Okay. Well, we heard that you'd like to be able to see what's going on the border. How about a little of this?' How about . . . we didn't do that. And that should have happened," Borkowski told "60 Minutes".
The government is trying to negotiate a deal with Boeing to let the Border Patrol begin using the first permanent stretch of virtual fence at night while the contractor is still working on it. Otherwise, the Border Patrol might have to wait until late summer or early fall to take control of the section.
In ordering a reassessment of the project on Jan. 8, Homeland Security Secretary Janet Napolitano said that the delays were unacceptable and that the government needs to consider more efficient and economical options. She did not elaborate.
"Americans need border security now - not 10 years down the road," Napolitano said.
As for the possibility of the project being scaled back by government officials, Tim Peters, a Boeing vice president, said: "They really need to come up with the right calculus, and we'll support that answer and look to be their preferred contractor to build whatever portion of what that calculus is."
Both Boeing and the government officials said the technical problems stemmed from an erroneous belief that the first-of-its-kind virtual fence could be put together relatively quickly by tying together off-the-shelf components that weren't designed to be linked.
Borkowski said the government shares blame with the contractor for the delays.
Ira Mehlman, a spokesman for the Federation for American Immigration Reform, which favors tougher immigration enforcement, said the project has suffered from a lack of oversight.
"We didn't get the border security we were promised," Mehlman said.