Panel Criticizes Homeland Security Deals

Contract spending by the Department of Homeland Security has surged by billions of dollars since the agency’s creation in 2003, but contracts have been plagued by large-scale waste, abuse and mismanagement, according to a bipartisan congressional report.

The agency has repeatedly planned contract projects improperly, has increasingly awarded them without adequate competition, and has not had enough staff to monitor contracts after they have been signed, the report said. Moreover, costs have frequently spiraled beyond initial estimates, which department personnel sometimes set misleadingly low, the report said.

The report, prepared by staff of the House Committee on Government Reform, pointed to a case in which the Border Patrol paid $20 million for camera systems and related gear that malfunctioned or were never installed.

It said a $10-billion border security program meant to track visitors’ U.S. entries and departures was not able to monitor exits and was vulnerable to unauthorized access.

Describing a $1-billion Transportation Safety Administration contract with Unisys Corp. in August 2002 to upgrade computer networks, investigators said Unisys overcharged taxpayers by billing up to $131 an hour for employees who were paid less than half that amount.

And TSA staff had privately estimated the cost of the Unisys contract at $3 billion to $5 billion but told congressional officials it would cost $1 billion because the lower number “would be more palatable.”

“The Department of Homeland Security has a critical mission. Unfortunately, its acquisition structure and workforce challenges, as our report shows, betray serious weaknesses that are impeding the ability of DHS to protect the homeland,” said Rep. Thomas M. Davis III (R-Va.), chairman of the committee.

The panel’s ranking Democrat, Rep. Henry A. Waxman of Los Angeles, said: “Reckless spending, poor planning and weak oversight have undermined crucial homeland security projects and wasted hundreds of millions of dollars.

“Virtually everything that could go wrong has gone wrong. We’re less secure and deeper in debt because of the outrageous mismanagement of these contracts,” said Waxman, who described the report as the first comprehensive assessment of the administration’s record on homeland security contracts.

Department spokesman Russ Knocke criticized the report for using the TSA example, which predates the agency’s creation, and said the department had saved more than $2 million through strategic sourcing since 2004.

“We take very seriously our responsibility to be good stewards of taxpayer dollars,” Knocke said, adding that it was a priority for Secretary Michael Chertoff.

The report comes on the heels of recent investigations that revealed widespread credit card fraud and abuse of the funds earmarked for Hurricane Katrina victims. Multiple Katrina-related investigations are ongoing. The accounts of fraud and abuse, along with the Federal Emergency Management Agency’s failures during that crisis, have led Congress to demand changes in FEMA.

The continued problems have caused some lawmakers to grow frustrated with the fledgling department, which was cobbled together out of 22 separate agencies after the Sept. 11 attacks.

The report was based on a review of about 350 reports by government auditors and investigators, many of which had not been publicly released. It identified 32 contracts totaling $34.3 billion that were plagued by waste, abuse or mismanagement.

In a measure of how much money has poured out of the department, the report noted that agency spending rocketed from $3.5 billion in 2003 to $10 billion two years later. Over the same period, the percentage of contracts the agency awarded without full and open competition increased from 19% to 55%, the report said.

“Contract mismanagement at DHS has a steep cost for the taxpayer,” the report said. “Competition in federal contracting protects the interests of taxpayers by ensuring that the government gets the best value for the goods and services it buys.”

Amid the reports of problems, the department is continuing toward large contracts, including a $2-billion project to design, build, test and operate a border security system.