EPA Suspends CSC Unit From Bidding on Contracts

Computer Sciences Corp. said Monday that a key division was suspended from bidding on new government contracts, the latest fallout from a long-running investigation into the Environmental Protection Agency’s management of outside contractors.

If the suspension is not lifted quickly, it could deal a heavy blow to El Segundo-based CSC, which manages computer systems for the EPA, other government agencies and private corporations.

The CSC unit in question, the Applied Technology Division, does about $500 million a year in business with the federal government, CSC spokesman Bruce Plowman said, and is currently eyeing “several hundred million dollars” in new contracts. The suspension affects only new business.

Last year, the EPA said it would cancel the last two years of a five-year, $347-million contract with CSC under which the company essentially ran all the agency’s computer operations. An investigation by the EPA’s inspector general had found about $13 million in questionable bills from CSC.

The EPA alleged that CSC had billed for work that should have been done by government employees and had used employees who didn’t have the proper educational qualifications.

The inspector general’s investigation was spurred by a congressional probe of federal agencies’ use of outside contractors. Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee’s oversights and investigations subcommittee, has asserted that such contracting programs are out of control and waste taxpayer money.

CSC said late Monday that it hopes to meet with the EPA this week to address any concerns. The company said it hopes that the suspension will be lifted quickly. Overall, about half of CSC’s $2.5 billion in annual revenue comes from the federal government, though the contract suspension applies to only one of the company’s six divisions.