Contracting Rush For Security Led To Waste, Abuse

In an interview Friday, the deputy secretary of homeland security, Michael P. Jackson, said government leaders deliberately chose to team up with companies to jump-start the country's defense against terrorism, an approach he continues to support. He praised government employees and said their efforts have made the country safer. But Jackson acknowledged that "there were problems, and significant ones," with some of the contracts.

Jackson, who was confirmed in March, said he and recently appointed Homeland Security Secretary Michael Chertoff have made it a top priority to enhance oversight and correct the problems.

"It's good government, and it's what we owe the taxpayers," said Jackson, who was the deputy transportation secretary at the time of the attacks. "It's what we have a core responsibility to do."

Deadline-Driven Culture

Two months after the planes struck the World Trade Center and the Pentagon, Bush and Congress took steps toward creating a new security infrastructure. On Nov. 19, 2001, Bush signed a bill directing the government to hire and deploy a federal workforce to screen airline passengers and baggage. The act also called for the creation of the Transportation Security Administration.

To speed up the contracting process, the act exempted government officials from Federal Acquisition Regulation guidelines, long the standard for contracting oversight. Congress also gave the government a series of deadlines for putting improvements in place.

To help meet the deadlines, the TSA awarded a contract to NCS Pearson Inc. to hire 30,000 federal screeners within 25 weeks to replace a patchwork of private security firms at the nation's 429 major airports.

After the federal screeners began their work, reports started to circulate that some had criminal records. Federal auditors later discovered that TSA managers did not have reliable databases to conduct background checks. Employment files were disorganized and kept in hundreds of unsecured boxes.

The cost of the Pearson contract rose to $741 million from $104 million. Auditors blamed much of the increase on the deadlines, the lack of TSA supervisors to manage the contract, poor management by Pearson and weak financial controls at the agency.

Auditors later found that TSA managers lacked their own contract officers or a system to monitor companies. The managers routinely relied on information that was "out-of-date, incomplete, inaccurate, or otherwise unreliable," the GAO reported.

Another federal audit questioned $124 million in spending on the Pearson contract, and the government initially withheld $90 million from the company. The auditors also said that from $6 million to $9 million in spending by a subcontractor appeared "to be attributed to wasteful and abusive spending practices," and cited "the complete breakdown of management controls" at Pearson.

Mac Curtis, the president of what is now called Pearson Government Solutions, said in an interview last week that all issues had been resolved and all money had been paid. Curtis said the contract grew largely because the TSA ordered major modifications, including a doubling of the number of screeners hired, to 62,901. The government also requested that an additional 66,219 be pre-certified for immediate hiring.

The TSA also demanded that the job interviews take place at hotels and conference centers rather than at the company's 2,500 assessment centers, which added significantly to the cost, said Curtis, who noted that his company was responsible for hiring the screeners but not training them.