Contractor Accused Of Overbilling U.S.

Conaway acknowledged that Unisys had problems with its internal financial controls. He also said that employees miscoded timesheets and that mistakes were not caught until months later because the company was pushing to meet the demands of the contract.

"Our discipline on some of our internal processes lapsed a little bit," he said.

Conaway said the company, in partnership with the TSA, has since begun a new program, "Project Bedrock," to improve oversight and resolve questions raised by the audits, including a plan to review all of the labor hours billed under the contract. He also disputed the audit findings on the overtime.

TSA officials acknowledged that they were initially not well-prepared to manage the contract but were able to identify problems and refer them to auditors. The officials say they have since hired more staff members and improved oversight. They declined to comment on the findings of the audit.

"Given that we are currently working through audit results, TSA cannot speculate on the nature of those issues or how they may or may not have impacted the scope of work completed to date," said Yolanda Clark, chief spokeswoman for the TSA.

As of last month, less than halfway through the contract, Unisys had already billed the government $940 million. Conaway said the cost soared in part because the TSA and Homeland Security Department added more work to the contract. In addition, he said, the money earmarked for the project was never expected to be enough to achieve the system the TSA wanted within the desired time frame.

The $1 billion ceiling cited in contract documents at the time was simply a guess to get the project started, according to Patrick Schambach, the former chief information officer at the TSA who managed the project. Government officials who spoke at a background briefing said last week that they knew at the time that the project would cost closer to $3 billion but used the $1 billion figure because it would be more palatable to Congress. Schambach said senior Transportation Department officials told him to cite the $1 billion figure.

"That $1 billion was a number out of the air, frankly," said Schambach, who now works in the private sector for a government contractor. "I had no clue if that number was going to be enough to carry us," he said. "All I got from the DOT was, 'When you hit $1 billion, come back to us.' "

The nation's 27 largest airports are now on the high-speed network. But more than half of the country's airports where the TSA has a presence -- 228 of 443 -- still are not.

"They're not getting the secure-type information we were led to believe that this project among others would produce," said Stephen Van Beek, executive vice president for Airports Council International-North America, a trade group that represents the top airport authorities in the nation. "You have to have good information, and we're not getting that, and people are frustrated."

During the confusion that accompanied the Sept. 11, 2001, terrorist strikes, transportation security authorities were certain about one thing: The nation's aviation system needed state-of-the-art information technology to prevent another attack.

"The mindset at the time was an extreme sense of urgency," said Conaway, the Unisys executive.