Homeland Security Contracts Abused

The report warns that the department is on the verge of making more mistakes by giving contractors too much latitude. It points to a planned multibillion-dollar contract for border security that has only the vaguest of requirements. "We're asking you to come back and tell us how to do our business," Homeland Security Deputy Secretary Michael P. Jackson told industry leaders in January.

Among the problems cited in the report:

· A Defense Contract Audit Agency review of an NCS Pearson Inc. contract to hire airport screeners uncovered at least $297 million of questionable costs, including luxury hotel rooms. The company has defended its performance in previous statements.

· A surveillance system for monitoring activity on the Mexican and Canadian borders does not work because of cameras that malfunction when exposed to snow, ice or humidity.

· Two TSA employees used government purchase cards to buy $136,000 worth of personal items, including leather briefcases.

Beyond these specific cases, the report highlights overall problems with Homeland Security contracting, including poor planning, a dependence on no-bid contracts and inadequate oversight.

As contracting surged by 189 percent from 2003 to 2005, the department's acquisition staff did not to keep pace, increasing by less than 20 percent. The average staffer is overseeing twice as much money now as in 2003. As the burden grew, contracting officers increasingly turned to sole-source contracts or contracts for which only a limited number of firms were allowed to compete.

Paul C. Light, professor of public service at New York University, said industry consolidation in defense and homeland security increasingly enables firms to present themselves as sole-source bidders, at the same time that government expertise and contract management staffs have been hollowed out.

"They'd like to boll-weevil themselves down to the agencies and create dependencies that will last for years, if not decades," Light said.

Today's report was requested by Rep. Henry A. Waxman (D-Calif.), ranking member of the House Government Reform Committee, who was joined by Chairman Rep. Thomas M. Davis III (R-Va.).

Waxman said today's report reveals "a pattern of reckless spending, poor planning and ineffective oversight that is wasting taxpayers dollars and undermining our security efforts."

Davis said the department has a critical mission. "Unfortunately, its acquisition structure and workforce challenges . . . betray serious weaknesses that are impeding the ability of DHS to protect the homeland," he said. Davis's committee is scheduled to hold a hearing on Homeland Security contracting today.

Still, others noted that it remains early in the department's history and that problems are to be expected.

"You have to look at DHS in context. They came into being at a time of crisis. They faced at once the building of a department and the integration of 22 different agencies. And then two years later, you had the worst natural disaster in American history," said Stan Soloway, president of the Professional Services Council, a trade group that represents contractors. "I'm not saying they get a pass, but I'd be hesitant to poke a finger in their eye."