High Cost of Homeland Security

Robert O'Harrow and Scott Higham
Washington Post Staff Writers
Monday, October 24, 2005; 3:00 PM

Washington Post staff writers Robert O'Harrow and Scott Higham were online to answer reader questions about their series of articles on the Dept. of Homeland Security and private companies hired by the agency to complete major projects.

A transcript follows .


Scott Higham and Robert O'Harrow: Hi, everybody. Thanks for joining us today. We're happy to take your questions and thoughts about homeland security contracting.


Washington, D.C.: Would it be fair to say that in the rush to create homeland security programs that there was a tendency to allow usual rules to be bent in order to achieve objectives, and that there were people waiting to take advantage of the bent rules for a profit to themselves?

Scott Higham and Robert O'Harrow: That's a fair analysis. Homeland security officials have said repeatedly that starting a host of urgest projects was the most important thing at the time.


Alexandria, VA: Why does the Post refuse to assign an investigative reporter to cover the heart of these problems with over-billing, which is with the IG offices themselves?

IGs are not independent organizations but serve instead to simply whitewash mistakes and corruption in government decision making. In this case, some government authority had to give this contract to Unisys. Your own graphic shows that Unisys has a fourteen year history of corruption. Federal Law (The FARs-Federal Acquisition Regulations) state that the government must avoid giving new contracts to companies that have defrauded the government in the past. So why is no one investigating the corrupt government official who awarded this contract?

It is because the IG deflects and diverts all blame to the contractor. And they smear government whistleblowers such as Bunny Greenhouse who dare to put the blame where it belongs, further preventing other frightened, but honest, bureaucrats from coming forward when they witness cronyism.

It was the Post that put Ms Greenhouse's story in the Style section, and not where it belonged, on the front page, as an example of someone courageous enough to ignore the vituperation she will receive as part of a full Karl Rove blue plate special.

As the fourth estate - the fourth branch of government - you are supposed to act as check and balance on corruption in the other three branches of our government. Instead you have abdicated your responsibility and behave like Judith Miller. We all know that is much easier to simply retail the pablum government officials hand you when they want to make their case. It is much more difficult to commit real journalism and dig for the facts.

Don't misconstrue this as a defense of Unisys. The track record they have shown over the years establishes a pattern of abuse that means they are likely guilty and should be prosecuted. But until all of the guilty parties are prosecuted, this problem will never get fixed and taxpayers will continue to be gouged by corruption at the highest levels of our government. A Web of Truth (October 19, 2005)

Scott Higham and Robert O'Harrow: Thanks for the thought. Inspectors general play an important role in oversight. Recently there has been a debate about how close they should work with the top administrators of the agencies they're assigned to hold accountable. It appears this is a debate that is far from over.


Washington, D.C.: This article was one of a series - what plans do you have for the future?

Scott Higham and Robert O'Harrow: Our job is in many ways very old fashioned. So we will continue to try to tell our readers how taxpayer money is being spent - and what they're getting for it in the way of improved security. Our stories for the past year or so can be found at In that spirit, if anyone our there has information that might be helpful, please send us a note at and We'll treat your information fairly and with discretion.


Wichita, KS: Are there any further details about the audit findings in overbilling in other areas? What about the subcontractors Unisys utilizes?

Scott Higham and Robert O'Harrow: We addressed the major findings of these audits. The TSA has declined to release these audits and others relating to major homeland security conracts. As for the subcontractors, information was limited because the company declined to share that information, according to the audits.


Arlington, Va.: Are there examples of other companies with patterns of abuse, or is Unisys alone in this category? If there are others, why draw attention to a single contractor, and not to the entire process?

Thanks for taking my question.

Scott Higham and Robert O'Harrow: Good question. We have been writing about a number of companies, and we intend to keep going. It's probably important to note that getting details about government contracts these days is a real challenge. As we develop and verify contracting details, we publish. Alas, it's a slow process.


Annandale, VA: What critical analysis of the accusations was done before running this story? Has the Post seen evidence to conclude that the accusations are likely true?

Scott Higham and Robert O'Harrow: After we obtained the audits and other material, we read through hundreds of pages of contracting documents. Then we spoke to contracting specialists. Before running the article, we spoke at length to officials at Unisys and the TSA, who acknowledge the thrust of the audit findings.


West Lafayette, Ind.: What systems, if any, is the government using to control contractor spending?

Scott Higham and Robert O'Harrow: A brief but probing question. Thanks. As technical as it can seem, oversight of contractors is an important part of government, especially now, when the government relies on outsourcing for a growing array of services. Starting more than a decade ago, the government started cutting back its procurement force. The idea was to make the government leaner and more efficient. Some agency officials are now seeing they need more oversight officials to ensure that taxpayers get what they pay for. In 2003, the TSA had only 25 contract oversight specialists. Now it has 242. At the same time, the Department of Homeland Security is also expanding its oversight force to keep a close eye on spending.


Northern VA: As a contract professional, I wanted to clarify a couple of things from your article.

A contract does not dictate what someone is paid. That is determined by a contractor. The labor billing rates in a contract are not what an employee is paid. They are what the government is billed and what is reimbursed to the contractor. Rates consist of a base rate, with applicable approved indirect rates and fee added to them. These are (or should be) reviewed during the award process and approved by the Government for a contractor to use. The difference between what someone is paid and the billing rate is the profit a company makes. It also can result in a loss if there is not a category where a company can fit a highly paid employee.

As you mentioned, most contracts have labor category qualifications that Unisys ignored. Some contracts do not have these qualifications, but most do. If they do not, a contractor may place them in any labor category rate they see fit. This is where Government oversight must come in and review a contractor's cost proposal.

If Unisys was unable to find employees to fit in other categories beyond the Sr. Subject Matter Expert, they could have appealed the Government for a waiver. This is commonly accepted practice that many contractors follow because the Government understands that there might be a limited labor pool to choose from. As a contract professional, I am ashamed at Unisys' actions. There are ways of dealing with the issues they encountered. I think that the Government contracting process is at a crucial point between contractors not being honest and the lack of Government oversight and control.

Scott Higham and Robert O'Harrow: A dispatch from the contracting world. This is complex material, and it's encouraging to us that people are paying attention to how their money is being spent. Thanks for the observations.


Dept. of Homeland Security: So we spend money. So we sometimes overspend. Isn't your life worth it?

Have you ever looked at what countries who have had armed guards in airports for decades spend on Homeland Security? England, France, Italy, Spain, Israel, Japan, Indonesia. What fraction of their country's budget is for Homeland Security? Are we in the same ballpark? Do they overspend?

Scott Higham and Robert O'Harrow: Here's an interesting question. Anybody care to attempt an answer? All thoughts welcome.


Nashville, TN: One common thread to all these cost overrun stories is the panic spending that ensued after 9/11. PBS NOW had a similar story on Bunny Greenhouse and Halliburton contracts in Iraq which were just extended for 5 yrs without putting them up for bid.

Couldn't these outrageous 9/11 costs have been avoided if journalists like yourself had drawn attention to getting the FBI's computer woes fixed back in 1999 when it was a $200,000 problem, preventing the attacks? Louis Freeh was on Meet the Press last week and blamed Congress for holding up the money.

Scott Higham and Robert O'Harrow: What do you readers think?


Minneapolis, Minn.: How will we know when we have won the war on terror?

Scott Higham and Robert O'Harrow: Well, that's a tough one. We know for sure that many people are working hard to prevent another attack. That means far more money is going to be spent on homeland security. To us, that means taxpapers, Congress and the press are going to need to remain vigilent to ensure the money is well spent.


Washington Post: Didn't the GAO find major problems with TSA contracting?

Scott Higham and Robert O'Harrow: Thanks for the softball. The GAO has focused on a wide range of homeland security contracts. They have raised serious questions, repeatedly, about oversight, spending and effectiveness. You can find some of those and other government reports at


Alexandria, Va.: In talking to your sources, are any of them saying the creation of DHS was a mistake? Would these contracts have been better managed if agencies like TSA had remained part of their original agencies?

Scott Higham and Robert O'Harrow: As you know, a number of people in the department ask that question. Congress folded 22 different agencies under one umbrella. That was a phenomenal task, undertaken by people who worked endless hours to make it work. But it has been a bumpy ride, and some officials believe President Bush's original objections against the creation of a new bureaucracy may have been right. Only history will tell us the correct answer.


Los Angeles, Calif.: I never thought the gov't should have undertaken a massive re-organization after 9/11.

Department of Homeland Security? Are you kidding me? Because a few CIA officers didn't pick up the telephone to inform the FBI that al qaeda cells were in the states?

What a silly silly idea. Katrina has exposed the "reorganization" for what it was - beauracratic nonsense.

Scott Higham and Robert O'Harrow: Any responses to this?


Scott Higham and Robert O'Harrow: To the Unisys person who raised an important question, please email us and


Nashville, Tenn.: I don't recall whether your article mentioned whether fines or penalties had been assessed. I remember one case where G.E. was caught billing the costs from one defense contract to another contract. Someone went to jail for several years over that. Do you see prosecutions coming in the Unisys case revelations?

Scott Higham and Robert O'Harrow: The TSA and company are discussing the findings of the audits. There's no way to know right now what might follow. The company has stated that it has done nothing wrong.


Scott Higham and Robert O'Harrow: Dear Navy employee who sent us that note: Please email us at and To anyone who writes or calls us, we keep our conversations and correspondence confidential.


Arlington, Va.: As a participant stated earlier: "The difference between what someone is paid and the billing rate is the profit a company makes." ... this is the fundamental business model of any major technology/business consulting firm.

I feel Sunday's cover article may have inadvertently mislead readers regarding this process. As a contractor myself, I would love to be paid my full billing rate, but then again, I wouldn't have a foundation of offices, benefits, and a construct for professional growth to stand on.

Contactors are hired to accomplish jobs that can't be done by gov't employees alone. Taxpayers dollars are many times spent hundred of times more efficiently via these vehicles. If you were setting up a security system for your own home would you hire ADT or Mayor Williams.

Food for thought.

Scott Higham and Robert O'Harrow: Thanks for your perspective. It's clear that the government needs to rely on contractor for important work. But as we have found in previous contracts, the outcome is sometimes less than optimal and very expensive. In this case, auditors raised questions about whether the company was charging far more than it should have.


Washington, D.C.: What question did they raise?

"To the Unisys person who raised an important question, please email us and"

Scott Higham and Robert O'Harrow: Nice try. Thank you - all of you - for joining us today. It's a reminder that people are interested and engaged, even on a topic as complex as government contracting.


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