About 232,000 people filed applications for jobs at three sections of the Department of Homeland Security that ended up in a kind of online twilight zone, prompting government officials to issue an unusual termination notice to Monster Government Solutions, an affiliate of the Web-based employment service Monster.com.

The problems with Monster reflect the larger difficulties facing he government as it tries to capitalize on the speed and cost-saving potential of the Web by contracting out hiring and other human resources activities that traditionally were run by the government.

Because of its security mission and its recent creation, DHS needed to hire a lot of new employees for various jobs. To help with the time-consuming work of reviewing and culling applications, DHS contracted out application-processing to QuickHire, which is owned by Monster Government Solutions, a unit of Monster Worldwide Inc. The Web-based hiring system crashed in January.

DHS says 232,000 prospective applications were lost in the crash, and the agency has since had to hire staff to process new applications by hand. Monster officials disputed this assertion, contending that access to the data was slowly being restored.

The contract with Monster was for $753,000, roughly half of which had been paid before it was terminated.

"It was extremely unfortunate to have the system go down at a time when we need qualified people. We need these people, their applications are lost, and these well-qualified people go elsewhere," said Christiana Halsey, deputy assistant commissioner in the Customs and Border Protection division. The two other sections covered by the contract are Immigration and Customs Enforcement and U.S. Citizenship and Immigration Services.

Monster said none of the applications are "lost."

"Monster Government Solutions has never lost an application for any of the more than 100 government agencies we serve," the company said. "As part of their QuickHire system, Customs had 232,000 applicants [individuals who hold an account with the system to apply for jobs] in their database when they terminated the contract. We are currently in the process of arranging to provide that data to Customs."

There is some dispute over how much material was accessible. Monster said that after the crash, "Customs could view and process applications within the system that had been submitted prior to that date but job seekers could not apply for new positions online."

However, in the formal "termination for cause" notification, Elizabeth C. Heitz, a contracting officer for Customs and Border Protection, said Monster had failed to correct problems: "The system failed repeatedly. Specifically, employees accessing the system were involuntarily exited from the system or were unable to access the system at all. . . . During the failures, the system 'froze' and then displayed an error message."

The Department of Health and Human Services had similar problems with the QuickHire system under a much larger contract to process applicants for jobs. But HHS spokesman Bill Hall said that over the past three months, the department and Monster have been working through the difficulties, and have decided to divide the department into four hiring groups, to place less burden on the QuickHire program.

Hall said one of the four sections is now up and running. Compared with traditional, paper-based job applications, QuickHire is far less cumbersome and has, when working, "dramatically reduced application time and review time," he said. No data have been permanently lost, Hall said.

Halsey was sharply critical of her agency's experience with Monster. Ultimately, she said, Homeland Security had to contract with a much more expensive service provided by the Office of Personnel Management, "re-announce" about 750 job openings and retrain staff to deal with the new software and the hiring procedures it required.

In the company statement, Monster said: "Monster Government Solutions' QuickHire software is currently being used effectively and productively by more than 100 agencies. . . . Over the past year more than 2 million applications have been processed by QuickHire for government agencies and the system has never lost an application."

The company said that Monster Government Solutions and Customs had developed a plan to resolve the problems but that Customs terminated the contract before the plan could be implemented. Monster said it is considering its options to respond to the termination notice.