The company hired to manage the complex logistics on one of the biggest homeland security contracts since Sept. 11, 2001, came out of nowhere.
Eclipse Events Inc., formed by two women with ties to the travel industry, first incorporated in Carlsbad, Calif., on March 28, 2002 -- two weeks after it received its $1.1 million no-bid subcontract from NCS Pearson Inc. That contract eventually grew to $24 million.
"Eclipse did not have any other work, before, during or after the completion of this subcontract," government auditors later found. A Defense Contract Audit Agency report obtained by The Washington Post said auditors could not substantiate $15 million of the work invoiced by Eclipse.
Eclipse was among the 168 subcontractors hired by Pearson to help it meet congressional deadlines to hire 60,000 airport passenger screeners by Nov. 19, 2002. Pearson was in the process of moving its assessment centers for applicants from its own private sites to hotels and other facilities nationwide.
In an interview yesterday, Pearson officials said they hired Eclipse because they were "recommended to us by a knowledgeable industry source." Pearson spokeswoman Eileen Cassidy Rivera said Pearson tried out other firms and picked Eclipse.
For Pearson, Eclipse hired contract employees around the country to help manage hotel staffers, vendors and security personnel, as well as to secure supplies and other necessities for the hotel assessment centers.
Listed as chief executive, secretary and chief financial officer in state corporate records is one person: Sunnye Sims, 42. Sims is a travel industry entrepreneur who now serves as a program director at an Evangelical Free Church in Southern California. She served as marketing and sales director for a group called the International Travel Directors Association in Orlando.
State records show that Sims worked closely with Nita Sullivan, the president of the Travel Directors association. Sullivan also served as an Eclipse vice president, the audit said.
Sims claimed $5.4 million in pay for nine months' work, the audit found. She also gave herself a $270,000 pension.
Eclipse also paid $5.2 million to an Orlando company called WJS Consulting Inc., which Sullivan formed four months after Eclipse was hired as a Pearson subcontractor, auditors found. Eclipse's accounting records were kept at WJS in Orlando, according to the audit.
Pearson's original contract with Eclipse was to be worth a little more than $1 million. Pearson raised the ceiling on the contract to $3 million on July 10, 2002, and to $24 million on Dec. 2, 2002. Auditors said they could find no explanation for the increase.
Eclipse originally told Pearson it would bill $250 or $350 per day for each of its workers, depending on their responsibilities. Auditors later discovered that the company billed $410 and $525 per day for each worker. The auditors found other discrepancies in the contract. Many of the invoices submitted by Eclipse included "dry cleaning charges and cell phone usage, which totaled to several hundred thousand dollars," according to the audit. Auditors said they could find no documentation supporting the charges.
At some hotels, the audit said, Eclipse employees made cash withdrawals, charged them to Pearson accounts and provided no supporting documentation. At one hotel in Los Angeles, a woman who identified herself as an Eclipse employee received a $1,950 cash payment charged to the government, the audit said. She received "19-$100's and 1-$50," the auditors said. The same employee signed a $1,000 bill for "box handling costs," again without providing supporting documentation.
In Chicago at the Hyatt Regency O'Hare Hotel, another woman who identified herself as an Eclipse employee received cash payments of $5,000 that were billed to the federal government without any documentation. At the Hawk's Cay Resort in Duck Key, Fla., two men identifying themselves as Eclipse employees charged $19,950 worth of labor fees to the government's account without providing any detail of what work was performed. One of those men also made a $1,500 cash withdrawal against the government account, the audit said.
Jennifer Brown, a meeting planner hired by Eclipse to help support the assessment centers, said she saw examples of extravagant spending by some contractors, but Eclipse was not among them.
At least one Pearson official became concerned by the amount of money that had been paid to Eclipse. After discussions with Eclipse, Pearson executives said they planned to reduce the $24 million award by $1.7 million. Dwayne Harris, Pearson's contracting administrator, wanted company officials to consider a deeper reduction.
"At this time it would behoove us to wait until more auditing can be done on their file," Harris said in an internal e-mail dated Dec. 20, 2002, and excerpted in the audit. "We are justifiable in our desire to not rush into a settlement just because Eclipse feels they are doing us a favor. We cannot be forced into a settlement offer. We are paying for the services that Eclipse is offering. We have a right to take our time. We have already paid them well over $24 million on a contract that started out with a $3M ceiling. The fact of the matter is they overcharged."
That same day, Harris was overruled by Bruce Emerson, Pearson's manager of contracts and procurement, and Randy Harris, the company's director of contracts and procurement. They decided to reduce the fee by $1.7 million, no more.
"The Director of Contracts has ruled on this," Emerson wrote in an e-mail. "I agree with Randy."
Auditors asked Pearson for supporting documents detailing spending by Eclipse. They also asked Pearson to specifically respond to their findings about the spending by Eclipse and its employees.
Pearson executives declined to provide documents, the auditors said.
In a response to the audit, Pearson said the conclusions with respect to Eclipse "are based on inapplicable" federal rules.
Pearson spokeswoman Rivera said: "We believe that Eclipse did a good job. We are not privy to the financial information and inner workings of Eclipse." She said she could not determine whether the information in the audit was accurate.
Sims registered another company called Eclipse Partners in California in January 2003. It used the same post office box mailing service as some of her other operations and included some of the employees who worked on the TSA contract.
Eclipse Partners claimed to be "one of the United States premier consulting firms" in promotional material.
"In our most recent success story, Eclipse Partners Inc. was presented with the monumental challenge of setting up over 150 remote locations, simultaneously, to support a post 9/11 security project," the material said. "The end result was a completed project by the congressionally mandated November 19, 2002 deadline."
The firm's Web site closed last year.
Sims could not be reached for comment. Her pastor said she was in Africa doing missionary work. Sullivan did not return phone calls. According to state records, she recently started a new company in Florida called Prestige Trailer Sales LLC.
In an interview yesterday, TSA officials said they were troubled by the Eclipse spending and invoices, and sided with the federal auditors. Internally, the TSA officials said they concluded that about $15 million in Eclipse expenses did not merit payment. The officials said they used that and other findings in the DCAA audits in negotiations with Pearson to help reduce the final contract amount, from $867 million to $741 million.