Homeland Security Contracting

The Administration’s domestic contracting record is no better than its record on Iraq. Waste, fraud, and abuse appear to be the rule rather than the exception:

Hiring Airport Screeners
A Transportation Security Administration (TSA) cost-plus contract with NCS Pearson, Inc., to hire federal airport screeners was plagued by poor management and egregious waste. Pentagon auditors challenged $303 million (over 40%) of the $741 million spent by Pearson under the contract.1 The auditors detailed numerous concerns with the charges of Pearson and its subcontractors, such as “$20-an-hour temporary workers billed to the government at $48 per hour, subcontractors who signed out $5,000 in cash at a time with no supporting documents, $377,273.75 in unsubstantiated long distance phone calls, $514,201 to rent tents that flooded in a rainstorm, [and] $4.4 million in ‘no show’ fees for job candidates who did not appear for tests.”2 A Pearson employee who supervised Pearson’s hiring efforts at 43 sites in the U.S. described the contract as “a waste a taxpayer’s money.”3 The CEO of one Pearson subcontractor paid herself $5.4 million for nine months work and provided herself with a $270,000 pension. 4

Border Cameras and Sensors
The Administration is spending $239 million on the Integrated Surveillance and Intelligence System, a no-bid contract to provide thousands of cameras and sensors to monitor activity on the Mexican and Canadian borders. Auditors found that the contractor, International Microwave Corp., billed for work it never did and charged for equipment it never provided, “creat[ing] a potential for overpayments of almost $13 million.”5 Moreover, the border monitoring system reportedly does not work.6

Port Protection
After spending more than $4.5 billion on screening equipment for the nation’s entry points, the Department of Homeland Security is now “moving to replace or alter much of” it because “it is ineffective, unreliable or too expensive to operate.”7 For example, radiation monitors at ports and borders reportedly could not “differentiate between radiation emitted by a nuclear bomb and naturally occurring radiation from everyday material like cat litter or ceramic tile.”8

Baggage Screening
The TSA awarded Boeing a cost-plus contract to install over 1,000 explosive detection systems for airline passenger luggage. After installation, the machines “began to register false alarms” and “[s]creeners were forced to open and hand-check bags.”9 To reduce the number of false alarms, the sensitivity of the machines was lowered, which reduced the effectiveness of the detectors. Despite these serious problems, Boeing received an $82 million profit that the Inspector General determined to be “excessive.”10

Virtual Case File
The FBI spent $170 million on a “Virtual Case File” system that does not operate as required.11

After three years of work under a cost-plus contract failed to produce a functional system, the FBI scrapped the program and began work on the new “Sentinel” Case File System earlier this year.12

Lavish Spending
The Department of Homeland Security Inspector General found that taxpayer dollars were being lavished on perks for agency officials. One IG report found that TSA spent over $400,000 on its first leader’s executive office suite.13 Another found that TSA spent $350,000 on a gold-plated gym.14

Airport Network Upgrades
According to news reports, Pentagon auditors recently examined a contract between the Transportation Security Administration (TSA) and Unisys, a technology and consulting company, for the upgrade of airport computer networks.15 Among other irregularities, government auditors found that Unisys may have overbilled for as much as 171,000 hours of labor and overtime by charging for employees at up to twice their actual rate of compensation.16

While the cost ceiling for the contract was set at $1 billion, Unisys has reportedly billed the government $940 million with more than half of the seven-year contract remaining and more than half of the TSA-monitored airports still lacking upgraded networks.17