Award raises headquarters questions
- By Sara Michael
- May 31, 2004
Controversy surrounding the award of the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program started before Homeland Security Department officials decided which company would win the contract.
In the days before DHS officials announced the award, there were already questions about whether the department could consider Accenture, based in Reston, Va., because its parent company's headquarters are in Bermuda.
"If companies truly want to contribute to our nation's security, they can pay their fair share of taxes," Rep. Lloyd Doggett (D-Texas) said in a statement. "If they want a slice of the American pie, they had better help bake it."
He added, "We shouldn't award government contracts to companies that can come in with a winning bid by dodging their fair share of taxes."
However, Eric Stange, Accenture's managing partner for defense and homeland security, said Accenture is an entity based in the United States that employs 25,000 citizens and pays U.S. taxes. He also said the parent company did not incorporate a practice in the United States and then move offshore to avoid taxes — known as corporate inversion — but was initially incorporated in Bermuda.
"A lot of the issues of corporate inversion don't apply to us," Stange said. "We sort of get lumped in. The Smart Border Alliance consists of close to 30 companies with 330,000 U.S. employees. We were eligible to bid."
Asa Hutchinson, DHS undersecretary for border and transportation security, said all three teams met the legal requirements to bid for the contract, which were substantial for this national security program, and that all three lead companies are U.S. based.
Ray Bjorklund, vice president of consulting services at Federal Sources Inc., said the controversy about Accenture's parent company shouldn't be a concern because DHS likely did a thorough legal review, and the government often does business with foreign-based companies. He said the connection to the company's overseas parent likely won't affect the work on US-VISIT.
"When you are typically doing work of national security importance, that business unit needs to be properly fenced off, and they are," he said. "They operate essentially independent of the headquarters."