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If you don't always read the Sunday newspapers or you don't get the Washington Post, there is one story that will have IT folks talking around the water cooler about the Transporatation Security Agency's massive and much watched IT Managed Services contract. You can read read FCW's coverage of ITMS here.

The WP story essentially says that Uniysis essentially overcharged TSA on ITMS.
Contractor Accused Of Overbilling U.S. [WP, 10.23.2005]
Federal auditors say the prime contractor on a $1 billion technology contract to improve the nation's transportation security system overbilled taxpayers for as much as 171,000 hours' worth of labor and overtime by charging up to $131 an hour for employees who were paid less than half that amount.

Here is how Slate.com's Today's Papers recaps the piece:

The Washington Post leads with a leaked government audit that catalogues billing irregularities in a billion-dollar contract to build a high-tech communications network among the nation's airports...

Government auditors found that Unisys, the company building the Transportation Security Administration's airport-to-airport communications system, billed the government in allegedly unauthorized ways. For example, the company requested and received $131/hour in reimbursement for workers that it actually paid about $50/hour. It billed thousands of hours of overtime "at a 100 percent profit" and altered timesheets months after workers filled them out. The company admitted to the Post that it lumped "hard-to-categorize" workers in the highest-wage category but claims that the overtime was proper and that it was correcting worker errors in the timesheets. For its part, the TSA admitted that, in its rush to get the contract moving, it didn't monitor expenses well. (In 2003 the government had only 25 people overseeing the $1 billion contract; today there are 242 people.) Elsewhere in the piece, anonymous government officials admit that they deliberately low-balled the contract's price (it will eventually cost $3 billion) to please Congress.

I'm not going to comment on the story yet because I have not finished it yet, but ITMS has been one of the most watched contracts -- in January 2004, we named it as one of the programs to watch in our FCW Watch List issue. The program has attracted extensive attention not only because it is one of he early contracts at the nacent Homeland Security Department -- I don't believe DHS even existed when the contract was awarded but it was a homeland security contract and it came following September 11, 2001.

But it is also a performance based contract.

The story comes at a difficult time for procurement officials -- especially if an agency is attempting to try a new or innovative contract.

FCW columnist Steve Kelman, a Harvard professor and former administrator of the Office of Federal Procurement Policy, has been warning about the post-Katrina procurement world. If you somehow don't know, it is tough. (I'd recommend Kelman's most recent column -- an open letter to procurement officials.)

As always, I'd be interested in your take on the WP's story... and the state of procurement right now.

Posted by Christopher Dorobek on Oct 23, 2005 at 12:15 PM


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