Lawmakers criticize handling of DHS contracts

At the third in a series of House Oversight and Government Reform Committee hearings on potential waste, fraud and abuse, lawmakers criticized the Homeland Security Department's handling of two major contracts.

The hearing Thursday focused on the Coast Guard's $24 billion Deepwater modernization project, and the Secure Border Initiative, which has been estimated to have a price tag of as much as $30 billion. Lawmakers called for an overhaul of DHS' procurement processes.

Rep. Henry Waxman, D-Calif., chairman of the panel, and other members of both parties lambasted the Deepwater project's growth from $17 billion in 1998 to the current $24 billion estimate. Deepwater and Coast Guard officials said additional, necessary security upgrades following Sept. 11 attacks were to blame, rather than contractor inefficiency. Lawmakers also demanded that officials explain how, and by whom, a document criticizing the costly project was altered.

While a Navy document that criticized the Coast Guard's plan to build a 425-foot boat was in transit to Coast Guard leadership from the Deepwater project office, warnings that the ship was unlikely to be able to stand up to 30 years of wear and tear were omitted, Waxman said. He pointed out several times that the omitted references contained the word "problem!" highlighted by red ink, and insisted that someone, either a contractor or government employee, had "doctored" the document.

Coast Guard officials promised to determine how the changes were made, but contended that the document contained essentially the same information regardless.

They asserted that the warnings about the project -- named the National Security Cutter -- were not completely omitted, and instead were just edited and placed in other parts of the document. The allegedly deleted references are "provided elsewhere," said Coast Guard Commandant Thad Allen, and "say it in another manner, not in red ink."

Turning to the border security contract, Waxman said private sector officials who work on oversight for the SBInet program present a "potential conflict of interest" for ties they have to Boeing Co., the company executing the initiative.

DHS Inspector General Richard Skinner said that about 65 of 90 officials overseeing SBInet are private sector workers.

"There are more contractors than government employees," working on oversight, he said.

Comptroller General David Walker called for more stringent management of DHS contracts and more oversight of contractor performance. He said future contracts should have an "exit" clause for poor work.

"We ought to be able to pull the plug and taxpayers shouldn't have to pay a dime," he said. "We don't have a balance."