Company Says Nothing Out Of Line With Contract
Federal auditors are
questioning several billing documents filed by Unisys, the prime
contractor on a $1 billion tech contract with the Transportation
Safety Administration. Auditors claim, among other issues, the
agency (and by extension, taxpayers) was overbilled by as much as
171,000 hours worth of labor and OT.
The auditors also claim Unisys charged the TSA as much as $131
per hour for employees who were then paid less than half that
amount.
"We found significant internal control weaknesses regarding the
reliability of the recorded labor hours," said auditors from the
Defense Contract Audit Agency, an auditing group hired by the TSA
last year to review the Unisys contract. "We were unable to
quantify the impact of the adjustments due to the lack of
verifiable documentation."
Unisys was hired three years ago by the then-emerging TSA to
create an advanced computer network, linking thousands of federal
screeners and other employees at airports across the country to the
TSA's security command centers.
Project costs have since grown to more than double the
anticipated amount every month, according to a report in the
Washington Post, even though the network is far from complete --
less than half of the airport slated for the new technology have
yet to be improved.
Now, according to
government officials, project costs could escalate to as much as $3
billion.
So, where does Unisys fit into this? According to industry
analysts and procurement specialists, the Unisys contract is a
shining example of the potential dangers of handing important
government contracts to private corporations. Other examples of
recent issues with such a system include efforts to hire baggage
screeners and place bomb and radiation sniffers at airports.
According to internal auditing documents obtained by the Post,
two separate reviews in 2004 showed Unisys was charging the
government much higher than normal labor rates for low-level
employees, in some cases as much as $131.12 per hour for a
technical writer who should have been making about half that. The
audits found Unisys kept the difference, instead of paying it to
the employee or refunding it back to the TSA.
The auditors also found timesheets that had been 'repeatedly'
adjusted to change job categories, without "adequate
explanations."
“There certainly was no attempt here to commit any type of
misdeed of any form,” said Tom Conaway, managing partner of
homeland security for Unisys, in response to the Post's
inquiries.
However, Conaway later admitted "our discipline on some of our
internal processes lapsed a little bit," as he acknowledged
employees who miscoded timesheets. According to Conaway, these
errors were not noticed until much later, as the company was
focusing its efforts on meeting the demands of the contract.
He disputed the auditors' claim of incorrectly billed overtime,
which in their words represented "100 percent profit to
Unisys."
Conaway also stressed
Unisys has since implemented a program, in cooperation with the
TSA, called "Project Bedrock," intended to improve oversight and
resolve any issues raised by auditors. Labor costs will be
extensively reviewed under the contract, according to the Unisys
spokesman.
The TSA is also coming under fire from auditors for some of its
initial assessments, including the original figure of $1 billion to
cover the cost of the program. According to former TSA chief
information officer Patrick Schambach, the figure was only a guess
of the actual cost of the upgrade program.
"That $1 billion was a number out of the air, frankly," said
Schambach, who now works in the private sector for a government
contractor. "I had no clue if that number was going to be enough to
carry us. All I got from the DOT was, 'When you hit $1 billion,
come back to us.'"
As of last month,
Unisys had billed the government $940 million under the contract,
with less than half the work completed. While the nation's largest
airports are now on the upgraded network, more than half of the 443
airports where the TSA has a presence are not. The costs of adding
those remaining 228 airports to the list will bring the final costs
closer to $3 billion -- a fact Transportation Department knew at
the time, said Schambach, although he maintains he was told to
quote the more palatable $1 billion figure.
The TSA claims it became concerned with rising project costs in
2004, when they initially asked auditors to review Unisys's billing
policies. Although the TSA questioned the costs, the agency also
termed Unisys's performance "acceptable" in a recent internal
review.,
"Given that we are currently working through audit results, TSA
cannot speculate on the nature of those issues or how they may or
may not have impacted the scope of work completed to date," said
chief TSA spokeswoman Yolanda Clark.