Apparently not wanting to be outdone by DOD, the Department of Homeland Security now has it's own "Halliburton". In just a few years, a no-bid contract with pricey consultant Booz Allen mushroomed from $2 million to a shocking $123 million.
In 2003, Booz Allen was given (without competition) a $2 million contract to help the new Department of Homeland Security quickly get an intelligence operation up and running. Over the next year, the cost of the no-bid arrangement soared by millions of dollars per month, as the firm provided analysts, administrators and other contract employees to the department's Information Analysis and Infrastructure Protection offices.
By December 2004, payments to Booz Allen had exceeded $30 million -- 15 times the contract's original value. When department lawyers examined the deal, they found it was "grossly beyond the scope" of the original contract, and they said the arrangement violated government procurement rules. The lawyers advised the department to immediately stop making payments through the contract and allow other companies to compete for the work. But the required competition did not take place for more than a year. During that time, the payments to Booz Allen more than doubled again under a second no-bid arrangement-- to $73 million.
Elaine C. Duke, the department's chief procurement officer, defended the decision to issue a second no-bid contract as necessary to keep an essential intelligence operation running until a competition could be held. "It was the best out of the choices that we had on the table at the time," she said. "We couldn't have a gap in mission."
Booz Allen vice president Jack Mayer said his firm did quality work, followed federal rules and charged fair prices. Mayer said Booz Allen was prepared to compete with other companies for the work. He said the cost of the project ballooned because demands from the department's offices kept expanding. "What happened was the hours that people were working," he said. "It wasn't Booz Allen's fault."
The Wapo article details a long and excrutiatingly incompetent effort by Homeland Security officials to end their "addiction" to Booz Allen and allow other companies to bid on the work.
Last year, when Booz Allen was finally forced to compete against other firms for the business, Homeland Security had broken the work into five separate contracts. In total, those contracts were worth more than $50 million over a year's time. Booz Allen won them all.
1 comment:
This article was timely, accurate and yet not comprehensive enough. I am very much on the inside of this issue and see this "Booz effect" happen up close and personally. The reason that the article wasn't comprehensive is becuase it implies that this Booz issue is an isolated incident with DHS.
In fact, this is Booz Allen's business strategy, and it is in full effect across the Federal Government to include DoD, DHS and the intelligence community. Despite having a storied name and noteworthy histroy, the Booz Allen of today now simply competes on providing "bodies" - as many bodies as possible. As the article indicates, we do this by controlling the procurement process, having unique insight into the budgets, having access to every contract vehicle known to man, overwhelming Federal employees before they can be stopped and using the political power and access provided by the most senior ex-Feds (check out the resumes of the folks who run the House of Representatives or the Intelligence community as examples).
I could go on about how we do this, but it is best left to the investigative reporters to dig into this secretive and highly lucrative "4th Branch of Government" operating out of Greensboro drive in Mclean. I will leave you with this: this is a bigger issue than $200M no-bid contracts and the fact that Federal agencies feel compelled to enrich the elusive Booz partners. This is really about a anti-competitive, anti-trust, cartel and monopolistic business enterprise. Politics aside, all of us should hope that some enterprising, honest, aggresive and brave US attorney at the Justice Dept. takes on the case of a lifetime and does an "Elliot Spitzer" on these characters. The only threat is the fact that, it is very likely that the DoJ attorney's secretary could work for Booz...
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