Profiting from "homeland security"

["Richard M. Smith" <rms () computerbytesman com>]

http://online.wsj.com/article/SB113011238023677139.html?mod=technology_main_
whats_news 

U.S. Scrutinizes Unisys's Billing On TSA Contract

By AMY SCHATZ 
Staff Reporter of THE WALL STREET JOURNAL
October 24, 2005

WASHINGTON -- Government investigators are looking at whether Unisys Corp.
overbilled for work in a $1 billion contract to provide phone and high-speed
Internet networks at airports for the Transportation Security
Administration.

Investigators are following up on a preliminary internal review that found
Unisys may have overcharged TSA for as much as 171,000 hours of labor and
overtime. The inquiry was reported yesterday by the Washington Post.

A TSA spokesman said the review came after officials of the agency, part of
the Department of Homeland Security, "noticed several irregularities" in the
contract and referred the matter to the Department of Defense's Defense
Contract Audit Agency, which "targeted the same areas of concern."

Unisys, among the largest contractors for DHS and TSA, won the contract to
build private high-speed data and phone networks for TSA in August 2002.
Officials at DHS grew concerned as costs climbed toward the contract's $1
billion cap -- even though the contract had several years to run and Unisys
had installed networks in less than half of the 429 U.S. airports it called
for. Unisys representatives didn't return calls to comment.

The overbilling allegation is the latest concern for the DHS's information
technology program, which has been cited several times by federal
investigators for insufficient security protections. In August, the DHS
inspector general reported "security vulnerabilities continue to exist" in
TSA's internal network, which links agency headquarters with airport
security directors around the country. TSA hasn't installed a comprehensive
testing system and doesn't sufficiently monitor network traffic to prevent
potential security breaches, investigators concluded.

Unisys, of Blue Bell, Pa., announced plans last week to reduce its work
force by 10% while reporting a preliminary third-quarter loss of $54.3
million and a 4% revenue drop. Moody's Investors Service downgraded Unisys's
credit-rating outlook on Thursday, citing the company's weaker-than-expected
third-quarter results and concerns about its restructuring plan and
long-term revenue growth and profitability.



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