|Originally Aired: July 27, 2006
Report Finds Abuse of Homeland Security Contracts
|A congressional report to be released Thursday has found dozens of Homeland Security Department contracts worth $34 billion were prone to wasteful spending, overcharges, and abuse stemming from an increase in no-bid deals and a shortage of managers.
RAY SUAREZ: The Department of Homeland Security was created
three years ago to consolidate the work of 22 federal agencies under one
cabinet-level executive. It was seen as the best way to coordinate and oversee
all of the increased spending on domestic security in the wake of the 9/11
Now, a new congressional survey of spending by the
department reveals big problems with the way homeland security contracts have
been priced and awarded.
Among its findings, 32 department contracts, totaling $34
billion, were plagued by waste, abuse or mismanagement. The value of no-bid
contracts DHS awarded over the past three years increased by 739 percent, and
55 percent of all DHS contracts awarded in 2005 were no-bid.
For more, we're joined by Griff Witte of the Washington
Post, who reported on the congressional findings in this morning's edition.
Welcome to the program. In the report and in the hearings
that followed, did they get at how this all happened, in addition to counting
up the eye-popping numbers involved?
GRIFF WITTE, The Washington Post: They did. They looked at
specifically, as you said, about 32 contracts overall, collectively worth about
$34 billion. And what they found in those contracts, which covered a myriad of
areas of homeland security, ranging from border security, to the response to
Hurricane Katrina, to screening passengers, to screening baggage at the
airports, and what they found essentially was that there were a few different
things that went on.
One was that you had programs that just simply did not work.
You had, for instance, a border security contract in which there were supposed
to be some very high-tech cameras mounted along the border that would detect
whether illegal immigrants were trying to cross.
But those cameras, in actuality, did not work. They would
malfunction in cases where there was extreme heat or extreme cold, where there
was ice, snow, where there was humidity. So in these cases, which are, as you
can imagine, pretty common along the borders, the systems just simply broke
down. They did not do the job.
RAY SUAREZ: In example of cases like the one you just cited,
is anyone punished? Is anyone made to account for the fact that a product was
sold that simply did not work?
GRIFF WITTE: That's one of the troubling things that
Congress is very interested in right now, is that the government doesn't have a
whole lot of tools at its disposal to go after contractors when things like
this occur. And there are some cases where award fees were withheld, where the
contractors did not get the bonuses they were expecting to get.
But in many cases, the contractor simply got the money that
they were supposed to get, and in cases -- in quite a few cases, actually, they
got a lot more money than initially was expected. And whether the system worked
or not, the contractors were paid.
Getting our dollar's worth
RAY SUAREZ: Well, FEMA comes in for some heavy treatment in
both in the report and in the hearings. What were some of the ways that money
was spent on, for instance, Gulf
Coast recovery that
attracted the committee's attention?
GRIFF WITTE: In the immediate aftermath of Hurricane
Katrina, one of the biggest questions was, where do you put all of the
evacuees? And what we learned very quickly was that FEMA, while it has some
plans for that, did not have in place all of the contingency contracts that it
was going to need in order to place the evacuees in safe places outside of the
And so FEMA bought thousands and thousands of trailers right
after Katrina made landfall on the Gulf
Coast. And what happened
was a lot of those trailers simply did not get used. They have been sitting
idle for months and months now. They were never used.
FEMA also contracted with Carnival cruise lines to bring in
some cruise ships where it was expected that evacuees would be spending the
nights. But unfortunately, in those cases, the costs were just exorbitant
compared to what they could have done had they used other means.
RAY SUAREZ: Well, what are the kind of price tags we're
talking about, in the case of the mobile homes and the cruise ships?
GRIFF WITTE: In those cases -- well, for instance, with the
Carnival cruise line, they found that a single night stay averaged out overall
of the people who were staying there, worked out to about $300 a night, which
obviously is not a very good value for taxpayers when you consider that you
could find other options that are considerably less expensive.
And in terms of the trailers, the numbers have not been
added up yet, but it's safe to say the government spent quite a few million
dollars on those contracts and did not end up using the trailers that they
RAY SUAREZ: Why are so many of the contracts let by this
government department non-competitive contracts, not put out to bid?
GRIFF WITTE: That's one of the really intriguing things about
this report. The report documents how the Department of Homeland Security has
contracted over the last three years, ever since its creation in 2003.
In the beginning, the department was using a lot of
contracts that were not fully competitively bid, but there was an understanding
that that was reasonable in some cases because the department was getting off
the ground. It was being created in a time of great national emergency, great
Now the department has had time to get its legs underneath
it, it has had time to work out how it's going to do its contracting, and yet
you see the value of these no-bid contracts and these contracts, where only a
limited number of firms are allowed to compete, you see the value of those
contracts actually going up. You do not see it going down. And it's actually
rising far faster than even the overall growth of contracting at the Department
of Homeland Security.
Answering to the taxpayers
RAY SUAREZ: Well, leaders of the Department of Homeland
Security were at today's hearings and testifying. What did they have to say for
the operation of their department?
GRIFF WITTE: They say that they're working on improving the
contracting. They say that they need time. They say that they want patience out
of lawmakers because this is a department that is new. It's only three years
When it was created, it marked the largest transformation of
federal government organization in the past half-century. And it really was a
very, very difficult operation. You had essentially the merger of 22 different
agencies all coming together, all with different ways of buying products and
services. And they just have not gotten out all of the kinks yet of that
process; they still have a system that is, in many ways, dysfunctional.
RAY SUAREZ: Well, you cover government contracting as part
of your beat in Washington,
and you mention all with different ways of buying things. FEMA existed before
the Department of Homeland Security. The Coast Guard did, Immigration and
Naturalization. Why did they move to such a large percentage of no-bid
contracts just because they were now under a different departmental umbrella?
GRIFF WITTE: Well, what they will say is that a lot of those
no-bid contracts came in the immediate aftermath of Katrina. And what you had,
essentially, was a situation where they had to move very quickly to respond to
the needs of the people who were displaced along the Gulf Coast,
and so they did not have the contracts in place that they needed.
They felt like they needed to act fast, and so they
essentially gave the contracts to the companies that they knew could do the job
or that they hoped could do the job without competition in many cases.
What critics have said since is that essentially the
department needs to have those contracts in place before the emergency strikes.
They need to have contingency contracts so that, the moment an emergency sets
in, they'll be ready, the companies will be ready, everyone will know what
they're doing, and the taxpayer won't get gouged, that the prices will be set
RAY SUAREZ: On the taxpayer gouging, did the DHS
representatives hold out any hope for the government to be able to recoup some
of the losses, either get the things that they bought properly, get the
services completed properly, or get money returned?
GRIFF WITTE: Well, I don't know that they have a whole lot
of hope of that, no. In some cases, as I mentioned, they are withholding award
fees, but overall a tremendous amount of money has been lost that is simply not
And what particularly concerns lawmakers is that they feel
that the Department of Homeland Security has not learned its lessons yet, that
essentially they have, in fact, ordered up a new contract for border security
that gives contractors a tremendous amount of latitude and essential tells the
contractors, "You tell us and the government how to do our business."
Lawmakers are very nervous that that contract is going to
lead to the same kind of mismanagement and waste that we saw in these other
contracts over the past three years.
RAY SUAREZ: Griff Witte of the Washington Post, thanks for
being with us.
GRIFF WITTE: Thank you, Ray.