Homeland Security Partnership Promoted by New Business Council

Within the defense industry there is widespread talk of a more expansive partnership between government and business. The new partnership defense contractors are promoting extends beyond the Pentagon and the armed forces – the traditional partners in the military-industrial complex – to the intelligence community and the Department of Homeland Security. Private contracting by DHS – averaging more than $12 billion annually – now forms a fundamental part of a new national security complex comprising corporations with major intelligence, military, and homeland security divisions. One sign of this broadened public-private partnership is the Homeland Security & Defense Business Council, which was created in 2004. The council says that it provides “a forum among the leading private-sector companies and senior federal government homeland security leaders to implement the administrative and legislative landscape dictated by the creation of the U.S. Department of Homeland Security.” Most of its members are traditional military contractors, including such corporations as Lockheed Martin, L-3 Communications, Northrup Grumman, Raytheon, and SAIC. Marc Pearl, the business council’s president and CEO, told Congress that the council fosters the public-private partnership in Homeland Security because this “partnership provides our government with the ability to access the best solutions and capabilities to achieve mission success – a safer and more secure nation.” Partnership Includes Former Homeland Security Officials But the partnership goes beyond simply entering contracts with DHS. The council also populates its advisory board with former DHS officials. The seven members of its advisory board were formerly all in top positions at DHS and are now all involved in the booming homeland security business. Council advisor Andrew Manner, the current CEO of the National Interest Security Company, was, for example, the former chief financial officer at DHS. As part of the kind of partnership fostered by the business council, NISC (which has intelligence, homeland security, and defense divisions) was awarded an $8.8 million infrastructure-protection contract in October by DHS. The partnership was also on show at the council-sponsored Partners in Preparedness Symposium in September, where the featured speaker was former DHS Secretary Michael Chertoff. Now director of the Chertoff Group, which specializes in bringing security “providers” together with DHS and the Pentagon, the outgoing DHS chief Chertoff was honored in December 2008 with the council’s Distinguished Service Award. According to council president Pearl: “Secretary Chertoff has established incredible working relationships with all sectors involved in homeland security and our nation is the better for it. From the integration of the Federal Emergency Management Agency into DHS, to stopping up our porous borders, to improving tracking of the people and products entering the country, he has done a tremendous job to assure that the nation can go about its business safely and securely." The DHS’ sorry record of emergency preparedness and private-sector waste under Chertoff’s tenure apparently does not figure into the council’s concept of an effective public-private partnership. Waste, Abuse, and Mismanagement Since the beginning DHS has proved unable to manage the partnership with industry, as documented by a continuing series of reports by the General Accounting Office and the department’s own inspector general. These problems were highlighted at a special hearing last year of a subcommittee of the House Committee on Homeland Security. The hearing, titled “Waste, Abuse, and Management: Calculating the Cost of DHS Failed Contracts,” In its announcement for the hearing, the Subcommittee on Management, Investigations, and Oversight expressed its wrath and frustration at DHS’ continuing inability to properly oversee its private sector contracts: “Billions of dollars have been spent on contracts for programs that have been delayed, deferred, and/or discontinued resulting in a waste of taxpayer money. Unfortunately, the wasting of these funds was not haphazard or as a result of conditions that could not have been foreseen. On the contrary, the Department has failed to implement a “lessons learned” approach, which has resulted in the same mistakes being made over and over again. The financial cost of DHS failed contracts, as illustrated below [see chart], is close to $15 billion. However, this figure only represents the failed contracts illustrated herein. There have been numerous other contracts that have been delayed, discontinued or deferred after millions of dollars have been spent. The financial cost; however, does not take into consideration the cost to our homeland security.” Statements by subcommittee members, as well as by Homeland Security Committee Chairman Bennie Thompson (D-Ms.), lambasted the DHS for its lack of oversight and its practice of having private contractors monitor other private contractors. Introducing the hearing, subcommittee chairman Christopher Carney (D-Pa.) said that a “broken acquisitions process at DHS” sparked the hearing. “Tens of millions have been paid out to contractors for what amounts to nothing more than bad ideas and empty promises,” he complained. Rep. Thompson told the hearing that the DHS partnership with the homeland security industry had resulted in: “$5 million-dollar-a-mile fences; TWIC [transportation worker identification credential] cards that can’t be read; ships that don’t fit into ports; formaldehyde soaked trailers that make the occupants sick, and an information-sharing program that law enforcement personnel do not want to use. Taxpayers have had enough. Americans deserve a country that is safe, secure, and ready to respond in the event of a natural or man-made disaster.”

Problems and Costs of DHS Contracted Programs _______________________________________________________________ SBInet (Boeing) Lack of Defined Requirements; Wasteful Spending; Mismanagement; Poor Contractor Oversight $1.549 billion Secure Flight (Lockheed Martin, IBM, MITRE, EagleForce, et al.) Lack of Defined Requirements, Mismanagement, Legal Noncompliance $200 million Deepwater (Lockheed Martin & Northrop Grumman) Lack of Defined Requirements; Wasteful Spending; Mismanagement; Poor Contractor Oversight $351.1 million EMERGE2 (Bearing Point) Lack of Defined Requirements; Wasteful Spending; Mismanagement 18.3 million TWIC (Lockheed Martin) Lack of Defined Requirements; Wasteful Spending; Mismanagement $103 million HSIN (General Dynamics) Lack of Defined Requirements; Mismanagement; Poor Contractor Oversight $91 million ADVISE (Lawrence Livermore Labs) Lack of Defined Requirements, Mismanagement, Legal Noncompliance $42.5 million US VISIT (Accenture et. al.) Lack of Defined Requirements; Wasteful Spending; Mismanagement $10 billion Temporary Housing for Katrina Evacuees (Bechtel National, Inc., Fluor Enterprises) Mismanagement, Wasteful Spending $200 million Test and Hire Airport Passenger Screeners (NCS Pearson, Inc.) Lack of Defined Requirements; Wasteful Spending; Mismanagement $741 million Installation of Baggage Screening Machines (Boeing) Wasteful Spending, Mismanagement $1.2 billion

___________________________________________________________________ Source: Subcommittee on Management, Investigations, and Oversight, House Committee on Homeland Security, Sept. 17, 2008 Greater Innovation Not Restrictions In the face of increasing evidence that the private-public partnership at DHS has been abused and that many billions of dollars flowing into the new department have been plundered by the private sector, the Homeland Security and Defense Business Council -- the leading voice of the private sector in homeland security issues – is unrepentant and instead calls for more cooperation. At the September 2008 House hearing on DHS waste and mismanagement in private contracting, council president Pearl advised that Congress and DHS shouldn’t reduce their reliance on the homeland security industry. Nor should it introduce an oversight process that alienates the private sector. “New restrictions on government contracting won’t make our borders safer; greater innovation will,” asserted Pearl. “It would be extremely detrimental to our nation for the private sector to walk away,” said Pearl. “That would only lead to failure for both DHS and our nation.” Without acknowledging that too often homeland security contractors – such as Lockheed Martin and Accenture – have failed to deliver promised goods and services, Pearl pointed out in his testimony that council “members are responsible for the operational component of a contract – serve as a resource to this Committee and the Department.” Pearl recommended a deepened partnership in which the Homeland Security and Defense Business Council – “as a neutral but very interested actor” -- would function as “a conduit between the public and private sector to achieve these goals of reform.” Aside from directly promoting the interests of homeland security/defense businesses, the council is, among other things, cosponsoring a homeland security certification program at Georgetown University, which now offers a certificate in Homeland Security Studies. The council also has a Thought Leadership Committee that works to ensure that the private sector’s views on homeland security contribute to public policy discussions. Among council members are such leading government contractors as Accenture, BAE Systems, Bechtel, Booz Allen Hamilton, CACI, Deloitte, DRS Technologies, DuPont, DynCorp, General Dynamics, IBM, L-3 Communications, Lockheed Martin, Northrup Grumann, Raytheon, SAIC, and Unisys. Next: Privatizing Homeland Security