Is Accenture the Best Contractor for U.S.-Visit?

You no doubt caught the big news from the capital last week. No, not George Tenet resigning from the CIA. Im talking about the big business news that the Department of Homeland Security named Accenture LLP as the prime contractor for the next phase of its United States Visitor and Immigrant Status Indicator Technology (U.S.-Visit) program. Accenture LLP is the managing partner in the Smart Border Alliance, which includes Raytheon Co., the Titan Corp. and SRA International, Inc., and it was awarded a five-year contract with renewal options, worth up to $10 billion over 10 years. For that money, the group will undertake a massive integration and development program to track entry and exit of foreigners over all U.S. borders. The Accenture bid was for $72 million for the first year, and officials have not said that it was the lowest bid.

Whether it was or not, Representative Richard Neal (D-Mass.) called the decision outrageous. Neal points out that The Bush administration has awarded the largest Homeland Security contract in history to a company that has given up its U.S. citizenship and moved to Bermuda.

Accenture LLP is the Reston, Va.-based subsidiary of Hamilton, Bermuda-based Accenture. The company, formerly Andersen Consulting, incorporated offshore in 2002.

Besides Neal, Democratic Reps. Rosa DeLauro and Lloyd Doggett and Republican Sen. Olympia Snowe, who had sought a ban on awarding federal contracts to companies that relocate headquarters outside the United States in order to cut taxes, said they were disappointed by the contract award. Indeed, the companys Bermuda address has many lawmakers and citizens steamed, though supporters of the move emphasize that the contracting authority was awarded to the U.S.-based subsidiary, which employs 25,000 people in the United States and pays U.S. taxes on income generated in the country. Rep. Christopher Cox (R-Calif.), a member of the Select Committee on Homeland Security, told Lou Dobbs on CNN that Accenture paid 35 percent of its earnings from U.S. operations to the United States in taxes. Yet The Seattle Times reports that since 2001, the company has reduced its U.S. tax liability from $382.7 million to $143 million, even as its income from U.S. sources increased.

Some detractors have left the corporate nationality issue aside and simply disapprove of the program on the more basic grounds of ROI. That is, is it even possible to have one system track the approximately 359 million people who cross U.S. borders each year? Before the award was even announced, a New York Times story noted that some computer scientists and technologists had questioned the entire plan for virtual borders, pointing out that the government has a bad record in building computerized systems based on unproved technology. They also were wary of the discretion that DHS had given the bidding contractors in specifying the technology and capabilities of the system. Poorly defined contracts based on unproved technology have frequently been beset by problems and big cost overruns.

Other critics worry that even if the system does all it sets out to, it still will not catch terrorists or criminals who have a thus-far clean record. In short, whether the system achieves its goals or not, it could be a huge waste of money. Especially considering that the General Accounting Office has called it a very risky endeavor, and estimated that the final cost could reach $15 million.

U.S.-Visit began early this year, and 115 airports and 14 seaports now require visa-carrying foreigners to have fingerprints scanned and photos taken in order to come into the country. The mandate for Accentures contract is to have U.S.-Visit in place in the top 50 land border crossings by the end of this year, and at all 165 land border crossings by the end of next year. (It may soon extend tracking requirements to non-visa-carrying visitors, such as Canadians and Mexicans.) The program also requires integration of 19 existing government databases, all of different ages and configurations.

Texas Rep. Jim Turner, top Democrat on the House Homeland Security Committee, expressed concern that the contract gives unprecedented authority to a private contractor. Accenture says that because the system will in fact give inspectors unparalleled access to travelers personal information, it will create a chief privacy officer. Will that be safeguard enough? Marc Rotenberg of the Electronic Privacy Information Center (EPIC) doesnt think so. Says Rotenberg, It becomes less clear when the personal information is moved outside of the United States to another region of the world where the processing occurs, where the integration occurs, whether those privacy rules will be as vigorously enforced.

Another less cited concern surrounds one of the smaller partners in Accentures Smart Borders Alliance. According to New York Newsday and other sources, Titan Corp. of San Diego is among the companies identified by a U.S. military investigation as providing interrogators and interpreters at Abu Ghraib prison in Iraq, the scene of horrific prisoner abuse. Titan is also under criminal investigation by the Justice Department for allegedly paying bribes to obtain foreign contracts in Benin and Saudi Arabia.

Given all these thingsAccentures foreign parentage, the feasibility and cost-versus-benefit scenario of the entire project, the privacy issues, and the corporate reputations involveddo you think the assignment of completing the largest homeland security project in history ought to have gone to Accenture? Are you comfortable putting your personal and company tax dollars to work that way? Let us know.