HENRY A.

WAXMAN, CALIFORNIA TOM DAVIS, VIRGINIA

CHAIRMAN RANKING MINORITY MEMBER

ONE HUNDRED TENTH CONGRESS

$@ou$eof fRepre$entatibe$
COMMllTEE ON OVERSIGHT AND GOVERNMENT REFORM
2157 RAYBURNHOUSEOFFICE
BUILDING
DC 20515-6143
WASHINGTON,
Majoriiy (202) 225-5061
Minority (202) 225-5074

MEMORANDUM

February 8,2007

To: Members of the Committee on Oversight and Government Reform

From: Majority Staff

Re: Additional Information about the SBInet Contract

In preparation for today's hearing on Deepwater and SBInet, the Committee received
approximately 1,800 pages of documents from the Department of Homeland Security related to
SBInet, the Department's $30 billion contract with Boeing to design and build a comprehensive
border security plan. Some of the documentary evidence received by the Committee raises new
questions about the Department's reliance on support contractors to manage the SBInet program.

The SBInet program relies on Boeing as the "prime integrator." Under a prime integrator
contract, Boeing is responsible for conceptualizing, designing, building, and operating a multi-
billion dollar border security solution. Because the contract vests so much authority in a private
contractor, the contractual arrangement requires strong oversight by government officials. A key
question is whether the government has an adequate federal workforce to perform this critical
oversight function.

The documents and information received by the Committee indicate that the Department of
Homeland Security has decided to contract out most of the oversight function. It appears that
private contractors hired by the Department played leading roles in (I) contract planning and (2)
contract award, and will now constitute the majority of the staff engaged in (3) contract
management and oversight. In at least one instance, a private contractor hired to assist in
contract oversight appears to have significant conflicts of interest.
I. RELIANCE ON CONTRACTORS

Typically, government officials have the responsibility to develop project requirements and
oversee work done under contract. In the case of SBInet, however, it appears that the
Department of Homeland Security has relied on private contractors to plan, award, and manage
the SBInet contract program.

Contract Planninq: According to material provided to the Committee by the Department, 13

individuals participated in the development of the acquisition plan for SBInet. Of these 13
individuals, eight - over 60% -were identified as contractors.1

According- to the Secure Border Initiative (SBInet) Acauisition Plan. the contractors hired bv the
Department to engage in contract planning'worked forAcquisition solutions, Inc. (ASI),
Contracting Strategies, Inc. (Stratecon), MITRE Corporation, Organizational Strategies,
- Inc.
(OSI), and Performance Management Consulting, 1nc. (PMC).~ -

Contract Evaluation and Analysis: The Request for Proposal (RFP) for the SBInet contract
advised all potential offerors that DHS would use private contractors for "proposal
evaluation/analysis," which is a key component of the contract award d e c i ~ i o n . ~

According to the RFP, the contractors hired by the Department to engage in contract evaluation
and analysis included ASI, Stratecon, Digital Intelligence Systems Corporation (Disys), Johns
Hopkins University-Applied Physics Laboratory (APL-JHU), MITRE, OSI, and P M C . ~

Program Management: The SBInet contract program is now managed by a staff dominated by
contractors. As of December 2006, the Department had assigned 98 personnel to the SBInet
project office. Of these 98 individuals, 60 were identified as contractor^.^

DHS projects an increase of 75 government personnel and 97 contractors over the coming year,
so that there will be 270 personnel engaged in oversight activities at the end of fiscal year 2007.
According to this projection, even at its full complement, nearly 60% of the project management
office will be contractor^.^

1
U.S. Customs and Border Protection, Secure Border Initiative (SBltzet)Acquisitioiz Plan
for an htegratiorz Contract HSBP-06-010 Versiotz 1.0 (Mar. 30,2006) (See Appendix A).
2
Id.
U.S. Customs and Border Protection, Request for Proposal (Apr. 11,2006) (See
Appendix B).
Id.
U.S. Customs and Border Protection, SBInet Expenditure Plan (Dec. 4,2006)
(Appendix C).
Id.
The Department of Homeland Security has provided the Committee with a list of 50 contractor
personnel currently involved in contract oversight and management. These contractors are
employed by ASI, Booz Allen Hamilton, MITRE, OSI, PMC, Robbins-Gioia, and ~ t r a t e c o n . ~

These "contract support" contracts are now among the most lucrative awarded by DHS. In 2005
alone, Booz Allen Hamilton received over $97 million from the Department. Along with Booz
Allen, MITRE Corp. ($47 million), PMC ($22 million), and Robbins Gioia ($21 million) were
among the top 100 recipients of DHS contracting dollar^.^

11. POTENTIAL CONFLICT OF INTEREST

At least one contractor hired to engage in contract oversight, Booz Allen Hamilton, may have a
conflict of interest with Boeing Corp.

In 1993, Booz Allen teamed with Boeing to begin a sustained, multi-year program to help
Boeing remain at the top of the airplane industry. According to the company's website, Booz
Allen has had an "extensive" relationship with Boeing since 1970. One Booz partner, Ed Frey,
has touted the "personal relationships ... from the group president to people on the shop floor"
that Booz Allen has built with ~ o e i n ~ . ~

One example of Booz Allen's ongoing relationship with Boeing is its collaboration with Boeing
on the Battle Management Command and Control Subsystem of the Air Force Multi-Sensor
Command and Control Aircraft program. In September 2003, the Air Force announced that
Boeing received an initial $4 million contract to define requirements for the subsystem. Booz
Allen, a member of Boeing's team, was awarded the subcontract to provide CAIV capability
along with modeling and simulation capability.'0

U.S. Department of Homeland Security, List of Nanzes aizd Employers of All

Departmelzt Persoizizel (delivered Feb. 2, 2007) (See Appendix D).
* This data comes from the Eagle Eye Federal Prime Contracts Database, a federal
procurement database application published by Eagle Eye, Inc. The database contains data from
1999 to 2005 that is compiled from the Federal Procurement Data System, the federal contract
tracking system established by the General Services Administration.
~ o o Allen
z Hamilton, Case Studies: Boeing Cominercial Airplane Group-Staying
Above the Competitiotz (online at www.boozallen.com/capabilities/Industries/industries~
articlel658246).
'OBoeing, News Release: Boeing Awarded Battle Managemerlt Comnzand and Control
Subsystenz Contract (Sept. 17, 2003) (online at www.boeing.com/news/releases/2003/q3/nr~
030917n.html).
 E. Participants in Acquisition Plan Development
Appendix A
Table 6. Participants

~ssociate CBP-OBP @dhs.aov

Chief
Chief of the CBP- @dhs.aov
Contracting OFlProcurement
Office

Contractor OSI @associates.dhs.aov

t I
Contractor
I
MITRE Corp
I
@rnitre.org

Contractor
I cOrp I
I
I

Contractor MITRE Corp @rnitre.org

I I
I
I
Contractor MITRE Corp @rnitre.org
I I I
Contracting CBP- @idhs.aov
Officer OFlProcurement
Contract CBP- @dhs.aov
Specialist OFlProcurement
Contractor Stratecon @dhs.qov
I I
Contractor Acquisition @acquisitionsolutions.com
Solutions
Contractors PMC @ipmc.com
j

Source: U.S. Customs and Border Protection, Secure Border Initiative (SBlnet):
Acquisition Plan for an Integration Contract (HSBP-06-010)(redacted)
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 Expenditure Plan . . , FOR 0FPiClALUSE.ONLY Discussion

Appendix C
The following chart shows the CBP SBI current personnel status and the projected staff at the
end of FY 2007, with a focus on the SBInef PMO.

Figure 8 - SBI Personnel by Activity

I
--Program Manager 1
- Staff 12 20 . lo I is
I
I i I I 1
SBInei Projects / 4 / 9 1 9 14 1 36
i I I I I
I I I I t
Mission Engineering ~ivisionl 3 . 1 2 1 7 4 1 16
i I I I I

t Chief Engineer 1

Facilities & Infrastructure

I8
I
4

I-
1
II
16

3
. I
II
1
I9

7
I
II
2s
5
1I
I
1
67

16
I I I I
I I I I I
Integrated Logistics Support 1 2 / 0 1 6 4 I I2

* Increases projected by September 30,2007

Lepislaive Requirement #S- Includes a eertificaUaUonbv the ChiefProcurement Offcerofthe

~ e j a r t m e nof~omeland~ecurity
t that procedures to.&event cor;fica of interest between the
prime integrator and major subcontmcfors are estnblished

2.8 Chief Procurement Officer Certification

The certification is included as Appendix A.

Legislarive Requiremrnr b6 - Includer a certi/ication by thu Cltiufinformation Officer of rhe

Depanwtenr ofHontrlund Secur*). that an indeprndenr verificatio,~and validution age181i s
currently under corriraetfor ths,nrs,ic~t . . ., :

2.9 Chief ~nformationOfficer Certifjsaiioo

The certification is included as Appendix B.

CBP SBlnel Program FOR OFFICIALUSEONLY 14