Homeland Insecurity

The Homeland Security Dept.'s overreliance on outside contractors and insufficient management of them could leave the U.S. vulnerable

by Rachael King

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(Editor's note: This is the first of three stories on the challenges and opportunities faced by the Homeland Security Dept. as it develops technology aimed at keeping the U.S. safe.)

It was a game of "catch me if you can" with the U.S. Border Patrol—and the guards couldn't win. Just over a year ago, a man traveled by car along a stretch of Canadian road so close to the U.S. he could cross the border by hopping a roadside ditch. He stopped at what looked like an unmonitored area, left the car, and crossed over carrying simulated radioactive material in a red duffel bag. He walked several hundred feet into the U.S., returned to the Canadian side and waited 15 minutes for a response from law enforcement. None came.

The illegal crossing, carried out on Dec. 5, 2006, is one of three instances late last year when government investigators passed undetected into the U.S. from Canada, each time carrying packages that could have been, though weren't, contraband. All were part of a U.S. Government Accountability Office investigation into security vulnerabilities in unmonitored areas of the American border.

The Homeland Security Dept. is responsible for keeping the country safe from such breaches, and it has been spending billions of dollars on information technology to accomplish that mission. But the department's investments have come up well short of the country's needs, according to a growing chorus of critics. When you talk about the Department of Homeland Security, its not only a loss of money but it may well be a loss of our national security interests if we dont have the work done that needs to be done, says Rep. Henry Waxman (D.-Calif.), chairman of the House Committee on Oversight & Government Reform. All told, some $3 billion in information technology contracts, accounting for 60% of the agency's 2008 IT budget, are underperforming—whether because they're behind schedule, over budget, or lack a qualified project manager or definable parameters. In dollar terms, Homeland Security accounts for about half of the troubled government IT projects tracked by the Office of Management & Budget, which helps prepare the federal budget.

Those findings are based on a BusinessWeek.com examination of federal budgets, Congressional testimony, and more than 1,000 pages of government and industry reports. They also are the result of interviews with more than three dozen company executives, congressional legislators, government watchdogs, academics, and current and former agency officials.

Security Gaps Unaddressed

Critics point to an overdependence on outside contractors and a shortage of qualified program management and IT personnel at the department. Civilian shootings by Blackwater Worldwide guards have shone a spotlight on the military's reliance on contractors in Iraq, but the tendency is no less entrenched at Homeland Security, which became especially reliant on outside contractors in its haste to jump-start myriad projects in the aftermath of the September 11, 2001, terror attacks.

In many cases, contracts lack well-defined parameters and yardsticks for success, contractors are given too much leeway overseeing outside help, and many jobs are not put out for competitive bidding. The upshot: The U.S. does not yet have an effective technological means to secure the border between ports, can't keep close tabs on people who overstay visas, and has not improved a flawed system for screening airline passengers against a no-fly list. "When these contracts go awry, it's not just a question of millions of dollars or tens of millions or billions of dollars wasted, but it also means that the security gaps that those contracts are intended to address are left unaddressed," says Clark Ervin, who was the agency's Inspector General from January, 2003, to December, 2004.