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US lawmaker-Too much outsource in border contract
Thu Feb 8, 2007 3:37pm ET


WASHINGTON, Feb 8 (Reuters) - The amount of government outsourcing in the supervision of the multibillion-dollar Boeing-led U.S. border security project is troubling, the head of the House Oversight and Government Reform Committee said on Thursday.

More than half the Homeland Security Department staff members overseeing the project are private contractors, and some work for companies that are business partners of Boeing Co. (BA.N: Quote, Profile , Research), Rep. Henry Waxman, a California Democrat, complained at a hearing on large government security contracts.

"What we have learned is that there seems to be no task too important to be outsourced to private contractors," Waxman said.

Waxman and other members of the committee expressed concern that the Department of Homeland Security (DHS) lacks enough experienced staff to properly manage and oversee the Secure Border Initiative, or SBInet.

Boeing is leading a team that is building a "virtual fence" with sensors and cameras along the U.S. borders with Mexico and Canada to help control illegal immigration. Project costs have been estimated at $2 billion to $30 billion.

Richard Skinner, inspector general of the DHS, said about 65 of the department's 98 staffers responsible for overseeing the SBInet project are private contractors.

"On the surface, it does not look, in our opinion, that this project has sufficient departmental resources," Skinner told the panel. However, the DHS has had difficulty hiring and retaining government employees to oversee projects like SBInet because of the federal pay scale, he added.

Waxman said his committee received some 1,800 pages of DHS documents showing that some of the 98 staffers "even work for companies that are business partners of Boeing, the company they are supposed to be overseeing."

The DHS inspector general's office plans three audits of the SBInet program this year to assess contract administration, performance standards and other issues, Skinner said.

Jerry McElwee, a Boeing vice president assigned to the SBInet contract, told the committee that the project is on schedule and the first mobile tower should be operating by mid-June on the border near Sasabe, Arizona.

As the prime contractor on the project, Boeing intends "to inject competition into each task order to the maximum degree possible to insure we have the best value," McElwee said.

Both Republicans and Democrats on the committee said they worried that the government's dependence on private contractors to manage the SBInet project might result in the same kind of mishandling as a $24 billion DHS contract to build a new Coast Guard fleet.

That project, known as Deepwater and led by Northrop Grumman Corp. (NOC.N: Quote, Profile , Research) and Lockheed Martin Corp. (LMT.N: Quote, Profile , Research), has been dogged by delays, soaring costs and design flaws. Eight patrol boats had to be pulled out of service after being deemed unseaworthy and a new flagship cutter faces potential cracks in its hull.

Waxman said documents obtained by his committee showed that a Navy assessment of the new 425-foot cutter included warnings in red typeface that the vessel could not meet its target 30-year lifespan because of stresses on its components. However, the warnings were deleted when the documents were sent to the commandant of the Coast Guard a few months before the Coast Guard renewed and extended the Deepwater contract, he said.

"It would certainly appear they did not want to admit they were having flaws with the cutter," Skinner told the panel. "I can't say who (changed) them."