How does a $2 million project end up costing the government $124 million? Just ask the Department of Homeland Security.
It all started in May 2003, according to a front-page story in the Washington Post, when the newly created department awarded a no-bid contract to consulting firm Booz Allen Hamilton to help it get its intelligence operation up and running.
Payments to the firm, one of the country's biggest government contractors, soared by millions of dollars a month, the Post says, reaching $30 million, or 15 times the contract's original value, by December 2004. At that point, DHS lawyers warned that the deal had gone "grossly beyond" estimates and advised the department to end the contract and allow other companies to bid for the work.
But it was more than a year before any competitive bidding took place. In the meantime, payments to Booz Allen more than doubled again, thanks to another no-bid deal, to $73 million. Finally, in spring 2006, DHS broke the work into five separate contracts, worth an additional $50 million, and solicited bids.
The winner of all five contracts? Booz Allen Hamilton.
How did it happen? The Post says the agency "routinely waived rules designed to protect taxpayer money" in its haste to meet congressional mandates. And as the work continued, DHS "became so dependent on Booz Allen that it lost the flexibility for a time to seek out other contractors or hire federal employees who might do the job for less."
Bold emphasis, mine
The Skinny, has more on other related issues.
This is typical Washington SNAFU, aka business-as-usual, but has reached heights bordering in space where the Sky Lab resides under the Bush Administration.
If you are a tax-payer and are concerned about controlling spending in government (local, state, federal) you have to push to OUTLAW no-bid contracting.
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