Committee shields Accenture deal

U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) Web page

Lawmakers who are attempting to block Accenture from getting a $10 billion homeland security contract lost the first round in their effort to prevent the deal from going to the company with an offshore parent.

According to a congressional staffer close to the issue, the House Rules Committee this week chose not to keep part of a proposed amendment to the homeland security appropriations bill that would prohibit the Homeland Security Department from signing certain task and delivery contracts, such as Accenture's deal as the prime integrator of the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program. That part of the amendment, aimed at companies based overseas, was not protected by the Rules Committee and will likely be removed when the appropriations bill goes to the House floor for debate, the staffer said.

However, the Rules Committee kept a section that eliminates a clause in the Homeland Security Act of 2002, which states that a company based overseas before the law passed could still receive homeland security contracts. Removing that clause means companies such as Accenture might not be eligible for future contracts, the staffer said.

"The Accenture contract right now looks relatively safe," the staffer said. "The [removal of the] grandfather clause, on the other hand, means that will be last such contract of its kind."

Reps. Rosa DeLauro (D-Conn.) and Marion Berry (D-Ark) sponsored the amendment. Debate over the rule is expected to occur on the House floor today.

Although the original amendment is not likely to make it through the House, lawmakers could still try to bar the contract when House and Senate negotiations hammer out the final bill.

DeLauro had sent a letter to the Rules Committee earlier today, urging them to protect the amendment that would close loopholes in the Homeland Security Act that allow homeland security vendors to have shell corporations outside the United States. Berry and two other Congress members signed the letter.

"I believe that once this issue reaches the House floor, we will see an overwhelming victory for taxpayers," DeLauro wrote in the letter. "It is wrong to reward companies who have purposely set up elaborate tax systems in foreign countries to avoid paying U.S. taxes with billions of dollars in taxpayer-funded government contracts."

Opponents of the amendment had planned to defeat the provision when the bill comes to the floor, which is expected to happen June 16. Rep. Jim Moran (D-Va.) said that either he or Rep. Tom Davis (R-Va.) will seek to block the provision.

DHS officials awarded the contract June 1 to Accenture LLP, which is based in Reston, Va. The parent company, however, is headquartered in Bermuda.

Lawmakers raised concerns about Accenture's Bermuda headquarters at the time of the award, but DHS officials have repeatedly said that the department followed procurement regulations.

Accenture officials say the unit that actually won the US-VISIT deal is based in Virginia, employs 25,000 people and pays U.S. taxes on income generated within the country. But the parent company has been based in Bermuda since inception, and does not pay U.S. taxes on income from outside the United States.