Lawmakers balk at US-VISIT award

The Homeland Security Department's multibillion-dollar foreign visitor tracking system could face significant delays if an amendment to bar contracts to companies not based in the United States becomes law.

The amendment to the fiscal 2005 DHS spending bill would close loopholes that allow corporations such as Accenture, the prime contractor for the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program, that are based overseas, thereby avoiding U.S. taxes. The provision is sponsored by Reps. Rosa DeLauro (D-Conn.) and Marion Berry (D-Ark.).

Opponents of the amendment hope to defeat the provision when the bill comes to the floor, which could happen, as soon as this week. Rep. Jim Moran (D-Va.) said that either he or Rep. Tom Davis (R-Va.) will seek to block the provision.

David Marin, a spokesman for Davis, declined to discuss efforts to defeat the amendment, but he said he "readily [acknowledges] that Chairman Davis thinks this is wrongheaded, protectionist, politically motivated language."

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, and DHS spokeswoman Kimberly Weissman reiterated last week that the department adhered to procurement regulations in making the award.

"Based on a review of the bids by DHS legal counsel, all bidders were U.S. companies under the law and qualified to bid on the contract," she said.

Accenture officials say the company is based in the United States, employs 25,000 people and pays U.S. taxes. They also said the parent company was originally based in Bermuda and did not move to avoid taxes.

"As a global company, Accenture pays, and has always paid, our fair share of taxes in each of the countries in which we generate income, including the United States," Accenture spokesman Jim McAvoy said in a statement responding to the amendment. "Preventing the most qualified company, whether it is a global company or its U.S.-based subsidiary, from bidding on government contracts rejects the free-market principles of the federal procurement system."

Ray Bjorklund, vice president of consulting at Federal Sources Inc., a McLean, Va., market research firm, compared the panel's 35-17 vote to a protest from competing company, which could stop work on the project.

Bjorklund said he doubted that the amendment would become law. He questioned why Congress didn't raise questions earlier, when the field of potential bidders narrowed to three teams.

If the provision becomes law, Moran said it would set a dangerous precedent that would undermine the way the government procures contracts.

"This was about politics," he said. "I am afraid that what is a very important activity, which is to secure our borders, is going to be interminably delayed as a result of this vote."

By holding back funding for the program, Congress could slow the development of US-VISIT or prompt DHS officials to terminate the contract, said Jonathan Aronie, an attorney who specializes in procurement.