Unisys accused of overbilling TSA

Unisys is responding to allegations that it overbilled the government for as much as 171,000 labor hours.

A report in the Oct. 23 Washington Post, based on audits that have not yet been publicly released, states that the company billed for labor at rates that were sometimes more than double what employees jobs should have been paid.

The allegations are related to Unisys' work as prime contractor of the Transportation Security Administration's Information Technology Managed Services Contract (ITMS).

In one example of overbilling the Post cited, the company billed TSA $131.12 an hour for a technical writer. The auditors believe the writer should have made no more than $46.43 an hour. According to the report, the excess billing went into Unisys' coffers rather than to individual employees.

In a statement Unisys issued today, the company said it is proud of its work with TSA.

"It is not unusual in complex government contracts for the government and the contractor to have issues arise regarding contract obligations," Unisys officials wrote in their statement. "Working collaboratively over the past few months, Unisys believes most of the issues are being addressed – to the initial satisfaction of our customer, TSA – and with the [Defense Contract Audit Agency's] review of the action plans. It should be noted that issues raised in the Washington Post article questioned a very small percentage of the total contract value. Unisys is working to resolve the remaining few issues, as well."

The DCAA audit has not been publicly released, and according to the statement, the company has not received it either.

Unisys noted in the statement that the ITMS contract was awarded in the hectic days immediately after the 2001 terrorist attacks. "The nation was in crisis, and there were enormous time pressures in meeting tight deadlines," the statement reads. The contract was awarded in August 2002.

However, ITMS has been a troublesome project all along. Earlier this year, Unisys reported that it had burned through two-thirds of the seven-year contract's $1 billion ceiling in only three years.

The news apparently is taking a toll on the company's stock. After closing Friday at $5.55 a share, the stock opened today at $5.20 and had fallen to $4.50 by 2 p.m.