EMERGE2's failure sends DHS back to drawing board

The Homeland Security Department’s acting chief financial officer said it’s back to the drawing board after the failure of a high-profile project intended to establish a single enterprise financial and asset management system for the 22 agencies that make up DHS.

DHS officials awarded a blanket purchase agreement – potentially worth up to $229 million – to BearingPoint in fall 2004 for the Electronically Managing Enterprise Resources for Government Efficiency and Effectiveness (EMERGE2) initiative. But last year they scuttled the project after officials found it wasn’t going in the right direction and was too risky to continue.

Eugene Schied, the acting CFO, said the department had spent $18.3 million before it found the project was unworkable. He said DHS officials have abandoned the notion to rebid the contract.

“I don’t see there’s going to be another,” he told congressional lawmakers at a hearing yesterday afternoon.

Instead, DHS officials will now go through a replanning phase that will look at several viable alternatives, including initiatives several DHS agencies have undertaken. For example, Customs and Border Protection had been implementing an integrated suite of SAP resource management systems, and the Coast Guard and Secret Service were upgrading their systems during the EMERGE2 project.

Schied said the Coast Guard also became a service provider to the Transportation Security Administration in 2005 because TSA officials were unhappy with the Transportation Department’s system. He said the new arrangement seems to work well.

DHS officials hope to present a plan to the department’s Investment Review Board, which must analyze major information technology initiatives, in May or June, Schied said. He estimated the new system would cost $150 million to $200 million because it would contain similar elements to EMERGE2, such as costs associated with cleaning up data and implementing a data warehouse.

Scott Charbo, DHS’ chief information officer, said EMERGE2 wasn’t a total waste. He said the requirements developed for the project could be used in any future development.

DHS officials appeared at a joint hearing of the House Government Reform Committee’s Government Management, Finance and Accountability Subcommittee and the House Homeland Security Committee’s Management, Integration and Oversight Subcommittee.

Several lawmakers were dismayed about the millions of dollars spent on the failed project.

“I am just shocked about the repetitiveness that just keeps coming up about expenditures,” said Rep. Sheila Jackson Lee (D-Texas). “I know this is just one particular area.”

Representatives were also concerned about departures of several DHS executives, which could have led to general problems and the issues with EMERGE2.