GAO upholds contractor protest of DHS financial system award

The Transformation and Systems Consolidation program had been widely criticized.

The Government Accountability Office this week overturned the Homeland Security Department's award of a departmentwide financial management system to CACI, sources familiar with GAO's decision told Nextgov. GAO spokesman Chuck Young confirmed the agency's decision in an e-mail.

The audit agency is recommending that DHS issue a revised solicitation that better reflects its actual needs, accept modified proposals and conduct a new competition, the sources said.

Global Computer Enterprises, which had provided the Transportation Security Administration and the U.S. Coast Guard with Web-based financial management services, protested the contract award in November 2010, about a week after the department selected CACI for the work. The contract has a potential value of $450 million.

Over the past several years, the financial management system, known as the Transformation and Systems Consolidation program, or TASC, has drawn criticism from lawmakers, the Homeland Security inspector general and incumbent contractors who argued the project was poorly planned. It initially was expected to cost as much as $1 billion. The department intended to transfer existing financial management networks across its agencies to one central operation under TASC.

A July 2010 IG audit found department officials neglected to include all projected expenses in total life cycle-cost estimates for TASC, and had not completed key planning documents or staffing projections. House Democrats appealed directly to the White House to stop the project last summer. As far back as 2008, Savantage Solutions, whose financial management product is used in many DHS agencies, filed a complaint to prevent DHS from soliciting bids for the system.

Last summer, the Office of Management and Budget halted the development of all financial systems governmentwide to let agencies redraw designs for the historically costly and overly complex category of information technology projects. By fall, most agencies had either killed or narrowed the scope of their projects to the most critical functions so they could be deployed incrementally with less risk of failure.

Around this time, DHS announced it had decided to hire CACI for a slimmed-down version of TASC that, adhering to the new OMB rules, would be turned on in phases. Under the 10-year contract period, the project was to be divided into small task orders. DHS had planned to start by shifting the Federal Emergency Management Agency to the new system so that the department could perfect management practices before incorporating other agency networks.

Homeland Security officials were not immediately available to respond. GCE declined to comment.