Emerge2 program stalled

The Homeland Security Department's flagship back-office financial systems project has slipped its schedule more than two months and faces an uncertain future, vendor sources said.

The Electronically Managing Enterprise Resources for Government Effectiveness and Efficiency project, aimed at weaving together the financial, budget and asset control activities of the department's 22 component agencies, issued a proposal request in June.

The core of the project would be an enterprise resource planning system to merge the agencies' financial operations, DHS said at the time.

Program officials initially told vendors they expected to issue a contract in July. Bearingpoint Inc. of McLean, Va. and IBM Corp. lead the two vendor teams vying for the pact, industry sources said.

DHS first delayed the contract award until August. Recent department communications with the vendors indicate that DHS is not likely to issue a contract before the end of September, sources said.

Department officials have not told the two vendor teams their reasons for the delay.

"There really has been no communication," one source close to a vendor team said. "On these fast-track projects there needs to be communication."

A different industry source said DHS had built an ambitious plan for Emerge2 that would involve a contract amounting to about $100 million. But department officials did not succeed in assembling the funds for a project of that scale, the source said. DHS officials are reluctant to commit to a $100 million procurement for a non-mission-critical system before the November election, the source said.

Other sources in the vendor community noted that the delays in awarding the contract have prompted speculation that the project will be canceled.

DHS officials were not immediately available to comment on the progress of the Emerge2 effort.