BearingPoint feels the heat

Delays in two high-profile Homeland Security Department programs have prime contractor BearingPoint Inc. facing criticism from government and congressional officials. The Emerge2 program to consolidate DHS financial systems has been slowed by poor performance by the government and BearingPoint, said Andy Maner, DHS' chief financial officer and the business sponsor of Emerge2.The deadline for Transportation Worker Identification Credential, a program to provide secure credentials to U.S. transportation works, was extended by three months. The cost of the prototype phase of the contract has more than doubled from $12 million to $24.5 million, DHS said.The TWIC delay prompted Sen. Susan Collins (R-Maine), chairman of the Homeland Security and Governmental Reform Committee, to ask the Government Accountability Office to investigate. This delay "prolongs the time that critical transportation infrastructures are vulnerable to terrorist attack," she wrote.DHS officials have acknowledged problems with Emerge2, a two-year, $229 million project to build a consolidated financial services backbone for the department to serve its 22 component agencies. The department's Management Directorate under Janet Hale is reviewing Emerge2.But agency and BearingPoint officials said TWIC's cost increases and schedule extension resulted from unforeseen changes to the contract's scope, not from problems in BearingPoint's performance."The TWIC program is not delayed, experiencing quality issues or cost overruns," John Schneidawind, spokesman for BearingPoint of McLean, Va., said in response to written questions.A senior DHS official confirmed reports circulating for weeks in the vendor community that DHS officials have reviewed the possibility of issuing a "cure letter" to BearingPoint that would be a first step toward terminating the Emerge2 contract. DHS officials have discussed how to protect the government's interests in relation to the contract, the official said.However, Maner denied that he seeks to formally issue a cure letter to BearingPoint. "You do a cure letter when you have lost confidence in a vendor to proceed or deliver," he said. "I have not lost confidence." Asked about BearingPoint's performance on Emerge2, Maner said in an interview: "We definitely have been working with them on quality issues for the last six months." He declined to say how far behind schedule the project has slipped, but said that at the current rate, DHS and the vendor team would begin implementing it in 2006. "People are asking me every time I go to the bathroom: What is wrong with Emerge2?" Maner said. "I laugh, because we are just managing the program."Maner said DHS officials have decided to base the Emerge2 system on Oracle Corp.'s suite of database management system tools and that they are working with BearingPoint to decide how to implement the project."It's a make or buy decision," Maner said. "We can either build Emerge2 from the ground up or look at [systems already in place] at the Secret Service and the Coast Guard, and see how they implemented it."Maner defended the department's ap-proach in dealing with Emerge2 issues, saying that DHS officials are monitoring it daily. "I can tell you one thing for sure: We know our requirements," Maner said, responding to the concern that many software projects run into problems when requirements change. "The issue is that the government and BearingPoint need to perform better to get the department on a unified financial system," Maner said. "The Emerge2 program's end-state vision remains the same, and BearingPoint remains strongly committed to DHS and Emerge2," BearingPoint's Schneidawind said. He referred other questions about Emerge2 to the department.As for TWIC, both the department and BearingPoint defended the program schedule extension. TWIC is intended to provide hundreds of thousands of biometric identification cards to transportation workers to help control access to ports, airports and similar facilities. The credential program was budgeted at $50 million in fiscal 2004 and 2005, but it is expected to become self-supporting via user fees.In a written response, TSA spokeswoman Amy von Walter said officials had modified the TWIC schedule to take into account biometric standards mandated by Homeland Security Presidential Directive 12, which came in late August 2004, days after DHS awarded the TWIC contract to BearingPoint. The government extended the prototype phase by three months to June 30.Both von Walter and Schneidawind said the cost hikes occurred because DHS increased BearingPoint's scope of work on the TWIC prototype phase by adding procurement and installation of physical access control gear, as well as centralized card production and personalization services."Please remember that the responsibility for card production was a major deliverable and functionality added to our requirements in October 2004, and was originally to be performed by the government at a government-operated facility," Schneidawind said.Von Walter said the changes were made to address network security requirements and continuity of operations. "The contractor provided these services," she said.Patience Wait and Wilson P. Dizard III are staff writers with Government Computer News. Wait can be reached at pwait@postnewsweektech.com, and Dizard can be reached at wdizard@postnewsweektech.com.