TopOff 5 competition raises possible conflict of interest

Two key senators have alleged that Federal Emergency Management Agency officials are ignoring a potential conflict of interest and other possible ethics violations with regard to a multimillion-dollar contract for the upcoming national Top Officials 5 anti-terrorism exercise.

The lawmakers are concerned that a contractor who apparently wrote parts of FEMA's request for proposals for the contract might want to bid on it. If so, that would present an unfair competitive advantage and possibly other ethics infractions, said Sens. Joseph Lieberman (I-Conn.) and Susan Collins (R-Maine) in a July 16 letter to Homeland Security Secretary Michael Chertoff.

The senators do not identify the contractor in the letter. However, sources close to the matter say the company is Science Applications International Corp., which in 2006 acquired Applied Marine Technology Inc., a company based in Virginia Beach, Va., that worked with FEMA on previous TopOff drills. In early 2006, AMTI was one of five companies that received a TopOff 4 contract with a combined value of $300 million, according to Input Inc., a market research firm in Reston, Va.

Although SAIC declined to comment on specific allegations, officials are conducting an internal review of the matter, said Laura Luke, a company spokeswoman. She confirmed that SAIC has already submitted a bid for the TOPOFF 5 contract.

In their letter, the senators say that under federal acquisition rules, having the contractor that helped write the RFP also bid on the project would present an organizational conflict of interest. Creating various firewalls between the company divisions or other strategies could have mitigated the situation.

But the senators contend that FEMA officials did not recognize the potential for a conflict of interest or develop a strategy to mitigate it.

"We are particularly concerned that steps were not taken to prevent conflicts of interest that should have been readily identifiable under the circumstances," the senators wrote. Lieberman and Collins are chairman and ranking member, respectively, of the Homeland Security and Governmental Affairs Committee.

They asked Chertoff to review the matter and investigate concerns about a contractor improperly performing an inherently governmental function by assisting in writing the RFP.

"Considering the significance of this program, these mistakes raise serious questions as to the effective controls FEMA had in place to manage this RFP," Lieberman and Collins wrote.

According to the senators, companies reviewing FEMA's RFP found electronic code embedded in the document that indicated at least parts of the document had been prepared by a contractor. The companies were not aware of the contractor's involvement until they discovered the code, the senators said.

"It appears that the contractor's participation in this RFP may have violated federal restrictions governing the performance of inherently governmental functions or, at least, that FEMA employees managing this RFP failed to perform appropriate oversight," the senators wrote.

Lieberman and Collins also asked Chertoff to investigate reports that a FEMA contracting officer involved with the RFP might be a former employee of the contractor in question.

"If the FEMA employee primarily responsible for oversight for this RFP was a former employee of the assisting contractor, 'reverse revolving door' concerns may also be implicated," the senators wrote.

The employee is not named in the letter. However, sources said Bill McNally, director of FEMA's National Exercise Division, which oversees the TopOff drills, once worked at SAIC. Company officials confirmed McNally's former employment but offered no further comment. McNally did not respond to a request for comment.

FEMA officials also did not respond to requests for comment by press time.