FEMA suspends TopOff

The Federal Emergency Management Agency has suspended a
procurement for the upcoming Top Officials (TopOff) 5 national
disaster drill to investigate allegations of improprieties in the
contracting process, said FEMA Administrator R. David Paulison.

Also today, Science Applications International Corp. said it has
withdrawn its bid on the Topoff 5 contract and has put several
employees on administrative leave while it conducts a review of the
allegations.

“We are reviewing the situation but we withdrew our
proposal because we want to assure the government of our intention
to perform in a completely ethical manner,” SAIC said in a
statement released by Laura Luke, spokeswoman.

The allegations were first aired publicly last month by Sens.
Joseph I. Lieberman, I-Conn., and Susan Collins, R-Maine, the chair
and ranking Republican, respectively, of the Senate Committee on
Homeland Security and Governmental Affairs. Paulison said their
description of the allegations was generally correct.

The lawmakers said a contractor who apparently wrote parts of
FEMA’s request for proposals for the Topoff 5 contract might
also be a bidder on the contract. If so, that would present an
unfair competitive advantage due to an organizational conflict of
interest, and possibly other ethics infractions. The senators also
said FEMA officials did not recognize the potential conflict nor
approve a mitigation strategy, such as firewalls, that would have
mitigated it.

The contractor has not been named, but sources identified it as
SAIC, which confirmed it submitted a bid for the Topoff 5 work.

Paulison, in a letter to Collins, said FEMA put a hold on the
procurement when it became aware of the allegations.

“When FEMA was first made aware of a potential compromise
of the process, FEMA suspended the procurement to allow for
appropriate review,” Paulison wrote to Collins in a July 31
letter. “The review is being completed and is both
procurement and personnel sensitive in nature.”

However, the circumstances do not reflect FEMA’s overall
procurement system but rather the actions of individuals who did
not perform their duties, Paulison said.

“They reflect the distasteful consequences that can occur,
even in a properly oriented procurement system, when persons in
positions of authority violate their responsibilities,” he
wrote.

In 2006, SAIC acquired Applied Marine Technology Inc., one of
five companies that received a TopOff contract from FEMA early that
year, according to market research firm Input Inc. That contract
had a combined value of $300 million.

“Upon learning of a letter dated July 16, 2008, from the
Senate Committee on Homeland Security and Governmental Affairs to
Secretary Chertoff of the Department of Homeland Security
concerning a potential conflict of interest, SAIC immediately began
an internal review,” reads SAIC’s statement.

“Pending the outcome of that review, we placed several
employees on administrative leave as of July 23, 2008. On July 23,
2008, we withdrew our bid for the TopOff 5 task order to remove any
on-going concern about unfair advantage,” the company
said.

SAIC said the employees were placed on administrative leave for
the purpose of “fact-finding” and the leave signals no
judgment about final outcomes.

Paulison said in his July 31 letter that FEMA has forwarded its
findings thus far to the Homeland Security Department’s
Office of Inspector General, which has been asked to further review
and investigate the matter.

In addition, FEMA is coordinating its review with DHS’
General Counsel and DHS’ Office of Procurement, Paulison
wrote.