GAO: SBI so far nets Boeing more than $1B

Originally posted June 30 and updated July 1

Boeing Co. has received more than $1 billion ? an amount higher than what was previously disclosed ? for work on the Secure Border Initiative system that it is installing along the Mexican border in Arizona for the Homeland Security Department, according to a new report from the Government Accountability Office.

From September 2006 to January 2008, the Customs and Border Protection agency awarded $1.15 billion through eight task orders to prime contractor Boeing for SBI, which is the overall project, and SBInet, which is the fencing and electronic surveillance system component, the GAO report states.

That sum is substantially more than what has been publicly disclosed to date. The newly disclosed items include $733 million for a supply chain management system awarded in January.

Customs and Border Protection spokesman Barry Morrissey said July 1 that the supply chain contract amount of $733 million, as reported by GAO, was based on an initial estimate that was later revised downward. The task order awarded to Boeing for SBI supply chain management was for $303 million, with a performance period through the end of December 2008, he added.

According to Morrissey, existence of the supply chain task order, but not its value, was disclosed in a CBP public newsletter, and the order was discussed at several industry events.

Under the task order, Boeing will ensure that steel fencing materials will be available to keep up with construction along the border, and will ensure that all materials comply with the Buy American Act, he added.

CBP initiated the task order because it was paying more than it had anticipated for steel fencing due to high demand in the market, Morrissey said. The supply chain task order is expected to result in cost savings due to reducing resource, transportation and storage costs, he added.

Other SBI and SBInet task orders include $136 million for overall project management, $122 million for physical fencing, $69 million for SBInet solution design and $20 million for the Project 28 prototype installation of SBInet.

In the 110-page report, GAO reviewed the government's fiscal 2008 SBI expenditure plan. GAO said that of the 15 legislative conditions set by Congress, the plan meets seven of them, partially meets another seven and fails to meet one.

The conditions relate to the schedule, costs and benefits of the SBI program and its activities.

According to GAO, the fiscal 2008 SBI expenditure plan does not meet all congressional requirements. "Based on our review, while the 2008 plan is more detailed than the 2007 plan, it does not provide detailed justification for all planned SBI expenditures, nor does it permit progress against program commitments to be adequately measured and disclosed," the GAO report states.

"In addition, the 2008 plan does not clearly demonstrate how specific CBP SBI activities link with the DHS Secure Border Strategy and further the objectives of DHS' overall border strategy, nor does it provide Congress with reasonable assurance that funding is used for the highest priority requirements," the report states.

Department officials agreed with GAO's recommendations and submitted additional information that GAO said it had not had time to review. The additional information suggests that DHS is moving forward on additional recommendations.

GAO also noted concerns that DHS conditionally certified the SBInet system architecture in March using out-of-date documents. DHS' chief information officer certified that the system is aligned with the department's information technology enterprise architecture.

The SBI project, which includes SBInet, is one of the largest DHS contracts, with a projected cost of more than $30 billion to cover land borders with Canada and Mexico. It has been controversial because of delays, technology and performance concerns, and privacy concerns.

Here is a timeline of the eight task orders awarded to Boeing.
  • September 2006, SBI Program Management, $136 million.

  • October 2006, Project 28 prototype, $20 million.
  • January 2007, Physical fencing, $122 million.
  • March 2007, Fence development laboratory, $700,000.
  • August 2007, SBInet design, $69 million.
  • December 2007, Project 28 maintenance support, $8 million.
  • December 2007, Command, control, communications, intelligence and common operating picture, $65 million.
  • January 2008, Supply chain management solution, $733 million.

Boeing officials did not respond to requests for comment.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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