OIG-06-23, Transportation Security Administration's Information Technology Managed Services Contract



The Office of Inspector General (OIG) reviewed Transportation Security Administration’s (TSA) contract with Unisys Corporation (Unisys) for Information Technology Managed Services (ITMS) in response to a request from Congressman Don Young, Chairman, Committee on Transportation and Infrastructure, U.S. House of Representatives. Specifically, Congressman Young requested answers to the following questions:

  1. How are the contract and related task orders set up, including how much the government has paid and what services and/or products have been received?
  2. How do those actual services and products received compare to what was planned?
  3. How is contractor performance under these task orders measured and how is the contractor performing under these measures?
  4. How does TSA ensure appropriate use of small businesses?
  5. How does TSA ensure appropriate use of new technology through this contract?

In 2002, TSA started the rollout of security operations at airports under congressionally mandated short timeframes with significant budget constraints. To quickly establish an information technology and telecommunication infrastructure needed to support its employees at headquarters and airport locations across the United States, TSA awarded a $1 billion contract to Unisys using a broad statement of objectives to describe the requirements. At the time of award, the TSA Office of Information Technology (OIT) and Contracting Office had small staffs overseeing numerous high value acquisitions, including the Unisys contract.

By the beginning of Fiscal Year (FY) 2006, TSA spent most of the contract ceiling without receiving many of the contract deliverables critical to airport security and communications. The following discussion references the questions posed by Congressman Young.

  1. Contract Cost and Structure - TSA’s OIT projected that, by the beginning of FY 2006, its total costs on the Unisys contract would exceed $834 million. The original contract including option years was to run through FY 2009; therefore, 83 percent of the contract ceiling has been expended in less than half of the allotted time. TSA awarded a Statement of Objectives (SOO) contract in August 2002, but did not receive FY 2003 funding at anticipated levels. OIT issued numerous requests for specific tasks and deliverables, but did not always ensure that technical proposals included all of the required contracting elements such as statements of work with delivery due dates and acceptance criteria.
  2. Planned Versus Actual Costs and Deliverables - Although actual contract costs exceeded planned contract costs, TSA did not receive all planned contract deliverables. TSA attributed most of its setbacks to budget cuts, understaffing, and changing or increasing requirements. TSA officials said that they originally estimated that the contract could exceed $3-5 billion, but set the contract ceiling at $1 billion. In its response to our draft report, TSA said that the $1 billion ceiling was based on specific requirements but could not document which specific requirements.
  3. Performance Measures and Contract Performance - TSA did not have adequate performance measures on the Unisys contract two years into the contract. Performance measures have evolved and improved over the life of the contract through TSA’s efforts to improve them, but performance measures were limited to a small portion of contract work and were added too late in the contract cycle to be effective in assessing the contractor’s performance.
  4. Appropriate Use of Small Business - Unisys use of small businesses is appropriate. TSA has taken an aggressive approach to ensure that Unisys complies with small business subcontractor management responsibilities.
  5. Appropriate Use of New Technology - TSA did not provide airport Federal Security Directors (FSDs) with all of the high-speed connections needed to obtain and transfer data and email necessary for their business operations. FSDs told us they were dissatisfied with the low level of technology in the equipment provided by TSA.

In our draft report, we recommended that TSA terminate the current contract at the end of the base period and re-bid the contract, and implement procedures to ensure that future contracts are procured with proper controls. TSA concurred with the recommendations and has developed a new acquisition strategy for information technology services. This strategy identified some work previously performed by Unisys for immediate competition, and allows for future competition as opportunities are identified. On December 30, 2005, TSA awarded a ‘bridge’ contract to Unisys that allows it to retain equipment leased under the current ITMS contract, and provide for the transition of ongoing projects. TSA said that the ‘bridge’ contract implements sound business practices and processes to address the weaknesses identified in our report. We consider the recommendations resolved and closed based on TSA’s assurances that these actions are complete.

(Executive Summary)