Accenture contract in Bermuda triangle

Accenture 'met the criteria of procurement. They have 25,000 U.S. employees. They pay federal taxes.'

'Asa Hutchinson, DHS Undersecretary for Border and Transportation Securtiy

Henrik G. de Gyor

The Homeland Security Department's multibillion-dollar contract with Accenture LLP of Reston, Va., to integrate the U.S. Visit virtual border system overcame a legislative hurdle last week.

The House Rules Committee voted down an amendment to scuttle Accenture's contract on grounds that the company is a tax exile.

The department's fiscal 2005 appropriations bill, which passed the Appropriations Committee 35 to 17 on June 9, served as the vehicle for the amendment by Rep. Rose DeLauro (D-Conn.).

The amendment isn't quite dead yet. Legislators could revive it to bar the contract when House and Senate negotiators meet to hammer out the final bill.

DeLauro had attempted to attach similar language to the Homeland Security Act of 2002, but that amendment was neutered by a conference committee.

Accenture and the department hold that the company meets the criteria to carry out the U.S. Visit work, awarded May 28.

Hill support

Asa Hutchinson, DHS undersecretary for Border and Transportation Security, defended the contracting decision.

Accenture 'met the criteria of procurement. They have 25,000 U.S. employees. They pay federal taxes,' Hutchinson said, speaking at a GCN breakfast for industry executives.

More opposition to the DeLauro amendment came in a sally by two influential members of Congress.

Government Reform Committee chairman Tom Davis (R) and Jim Moran (D), both from Virginia, wrote to DHS secretary Tom Ridge on June 14, praising the U.S. Visit procurement as 'fair, open, on time and fiercely competed.'

They rejected DeLauro's contention that Accenture had incorporated in Bermuda to dodge federal taxes and cited a 2002 General Accounting Office report on the company's legal structure and tax status.

The Accenture subsidiary that received the contract is based in Reston, Va., but its corporate parent is located in Hamilton, Bermuda.

'This amendment does not make expatriating illegal,' a DeLauro aide said, referring to the act of moving a company's headquarters overseas. 'But they should not benefit from a taxpayer-funded homeland security contract.'

'To have prohibited Accenture from competing would have violated federal procurement laws,' company spokesman Jim McAvoy said. 'All bidders were U.S. companies under the law and therefore qualified to bid.'

Accenture bested Computer Sciences Corp. and Lockheed Martin Corp. to win the contract.

The 10-year contract has a $10 billion ceiling. But U.S. Visit program manager Jim Williams has said he does not expect spending to reach that level. The minimum value of the deal is $10 million.

GCN editor in chief Thomas R. Temin contributed to this report.

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