Back-office IT deal has yet to emerge at DHS

The Homeland Security Department's flagship back-office financial systems project has slipped off schedule by more than two months and faces an uncertain future.

The Electronically Managing Enterprise Resources for Government Effectiveness and Efficiency project, aimed at weaving together the financial, budget and asset control activities of the department's 22 component agencies, issued a request for proposals in June.

The project's core would be an enterprise resource planning system to merge DHS' financial operations.

Program officials initially told vendors they expected to award a contract in July. BearingPoint Inc. of McLean, Va., and IBM Corp. lead the two vendor teams vying for the pact, industry sources said.

DHS first delayed the contract award until August. Recent department communications with the vendors indicate that DHS is not likely to issue a contract before the end of this month, sources said.

Department officials have not revealed the reasons for the delay. DHS spokesman Ben Quevedo said, 'The reason we haven't awarded the contract yet is that we are continuing to review the proposals to make sure we maximize both our performance and the taxpayers' dollars.' He added that DHS officials plan to award an Emerge2 contract soon, and that the program remains a high priority at the department.

But another industry source said DHS officials did not succeed in amassing the $100 million needed for Emerge2. DHS officials are reluctant to commit to such a large procurement for a non-mission-critical system before the November election, the source said.

James Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies in Washington, said funding problems had delayed the department's IT acquisition plans, including those for Emerge2.

Lewis said the Emerge2 plan 'doesn't look like it's a first-rank program. It may be a second- or even third-rank program. It would be nice to do, but it's not critical.'

BearingPoint and IBM declined to comment.

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