By Shane Harris
January 13, 2004Amid a growing procurement scandal at the Federal Technology Service, the agency has hired a firm with deep ties to the federal contracting world to review how it does business.
FTS, a subsidiary of the General Services Administration, has signed a contract with Acquisition Solutions Inc., a procurement and acquisition consulting firm, to critique the effectiveness of its management structure, FTS Commissioner Sandra Bates said last week. Bates made the announcement following the GSA inspector general's release of an audit Friday that showed hundreds of millions of dollars in procurement waste and abuse at three FTS regional offices, largely stemming from management's failure to ensure employees adhered to well-known laws and regulations. FTS buys information technology on behalf of other agencies, for a fee, and has come under fire in recent months for using money earmarked for technology to buy unrelated items, including construction services, naval equipment and biological materials.
Acquisitions Solutions is perhaps best known for helping the Transportation Security Administration write a $1 billion contract for outsourcing its technology operations. The group also consults on the Coast Guard's fleet upgrade program, called Deepwater, and helps agencies implement purchasing strategies made possible by procurement reforms enacted in the mid and late 1990s.
FTS built its fee-for-service business on the back of those reforms, anddeveloped a reputation for providing quick, hassle-free service.
Acquisition Solutions had no comment on its work, which will be conducted as the GSA inspector general audits all 11 FTS regional offices.
Meanwhile, FTS announced on Friday that it is executing a one-year option with telecommunications firm MCI on a massive long-distance contract, called FTS 2001. The deal provides long-distance service to most federal agencies. GSA had considered debarring MCI, formerly known as WorldCom, from competing for federal contracts and receiving renewals following last year's revelation of the company's massive accounting fraud and corporate malfeasance. But last week, GSA lifted its proposed debarment, which opened the door for FTS to grant the extension.
The move was expected. GSA had determined the government would spend between $100 million and $200 million transitioning agencies from MCI to another provider. For several months, the agency has been monitoring MCI's bankruptcy proceedings to determine whether its financial woes would adversely affect the government. Last November, MCI "assured GSA that the bankruptcy filing will not affect the company's performance in supplying ongoing support to its federal customers," said Mary Alice Johnson, a GSA spokeswoman.
In a statement Friday, GSA praised MCI's performance: "In deciding to exercise the second contract option, GSA indicated that MCI WorldCom's performance exceeded that required of it under the terms of the FTS 2001 contract. Moreover, the company's pricing remained very attractive when compared with other similarly situated vendors."
Federal agencies pay about 1 cent per minute for long distance under the contract. MCI had sales of almost $397 million under the agreement in fiscal 2003, according to GSA.
Spy Fund's Protéé Spreads Wings
A Southern California startup-turned-government contractor is the first company to launch a "successful exit" from the Central Intelligence Agency's much touted venture capital program.
Mohomine Inc., which builds software that automatically extracts and classified text from documents and messages, was purchased in April 2003 by Kofax Image Products Inc., which makes hardware and software used for scanning documents. That makes Mohomine the first company funded by the CIA's technology venture group, In-Q-Tel, to be acquired, said Mohomine co-founder Sameer Samat.
Now, Mohomine's new owner, Kofax, is receiving In-Q-Tel largesse, as well. The company announced Tuesday that Kofax has signed a development and investment agreement with In-Q-Tel to "advance" document exploitation technologies. For Kofax, that means building products that can quickly scan so-called unstructured data-such as e-mails and documents-and extract keywords and phrases, then transmit that data to people within an organization.
Samat founded Mohomine in 1999 with some fellow undergraduates at the University of California at San Diego. The company then signed a deal to receive funding from In-Q-Tel, which invests in commercial technology that might be of use to the CIA and other intelligence agencies.
The Kofax-Mohomine technology is seemingly a natural fit for intelligence agencies. Intelligence operatives and U.S. troops have brought al Qaeda documents out of caves in Afghanistan, which they mine for information. And intelligence agencies are gathering data in Iraq from records of Saddam Hussein's deposed regime.
In-Q-Tel will provide Kofax with about $350,000 over the next five years to further develop its technology and bring it to market.
To date, the venture fund has reviewed more than 4,000 business plans and has delivered more than 60 technologies to the government, said In-Q-Tel spokeswoman Stephanie Stern, adding there are more than 40 companies currently in the In-Q-Tel portfolio.
Live from Baghdad
The Iraqi media is hardly modern, or massive, compared with its neighbors in the region. However, it is receiving a boost of sorts under a new contract awarded to communications firm Harris Corp.
Last week, Harris announced it had won a contract on behalf of the Coalition Provisional Authority that governs Iraq to develop "an existing but antiquated media network into a modern media organization," the company said in a statement. That will entail repairing and building broadcast infrastructure and training, through a network of subcontractors, employees who will run broadcast and print media organizations, said Harris chief executive Howard Lance.
Harris is taking over work begun last year by Science Applications International Corp. Lance said the project eventually will be handed over to Iraqis. But for now, the company reports directly to the coalition authority, which Lance said has hired a former television news producer as a senior media consultant.
The one-year media contract is worth $96 million and has two six-month extensions, which Harris said could raise the total value to $165 million.
Any new Iraqi media may face competition from the U.S. government. The Broadcasting Board of Governors, the federal outfit that runs the Voice of America radio broadcast, is gearing up a Middle East Television Network, aimed at taking on the region's popular satellite news channel Al Jazeera. The board also runs Radio Sawa, a news and entertainment station that broadcasts into Iraq. Joan Mower, a spokeswoman for the Board, said officials are aiming to have the television network running by the end of January or early February.
By Shane Harris
January 13, 2004